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Music festivals have long been a test for cashless payments and the new fintech that enables them, which is understandable when you think of the numerous benefits that cashless festivals provide1. Whilst our last blog examined the use of these payment methods at sporting events, noting that sporting venues have been notoriously slow in their adoption, the same cannot be said about festival organisers. This is perhaps due to the multi-day nature of many festivals and their remoteness, meaning that access to cash becomes more of a logistical issue at these events. The success of pioneer cashless festivals, including Lollapalooza (Chicago), Coachella (Indio, California), and Cocoon In the Park (Leeds), has encouraged widespread adoption of easy payment and closed-loop payment systems for events, such as RFID bracelets, payment apps, prepaid cards, and the acceptance of mobile wallet payments. This trend has been further accelerated by the Coronavirus pandemic, due to a widespread belief that contactless payments are more hygienic than cash2.
But why exactly are festival goers and organisers alike such a fan of going cashless?
1. Safety
Cash is easy to lose and easy to steal, making it a liability in a festival setting where you typically don’t have access to a secure place to keep belongings or have the option to lock them away. Mix in alcohol and large crowds and keeping track of anything becomes infinitely more difficult. With a wristband or making use of a mobile wallet, you immediately reduce the number of objects you have to keep safe3. Particularly when paying with your mobile phone, the need to use face ID or enter a passcode immediately makes your money more difficult to access and, therefore, less attractive to thieves and fraudsters.
For the vendors and organisers of events, using cashless systems is also safer, reducing employee theft as well as cash mishandling, subsequently increasing revenue and keeping profits secure.
RFID bracelets have been heralded as a way of ensuring better personal safety. The ability to upload contact details to the bands means parents can put them on their children at family-friendly festivals in case their child gets lost, making it far easier to reunite them with their parents than the traditional solution: the lost-child tent4. Similarly, if someone is inebriated or passes out, it becomes far easier for security and medical teams to find out who they are and who to contact if they can simply scan their wristband.
2. Reduces queues and crowding
Being able to tap and go vastly reduces the time it takes to checkout when paying, reducing friction and meaning queuing takes far less time than when everyone is paying for transactions in cash5. No more asking the next food vendor along if they have exact change for a tenner or being turned away from the bar because they can’t break a 50.
Closed-loop payments systems also have the benefit of organisers being able to see which areas/vendors within the festival are crowded or more popular in real-time, allowing them to divert people away from busy areas or plan to compensate for extra footfall6.
3. Reduces overheads
Ensuring access to cash at festivals is quite the logistical nightmare, facilitating the transportation and restocking of ATMs, securing cash and payments to vendors onsite, and ensuring the availability of petty cash. This becomes all the more difficult when factoring in the remote locations of many festivals.
This administrative burden also necessitates further staff, not only because payments with cash take longer, meaning more people need to be manning the tills, but also due to the need for transportation drivers, extra security, and paying for the extra hours needed to count up cash at the end of the day7.
4. Generates pre-event revenue
By implementing closed-loop systems such as pre-paid cards, bracelets, or apps, festival organisers generate pre-event revenue through attendees pre-purchasing credit. This means that organisers gain a better understanding of what their expected profits will be and see an earlier return on investment8.
5. Generates more profit
Cashless festivals generate more revenue than festivals that take payments in cash, with data from festivals showing a 22%-30% uplift in revenue due to greater spending9. Cocoon in the Park in Leeds, reported an even greater uptick, seeing a 39% increase just two years of switching to cashless payments10.
6. Data
One of the greatest benefits of using closed-loop payments systems is the amount of consumer data you gain access to. You can see how much people are spending, where, and what on, make predictions about their future spending, and drive personalised customer recommendations and experiences that increase revenue11. Organisers can even offer rewards to their customers, which is something Coachella did in collaboration with American Express, offering attendees rewards based on location, experiences, and purchases12.
Sources:
4 Tappit
8 Ibid.
9 Tappit
11 Tappit
12 Get Token
