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Subway to let consumers tap-to-pay for meals via contactless payments initiative

Restaurant franchise Subway is strengthening its position in the mobile space via a new initiative that will let consumers pay for their meal by tapping a MasterCard PassPass-enabled device or card at the register.

The new tap and go payment readers will be implemented at more than 7,000 United States locations by the end of 2012. According to the company, the new payment readers will increase speed and convenience at the point-of-sale and MasterCard is one of the partners for Google Wallet.

?This is an great opportunity because Google and its partners are taking the first step in making digital payments on your phone a reality,? said David Luxeder, senior marketing manager at Subway, New York. ?We believe Google Wallet will save consumers time and money as they shop and will give merchants ? like us ? new ways to forge lasting relationships with customers.

?With the rapid adaptation of smartphones, we see mobile as an increasingly important marketing channel for us to leverage," he said "The mobile device is always on, and goes with the consumer everywhere.   

"The consumer can now interact with the brand at anytime and from anywhere."

Headquartered in Milford, CT, and with regional offices in Amsterdam, Beirut, Brisbane, Miami and Singapore, the Subway chain was co-founded by Fred DeLuca and Dr. Peter Buck in 1965.

MasterCard is a global payments and technology company. It operates the world?s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.

Subway consumers can tap their PayPass-enabled MasterCard card, phone or device on a PayPass-accepting reader at check-out.

According to MasterCard, PayPass does not require customers to sign receipts for purchases under $50.

?This initial store rollout is aimed to gain consumer acceptance of mobile payments and to address any technical issues that may come up,? Mr. Luxeder said. ?We see Google Wallet as another opportunity to leverage the mobile device in enhancing the consumers experience with our brand. 

"With Google Wallet consumers don?t have to carry around a physical wallet anymore," he said. "At the same time, we can provide the consumers with ?digital? coupons, that don?t require any paper and scissors, but can be conveniently stored in their Google Wallet.

?We are getting the word out about this through  traditional media and our social media channels,? he said.

Mobile contact
Consumers are increasingly turning to contactless payments.

According to MasterCard, as of the second quarter of 2011, nearly 100 million PayPass-enabled cards and devices have been issued worldwide.

?Today?s announcement is another example of how MasterCard is leading the way in the mobile payments arena by partnering with industry leaders to empower solutions that provides value to consumers, merchants, banks and more,? said Seth Eisen, senior business leader of U.S. Markets Communications at MasterCard, Purchase, NY.

?Consumer-driven innovations MasterCard is developing ? like MasterCard PayPass ? are giving people the freedom to pay in a way that best fits their needs and lifestyle,? he said.

?Since it was introduced in 2002, MasterCard PayPass has led the way in bringing the speed and convenience of contactless technology to consumer categories such as quick serve restaurants, drug stores, gas stations, vending machines, convenience stores, sports arenas, movie theaters, transit systems, taxis, parking garages and more.?

Past endeavors
Subway has been doing a lot in the mobile space.

Recently, restaurant franchise Subway announced its plans to roll out a mobile-optimized site and application that lets consumers design their favorite sandwich and order meals.

The company has delved into the mobile space before with mobile coupons and mobile ads, but this is their first initiative in the mcommerce space. Subway tapped Velti to help build its mobile offerings (see story).

?Subway?s decision to provide PayPass acceptance is a testament to the popularity of contactless payments and our shared goal of providing consumers a faster and more convenient payment experience and a more enjoyable dining experience,? Mr. Eisen said.

?As mobile devices have proliferated and become readily available to consumers ? more than four billion globally ? mobile payments is one of the next big shifts for the payments industry,? he said.

?By enabling our PayPass contactless terminals with NFC devices, consumers can leave the bulkiness of their wallets at home and not have to worry about having enough cash on them providing a richer interaction.?

Final Take
Rimma Kats is staff reporter on Mobile Marketer, New York