A few weeks ago we compared RFID to Apple Pay and other mobile wallets, and explained why these types of solutions won’t reasonably replace RFID for events any time soon.
However, mobile payments are facing serious challenges not just from RFID but also from contactless credit cards, such as the ones provided by Visa and Mastercard, which are actually seeing much higher adoption rates.
Naturally this leads to the next question – if contactless credit cards are all the rage, how do they stack up as a solution for running cashless events, compared to RFID-based systems?
While there are similarities between the two methods – mostly in terms of the speed and comfort in which transactions can be handled, there are also some key differences. Here are 5 points to consider:
1. Contactless cards still need a stable internet connection, which is far from certain at festivals
We’ve written before about the costs of festival wifi and the problems that can arise in a busy festival environment when your payment system requires constant online connectivity, as is the case with credit card transactions.
To quickly recap, festivals are often held at relatively remote locations, and have hundreds or thousands of people using connected devices simultaneously. This often results in spotty internet connections, which in turn forces organisers to invest in costly temporary internet solutions to avoid disruptions in bar sales that are critical to their financial bottom line.
Well, guess what? Contactless credit cards suffer from the exact same issue, and you’ll still need to consider adding a few extra tens of thousands of dollars to pay for your temporary ISP. The alternative solution to this conundrum is also the same: managing vendor transactions through an RFID payment system that supports offline operations – so you get all the advantages of cashless, without biting your nails over whether the local 3G network will come through.
This doesn’t mean contactless payments, popular as they are with consumers, should be shunned from your festival altogether. In our events we offer contactless as an option in all of our top up stations, which are placed in locations where connectivity is guaranteed – i.e., away from the bars where the internet is almost certain to go down due to congestion.
2. RFID gives you full visibility into vendor sales
From an organiser’s perspective, credit card transactions are less transparent than RFID payments. This can potentially make financial reconciliation more complicated and prone to intentional or unintentional mistakes, especially when you’re getting a 20% rebate on all sales through that vendor at your event.
If vendors are taking cards at your event, they can bring their own terminal, or take cash; whereas in an RFID event you have complete visibility into customer spend since transactions are handled by your POS systems.
Even if you’re running your event in a hybrid model, where customers can use both their RFID wristbands and cash or credit card, they will tend to use the former rather than the latter – and anyway will have less spare change in their pockets, as they will most likely use it to top up their wristbands. This means most transactions will be handled by the fully-transparent RFID payment systems, rather than the opaque cash-and-credit ones.
To summarize this point – we don’t need to tell you that bar sales are a critical part of your bottom line. Knowing the exact figures at any given moment is a major advantage that you should not give up so easily.
3. RFID can produce real-time data insights into purchasing and inventory trends
RFID doesn’t just make it easier to understand who owes how much to whom. It’s also a valuable tool for optimising your event operations to the benefit of all involved – organisers, vendors and consumers.
By having real-time transaction and inventory data processed in real-time through a centralised POS system, you can graph purchases patterns to understand stock popularity and consumer trends. E.g., if in the first 3 hours vodka apples are selling extremely well, you can share this insight with vendors to make sure there are enough apples and vodka to continue riding the trend.
These types of ‘hacks’ are impossible when you’re working with disparate payment systems which are managed by each vendor independently. Again this is not a problem unique to contactless credit cards – but rather a benefit of RFID that you will be forced to cede by going with cards of any type.
4. Wristband top-ups and refunds can be another source of revenue
One of the reasons RFID cashless events are, on average, 15-20% more profitable than traditional ones, is the ability of savvy event planners to encourage more sales and open additional revenue channels.
One of the main ways to do this is to get clever with top-up amounts to encourage more sales. E.g., if beers are $8, you might set the minimum top-up amount to $15, so that the customer will need to load the next topup amount in order to purchase the two beers since there is a shortfall of $1.
It’s also customary (and perfectly reasonable) to have a minimal amount of remaining balance for refunds after the event, and experience shows that even when above the minimum, consumers will not always request the refund.
None of this is possible with contactless credit cards.
5. RFID is the best way to minimise cash usage at your event
As much as it would be nice to be 100% contactless, the cash economy will still be around for a while. However, by keeping cash usage to top up stations, rather than at every vendor, you’ll be reducing the prevalence of cash money and the risks associated with it to a bare minimum; whereas consumers generally expect any shop that accepts cards (contactless or otherwise) to also accept cash.
Limiting cash to a handful of top-up location is far more cost effective than having your entire event run on cash. Current statistics show a 4-6% decrease in theft and misallocated funds – which are inevitable when so many people are handling paper money.
Going cashless? Take the plunge to RFID
Contactless credit cards are great: they save time, encourage impulse purchases, and consumers love them. However, RFID is still the better way to go for events – owing to its robustness and reliability, the transparency and visibility it produces, and the revenues it can generate for organisers.