Cashless payments are just the ticket for future festivals
Cashless payment systems are increasingly being used at big events, which could improve patrons’ experience and increase revenues for the organisers and vendors.
Event organisers are confident that over the next three to five years, many events will no longer accept cash payments. But they also agree that education is required, as some patrons are reluctant to switch from traditional cash and card payments.
Electronic platforms can speed up transaction times, eliminate long and slow queues and enable vendors to sell more products at a lower cost.
Cashless systems also provide festival operators with a flood of data to help improve future events.
Most importantly, such systems are more secure than cash payments. In 2013, brazen robbers made off with a reported R3m from the sales of alcohol, food and merchandise at the FNB Stadium during that weekend’s Bon Jovi and Justin Bieber concerts. The crime has never been solved.
Some venues in the US now only allow digital payments for ticketing and other transactions. Patrons are given options to load money on their radio-frequency identification wristbands or on cards, which they can use to pay for food, beverages and merchandise. This can be done online before the event, or they can use their bank cards or cash at the venues to load credit.
"This is a new industry in SA but it will explode as many event production companies are increasingly embracing cashless facilities," says Shai Evian, founder of local technology group Howler.
G&G Productions logistics manager Kate Preuss says that all of their events no longer take cash payments.
"This provides a safer environment when attending a festival. It also prevents vendors overcharging customers."
Big Concerts International operations manager Len Marais says there are many benefits to cashless systems such as wristbands, cards and cellphone apps. He says they allow the company to tailor offerings, such as discounts for repeat customers.
Cashless payments on food sold at events can also be tailored, such as festival goers prepurchasing their meals and collecting them on arrival.
Big Concerts is one of the biggest production companies in SA and has brought global artists including UB40, Carlos Santana and Bieber to the country. They are showcasing Katy Perry in July.
Marais says the event industry in SA lags other markets in terms of embracing technology. "This is largely due to the public not embracing technology across the generational spectrum," he says.
"We are still using thermal [printed] tickets, and even where fully digital tickets can be implemented, we are finding that not all individuals have smartphones that enable them to do this."
The growth in general online sales in SA provides hope that the new technologies may trickle down to the festival industry, Marais says.
However, as "great" as the cashless system is, Marais says it is only feasible at festivals or other multiday events. He says one-day events require many card-loading stations or queues would be slow moving.
They need to be educated to show the benefit they can get from transacting online, buying tickets in the comfort of their own space and not having to travel or stand in queues.Len Marais
"Cashless one-day events will purely not be possible. The backlash from the public will be massive.
"The revenue generated will also be lower as patrons may not have enough time to load credit and transact with vendors," he says.
Evian agrees that it is easier for multiday festivals to go cashless, adding that the data collected can help understand consumer patterns.
Howler provides the technology software and hardware for cashless payments. It recently provided a payment system for the MTN Bushfire three-day festival in Swaziland, where patrons were given wristbands they could use to buy food and drinks.
In October 2017 the company provided facilities at the BMW M Festival, where attendees paid R10 to buy a card on which they could load money to buy food and drinks. The festival was put together by G&G Productions.
Preuss says the R10 charge covered the cost of manufacturing the cards.
The cards can only be used at one event at a time, but Evian says Howler is working on a solution that will enable patrons to use their cards or wristbands at multiple events.
Marais says educating consumers is important, as many people are still hesitant to transact online.
"They need to be educated to show the benefit they can get from transacting online, buying tickets in the comfort of their own space and not having to travel or stand in queues," he says.
Another issue that is likely to be a concern among patrons is the refund of the money remaining on their cards or wristbands when the event ends. Evian says in some cases the refund process is complicated and long, but the turnaround time is improving.
At the Bushfire Festival, ATMs were provided for people to redeem the cash left over on their wristbands.
Marais says there is push-back from vendors on cashless systems as they want the money they have earned immediately and refuse to wait for final tallies to be made.
Evian says Howler gives event organisers and vendors access to their revenues immediately, or within 24 hours. "If you are hosting big events you don’t have to wait until the end of the event to get access to the money," he says.