American Express is partnering with McDonald's to offer a new service that allows rewards program cardholders to redeem points for meals.
The pay-with-points service launches this week in New York and Chicago, rolls out next week in Phoenix, Ariz., and will be available in all U.S. locations by December.
"We want to be ubiquitous," Leslie Berland, evp for digital partnerships and development at American Express told Businessweek. "We want our customers to think about using their American Express card in places they haven’t thought about before."
The system is designed to take a fraction of a second, unlike many more traditional rewards-points redemptions. Customers simply swipe their cards at the restaurant, find out the number of points needed to cover the order, and click if they would like to use their points. Unfortunately, the transaction won't run as smoothly at the drive-through window, where customers can either use the American Express app or reimburse themselves for the purchase later by redeeming points online.
Conversion rates were created with convenience in mind. One hundred points nets customers $1 worth of food. So a cup of coffee can be purchased with one hundred points, while a Bacon and Cheese Quarter Pounder costs 400 points.
The service follows successful pay-with-points initiatives American Express launched with Uber and Verifone. McDonald's hopes the program can entice customers to visit the chain even more.
For McDonald's, it's yet another example of letting customers pay in new ways as the brand struggles to attract younger customers. It signed on as an early adopter of Apple Pay and introduced mobile payments earlier this year.