[Dave Birch] My favourite presentation at the CFIR “Remaking Finance” seminar in Copenhagen was given by Thomas Keller from the Roskilde Festival. This is an annual eight day rock festival along the lines of Glastonbury but, to judge from his slide show, with much more attractive people.

Cash is a big problem at the festival. The entire trading income of around 150m Danish Crowns (around $30m) comes in those eight days (this excludes the ticket and off-site merchandise sales). The resources needed to manage this amount of cash — from security guards and cash boxes to armoured cars and staff to count and tally — are huge and that’s even before the shrinkage. Apparently there are some strange atmospheric conditions in this part of Scandianvia and every year somewhere between 5-6% of the cash taken simply evaporates (something to do with the Northern lights?)

They did some early trials at the festival with mobile payments are few years ago. In the end they were happy with the way that SMS payments worked (a bit like the old PayPal mobile) but the SMS payment operators are just too expensive. They tried some other mobile payments but they didn’t work because (as is common to all pop feasitavls and the like) the GSM network is constantly collapsing under the weight of video clips, picture messages and web browsing. So far they haven’t managed to get wifi up across the site but they are going to look at this again.

Having examined all of the pilots and experiences, they’ve settled on contactless debit cards as the best short-term solution, moving to contactless mobile in the future. There’s a slight problem, obviously, in that virtually no-one has a contactless debit card (the Danish banks don’t issue them) and absolutely no-one has a contactless mobile, so they plan to experiment next year with a contactless prepaid card.

I asked him about other form factors and I mentioned wristbands but he said that they silicon rubber bands are no good because criminals cut them off of the wrists of drunk and sleeping people. If the wristbands stored cash, then they would be cut off all the time. I have to say, I hadn’t thought about that, so I told him that stickers are the future anyway.

Thomas reckons that shifting from cash to cashless would save them in the region of 5-10m Danish Crowns per annum, even taking into account the merchant service charges and that would make a real difference to the economics around the event. I’m sure his figures could be replicated. This is a super niche for cashless and I can see that it will be a big growth area in the UK where there is a big festival business. Not only for pop festivals, but for the huge variety of festivals that we all love, and not only for payments but for the ticketing. The potential is huge and the benefits manifold:

  • Avoiding having millions of pounds of cash on festival sites, which is seen as a security risk and is expensive to transport and guard;
  • Improving security for festival goers – who would no longer have to carry cash around and who could freeze their account if the payment device was lost;
  • Cutting theft and fraud by staff working at festivals;
  • Making service quicker at bars, and allowing management to monitor stock levels in real-time
  • Controlling entry to different parts of the festival such as backstage or VIP areas
[From BBC News – Cash to be axed from UK festivals]

I can tell you from personal experience that the technology works well for the last case. We did some work for O2 a couple of years ago, implementing a simple VIP access control system on Nokia handsets for the pop festival in Hyde Park and it worked very well. Here I am blending in the with kids to test out the application.

Now, this is is hardly new thinking. People have been experimenting with various forms of contactless technology in the festival environment for some time, and just this year there were experiments at the Isle of Wight Festival, at the Wireless Festival in Hyde Park (the BBC say that London’s Wireless festival is tipped to be cashless by next summer) and elsewhere.

Specialist event IT supplier Etherlive has road tested a pioneering cash-less ticketing system at the Womad world music festival in Wiltshire… The test marks the first time the RFID technology has been used successfully at a festival and is the first step toward providing the infrastructure to a cashless event.  Womad festival director Chris Smith says, “Womad is an exciting test case for the deployment of RFID at festivals, and I believe it could soon be rolled out in other ways. This is the first step in the journey towards cashless events where festival-goers use their wristbands to pay for their drinks, goods and food.”

[From Music Week – Music Week – Music business magazine – Womad tests cash-less payment system]

One of the complexities in this space is that the value network is complex. The web of artists, promoters, producers, concessions, franchise and so on is difficult to navigate and co-ordinate. Nevertheless, contactless does seem to be gained ground across the network.

The world’s largest concert promoter Live Nation says it’s piloting new digital wristbands to try to combat ticket fraud… Live Nation says eventually it would like to get rid of paper tickets… According to the latest figures issued by the government, one in 12 music fans have been scammed online when they’ve bought live events tickets.

[From BBC – Newsbeat – Concert promoters pilot ‘smart-chip’ digital tickets]

This all sounds great — or at least, potentially great, since there are both smart and stupid ways to implement this kind of value-added identity infrastructure — but what caught my eye in this announcement was, naturally, the incorporation of payment technology..

The passes would allow fans to purchase food and drink using the device.

[From BBC – Newsbeat – Concert promoters pilot ‘smart-chip’ digital tickets]

Cashless payments in these environments don’t just save money because of reduced cash handling, they increase sales because they speed things up. Instead of the Glastonbury phenomenon of people queueing for an hour to get to an ATM so that they can queue for an hour to buy a beer token so that they can queue for an hour to get a beer (this could only happen in England, of course, since in any other country people would quite rightly riot if told to queue for three hours to get a drink) there will be the simple, quick tap and go.

Here’s some more concrete figures from the Ricoh Arena, the home of Coventry City FC. The cashless payment scheme there has been running at Coventry City’s fixtures since 2008. Before the system, the average half-time transaction time was 63 seconds and it is now an average of 22 seconds, which means supporters receive their food and drinks quicker. The number of transactions as a percentage of the attendance has increased from 47 per cent to 57 per cent… “It has also been a commercial success with the average spend increasing in the concourses and corporate areas.” [From Coventry Telegraph – News – Business News – UK & Coventry Business – Ricoh’s cashless system a winner]

Looking at all of the evidence it seems fairly straightforward — and commercially sensible — to give festival patrons a contactless card or whatever that functions as their ticket and purse. But actually it could even do more than that.

In addition to allowing users to pay for purchases from a prepaid account, the wristbands also serve as a medical ID bracelet. A customer can input information about their health conditions into an Emergency Response Profile using a software program Vita developed. The health information is not actually stored on the wristband; rather, the wristband displays a phone number that emergency responders can call to get the information.

[From VITAband – Press]

So what’s the hold up? Maybe the guys selling hot dogs and beer? There are some losers in the bright cashless future. The concessionaires who under-report sales, the merchandisers who trouser the takings, the tax-evading elements of the value chain who prefer to be paid in cash. They must be the block, because the business case isn’t.

As an aside, in Swindon City-of-the-Future, an even more futuristic experiment has taken place. Swindon were one of the first clubs in the country to trial mobile ticketing for their fixtures, and made the first 150 mobile tickets available through Gates 28 and 29 of the Don Rogers Stand for their clash with Brentford last year. I shall next visit the County Ground, home of the mighty Robins, in a month to attend the visit of League newcomers AFC Wimbledon and will report back from this expedition to the future forthwith.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers


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