McDonald's investigates payments outage, dLocal shuffles C-suite

March 20, 2024 9:43 AM

The fast-food chain is analyzing the cause of an issue that affected payments in multiple countries. Separately, dLocal, a payments processor in Uraguay, is making changes at the top.

Here's what's happening around the world.

Carla Gottgens/Bloomberg

McDonald’s explores cause of global payments-system outage

A global systems outage froze services including ordering and payments across thousands of McDonald's locations in various countries on March 15, according to a company press release. The outage reportedly affected stores in Australia, China, Japan, Canada, South Korea, Taiwan, Germany and the U.S. for several hours. The incident marked the third high-profile U.S. corporate payments system outage within the last year, underscoring business risk exposure when centralized digital payment systems are impaired.

A day later, the McDonald's digital ordering and payment systems were back online, the company said in a second press release on March 16. "In the coming days, we will be analyzing the issue and pushing for accountability across our teams and third-party vendors," said Brian Rice, McDonald's executive vice president and global chief information officer, in the release. In the company's annual report, filed Feb. 22, McDonald's had said it was committing to improving its service model through mobile ordering and payments systems.

JPMorgan Chase in July 2023 experienced an outage that disrupted U.S. transactions riding on the bank consortium-owned Zelle peer-to-peer transfer app, and two months later, Block's Square and Cash App systems were rocked by an outage that prevented millions of sellers from accepting payments for about 15 hours. The incident hurt Block's quarterly profits by less than 1%, but within weeks the company's CEO Alyssa Henry announced her departure after nearly a decade heading the firm. Square founder Jack Dorsey subsequently resumed the role of CEO at Block and Square, where he's overseeing improvements to corporate systems.

McDonald's was the first quick-service chain to roll out self-ordering kiosks on a global scale, beginning with tests of the concept in 2003. By 2015, the fast-food chain began installing self-service kiosks widely, reaching all 4,000 U.S. stores by 2020. The firm reportedly saw a 6% increase in U.S. sales in stores equipped with self-service kiosks, due to their greater efficiency and accuracy. Simultaneously, McDonald's has added self-ordering kiosks across Europe and Asia so they now extend to the majority of the company's 40,000 stores worldwide. —Kate Fitzgerald

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dLocal makes C-suite changes

Uruguay-based cross-border payments processor dLocal announced leadership changes that include co-CEO Sebastian Kanovich stepping down to be a board member and head of the commercial and M&A committee, leaving Pedro Arndt as the firm's sole CEO. The firm also named Mark Ortiz, an executive who previously worked at General Electric, as its new chief financial officer, replacing Diego Cabrera Canay. Veronica Raffo, a lawyer, also joined dLocal's board as an independent member. dLocal processes payments for 40 million consumers and has handled transactions for more than 3 million freelancers. The personnel moves come less than a year after dLocal shuffled other top executives as it repositioned for international expansion. —Kate Fitzgerald

Revolut rolls out device to help restaurant managers

London-based fintech Revolut has rolled out a device based on an iPad enabling businesses in the hospitality industry to accept cards at the point of sale and manage other aspects of their businesses, Finextra reports. The device can help restaurant managers track sales and inventory trends and offers 24-hour settlement of funds. The move pits Revolut, which launched in the U.K. in 2015 and in the U.S. in 2020, against Square and PayPal's iZettle, according to reports. Revolut claims to have 840,000 U.S. customers. —Kate Fitzgerald

Mastercard expands remittances reach in new pact with Alipay

Mastercard is broadening its reach in cross-border remittances through its partnership with Alipay, the mobile-payments super-app backed by Ant Group. The agreement, which expands Mastercard's existing relationship with Alipay, allows consumers to receive money in their digital wallets "in near real-time," according to a statement. Alipay caters to more than a billion consumers in China.

The Asian nation "is already one of the largest recipient countries worldwide for international remittances," Dennis Chang, Mastercard's division president for greater China, said in the statement. "As global economic activities continue to recover, demand for cross-border payments will only increase."

Mastercard and other payments firms have long eyed opportunities in China given its scale and the potential for growth. In a joint venture with NetsUnion Clearing Corp., Mastercard was granted a bank-card clearing license by the People's Bank of China last year. —Paige Smith, Bloomberg News

Shift4 teams with Atlante for EV charging payments in Europe

Paris-based NHOA and its Atlante electric vehicle charging subsidiary have formed a strategic partnership with Allentown, Pennsylvania-based Shift4 to introduce card acceptance at Atlante's EV charging stations across Europe, Finance Magnates reports. The move will enable drivers of approximately 8 million EVs in Europe to pay by card at public charging stations without having to download an app or use a proprietary payment card. Shift4 will begin enabling card acceptance at Atlante charging stations in Italy and France, with plans to expand soon to Spain and Portugal. Atlante reportedly is building Europe's largest fast-charging EV network, expanding from under 5,000 charging stations today to more than 35,000 by 2030. —Kate Fitzgerald

Temasek-backed ShopBack cuts 24% of jobs in ‘pay later’ defeat

ShopBack, an online shopping rewards app backed by Temasek Holdings, is cutting about a quarter of its workforce as it retreats from the buy-now-pay-later space.

The company is eliminating 195 roles, or 24% of its staff, to become more focused and self-sustainable, Chief Executive Officer Henry Chan said in a note to employees on Tuesday. ShopBack had started freezing salaries for leaders and paying out lower bonuses since 2022, but sustainable growth remained a challenge, he said.

The Singapore-based startup told customers in an email that it will be discontinuing its buy now/pay later service in March, without offering reasons. The BNPL industry has struggled as households cut back on spending in the face of inflationary pressures, as compared with the pandemic-induced frenzy that buoyed the rise of such companies. Government regulators have also called for additional oversight of the industry to give consumers greater protections.

"I made the mistake of pursuing too many directions as a company and expanding our team too rapidly," Chan said in the note to workers. "I take full responsibility for the decisions that have led to this situation."

ShopBack, whose investors include SoftBank Ventures Asia and Rakuten Capital, offers cashback and other rewards for brands and retailers including Dyson, Lululemon and Foodpanda. It bought fintech startup Hoolah in 2021 to add BNPL services.

Founded in 2014 by Chan and Joel Leong, the platform has expanded to 11 markets across Southeast Asia, Australia, South Korea and Taiwan, according to its website. It raised $200 million from investors including Westpac and Asia Partners in a Series F round in 2022. —Olivia Poh, Bloomberg News