Subway customers can now skip the line by placing orders for their six-inch or foot-long sandwich on their phone or computer.
The fast-food sandwich shop, which operates one of the largest franchises in the country, said it has rolled out remote ordering and payment for its customers in the U.S., and later this year, will let customers check-out with a single touch using PayPal at 27,000 locations.
The mobile ordering capabilities are nearly identical to the ones that Starbucks has been rolling out, which allows its customers to place custom food and beverage orders from their phone before ever stepping foot into the store.
While Starbucks is using its own in-house technology, Subway opted to partner with Paydiant, which was acquired by PayPal in March for $280 million. The white-label digital wallet maker is known for building other company’s experiences, including Capital One’s. It was also the startup behind MCX, the controversial mobile payments network, being built by retailers, including Walmart, Target and Best Buy, as an alternative to Apple Pay.
PayPal acquired Paydiant earlier this year for its expertise in building in-store mobile apps for major retailers. The company’s technology includes targeted offers, loyalty programs and payment capabilities that let the retailer connect with their customers before, during and even after the purchase.
The Subway experience, which was officially announced today although it’s been live for the past couple of months, is fairly slick and easy to use. The app displays the full menu, and allows you to customize sandwiches just like you would in the store, adding green bell peppers and pickles and telling them to go light on the mayo. But unlike Starbucks, which already had a huge number of app installs, Subway will have a long ways to go before mass adoption.
Currently Subway’s iPhone app has only 34 reviews for the most recent version, and receives a poor two and a half star rating. The most common complaint is that it is buggy, and during my test run, it froze during check-out so I could not complete my order. Once the app started to work again, I was able to place my orders with no additional problems. I was able to skip the line and immediately head to the cashier, who had my sandwich waiting for me behind counter within the 15-minute window promised. He mistakenly rung up the order again and asked me to pay before quickly realizing that I’d already paid on my phone.
In the future, I can see how PayPal will speed up the experience. As a first-time user, I had to create a login and enter a credit card for payment. The app will be much speedier to use once PayPal is integrated later this year. The ability to set a time for pick-up would also be nice although a sandwich has a longer shelf life than a cup of coffee.
Subway plans to integrate PayPal’s One Touch technology, which eliminates the need for entering usernames and passwords as long they have logged into PayPal in another app sometime in the past six months. PayPal has said before that merchants, who have enabled One Touch, have seen double-digit growth in conversion rates and increased average order values as a result of the streamlined buying experience.
Subway also accepts both Apple Pay and Android Pay using a mobile device in the store at the point of sale.
“As part of our continued commitment to improve, we knew that offering online and mobile tools to our busy customers was critical to ensuring they cannot only eat fresh; but fast,” Subway’s CIO Carman Wenkoff, in a statement. “We are excited to launch our new ordering platforms and will continue to look for new ways to improve the Subway experience.”
A little more than a week ago, PayPal started trading publicly on the Nasdaq market after splitting off from eBay. In the run-up to the separation, PayPal’s CEO Dan Schulman said building smartphone apps for brick-and-mortar stores was one of the company’s big opportunities.
PayPal is also integrated into the Burger King app, so that customers can now make in-store mobile payments with PayPal at 5,000 restaurants in the U.S.
One of the reasons why Starbucks has invested so heavily in building a mobile ordering app is to increase the output of each store and to accommodate more customers without longer lines. If Subway also finds this to be true, you can bet that many other retailers will enable mobile ordering in the near future. Taco Bell has also been quick to jump on the bandwagon.