McDonald’s is selling Dynamic Yield to Mastercard

The burger giant is selling the artificial intelligence ordering service to the financial services giant less than three years after its acquisition.
McDonald's Dynamic Yield
Photo by Jonathan Maze

McDonald’s is selling its Dynamic Yield artificial intelligence ordering service to Mastercard, the company said on Tuesday.

The sale comes less than three years after the Chicago-based burger giant acquired the service, which uses artificial intelligence to suggestive sell to customers based on time of day, weather and how busy the kitchen is at any given moment.

It is also the second such sale in the past couple of months by McDonald’s, which recently signaled that it would not keep hold of the technology companies it acquires for long. The company recently sold its automated ordering lab to IBM.

Mastercard said that Dynamic Yield could help it speed the development of tailored retail experiences to consumers. “With Dynamic Yield’s expertise and our scale and relationships, we’ll be able to bring the connections between the consumer and our customers to new heights,” Raj Seshandri, president of data and services for Mastercard, said in a statement. McDonald's did not disclose terms of the deal on Tuesday.

McDonald’s acquired Dynamic Yield for $300 million in 2019. The service brings individualized product recommendations and was quickly added to the chain’s drive-thru ordering boards. The company said that the service helped improve average check by convincing customers to order more—but operators have said it was unclear how much that service helps sales.

That acquisition helped usher in an era of rapid development of drive-thru innovation, with many of the chain’s competitors looking to add similar technology to their menu boards. It came just before the pandemic led many more customers to use drive-thrus to get their orders.

The company said in March that it could look to sell the part of Dynamic Yield that didn’t work with McDonald’s.

The fast-food chain said that Dynamic Yield’s revenues doubled in the time under McDonald’s ownership, and that the service has become an important component of its strategy. It also said that the sale of the service to Mastercard will strengthen McDonald’s digital engagement services.

Some 400 brands in retail, financial services, travel and restaurants among others, use Dynamic Yield technology.

The company has added Dynamic Yield technology to drive-thrus and kiosks in several countries, including the U.S. and Canada as well as Australia. McDonald’s said that it would continue to integrate the technology across the globe.

McDonald’s said that a number of merchant and financial services brands use both Dynamic Yield and Mastercard services, including loyalty, analytics and marketing services. As such, the sale to the payments company makes sense.

The deal is expected to close in the first half of 2022. Terms of the deal have not yet been disclosed.

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