Citigroup banks on burgers

<p>ARLINGTON, Va. – Citigroup Inc, the world’s largest card issuer, according to the American Banker, has entered into an experimental program with the McDonald’s Corporation to allow customers to use their credit cards to pay for their burgers and fries. According to a recent story Citigroup and McDonald’s are using radio frequency technology analogous to the “speed pass” technology used by primary gasoline retailers to allow customers to pay for the food by credit cards. Steven Freiberg, Citigroup’s Citi Cards CEO, reported that the “jury is still out” on the McDonald’s experiment. There are technological concerns that the technology, when it malfunctions, could hold up the McDonald’s lines and Citigroup is not convinced it can make money on such small transactions, even though customers are making a lot of them. There are indications, however, that McDonald’s customers using purchase 40% more fast food when paying by credit card than they do when paying by cash, Freiberg reported. Citigroup has $109 billion in credit card receivables, more than double its size in 1997. The company is striving to remain profitable in a credit card market that is “saturated,” Freiberg said.</p>