By David ParkerEven at the beginning of 2012, when sports franchises and stadiums worldwide are upgrading systems to allow for digital access, they still sometimes believe that adding in fully integrated electronic payment systems in the first stage is just one step too many.
Case in point is the San Antonio Spurs. In December 2010, the National Basketball Association franchise announced that season ticketholders would have the option of receiving tickets on closed-loop, stored-value smart cards. The cards are only good for admission to regular-season home games; fans can't also buy concessions with the cards.
A report in the SportsBusiness Journal said the smart card implementation – part of the Spurs' three-year plan to move to a cashless ticketing system – is expected to save the Spurs $50,000 a year in overhead costs that would have otherwise been allocated to paper ticket issuing and processing. Given the research on how cashless payment systems substantially increase sales at sports venues, one would hope the Spurs' three-year plan includes a system that integrates ticketing with concessions.
In June 2011, I wrote about the rise of prepaid card installations to render stadiums "cashless" (for more information, see "Prepaid scores in stadiums internationally," by David Parker, SellingPrepaid E-Magazine, June 16, 2011, issue 11:06:A). The article highlighted Polymath Consulting research published in The Cashless Stadium/Events: Is there a move from closed to open loop?
Polymath updated the report in October 2011 because the pace of this transition has increased in Europe. New stadiums across the continent are going live with open-loop, network-branded prepaid payment solutions – and even extending these capabilities to speedway stadiums (for motorcycle racing), such as the one instituted by Bank Zachodni WBK S.A. in Poznań, Poland.
The bank also launched a football stadium card that has already been adopted by five football (soccer) clubs in Poland's premier league. Most of these cards have similar features:
The use of prepaid cards has not been limited to stadiums. At the Isle of Wight Music Festival held in June 2011, MasterCard Worldwide ran a trial where it issued prepaid wristbands enabled with contactless PayPass technology. The wristbands, which provided event access and payment functionality for VIPs, were preloaded with 30 British pounds and could be used to purchase food and drink with a tap of the wrist at the POS. Festival-goers were then quizzed on the experience. Among the findings were:
A similar, closed-loop payment system was used at four major Hungarian festivals – Budai Gourmet, VOLT festival, Heineken Balaton Sound and Sziget festival. Event organizer Sziget Ltd. banned the use of cash at the festivals and made the contactless prepaid solution of Budapest, Hungary's Metapay the official currency.
Again, follow-up research found that 96 percent of festival visitors and 87 percent of festival merchants were happy with the prepaid card system. The merchant research is particularly important as the lack of merchant desire/demand is sometimes cited as a reason for not implementing these types of programs.
Whether the solution is open- or closed-loop, experience has shown that giving users a quicker, easier way to spend money at festivals and stadiums will result in them spending anywhere from 30 to 70 percent more.
Major challenges arise when implementing cashless payment solutions at stadiums and festival venues, not the least of which is putting in place the required payment acceptance points at all relevant locations and ensuring that even mobile vendors can accept such payments. However, the business case for increased revenue and customer satisfaction is unarguable. To turn a basketball phrase, it's a slam dunk.
David Parker is Founder and Chief Executive Officer at U.K.-based, internationally working consulting and research firm Polymath Consulting Ltd. Along with providing expertise to organizations across the cards and payments industry, with a special emphasis on prepaid cards, the consultancy also publishes the Prepaid Report. He can be reached at email@example.com.
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