A cashless craze?
When Atlanta’s Mercedes-Benz Stadium completed its first year as a cash-free venue in 2019 — before the global coronavirus pandemic reached America’s shores — AMB Sports & Entertainment CEO Steve Cannon thought sports venues going cash-free was an idea that spoke for itself.
The venue’s combined 16% increase in food and beverage spending at Atlanta Falcons and Atlanta United games and its ranking as NFL fans’ favorite when it came to F&B and speed of service was all the proof he needed that cashless would eventually be the norm in sports venues.
Now it could be a necessity in the era of COVID-19, as venues seek ways to eliminate literal touchpoints and create a more healthy environment for fans once they eventually return.
On May 1, AMB held a video conference on its cashless system and the interest spoke volumes — 900 people registered, including representatives from the NFL, MLS, MLB, NBA, NHL, PGA Tour, NASCAR and NCAA.
“Who knows how long we’ll be operating with a latent amount of fear in our fan bases’ minds about touching and extra contact?” Cannon said about the urgency to go cashless. “It’s incumbent on all of us to think hard from the fans’ perspective. To me, don’t try to launch it half-hearted; go all in.”
In an April report on the future of cash and digital payments, the Switzerland-based Bank for International Settlements noted that scientific evidence suggested the probability of coronavirus transmission via cash is low when compared with other frequently touched objects, such as credit card terminals or PIN pads. Still, the level of Google searches about the topic demonstrates the public’s concern over cash handling.
While there’s a sense of urgency to change to cashless systems, teams and venues remain cautious given the potential pushback from fans who might not have access to bank accounts and smartphones, and those who want to protect their privacy. Also, major cities including New York, Philadelphia and San Francisco have prohibited businesses from refusing to accept cash as payment.
Absent a vaccine, the coronavirus pandemic has given teams and venues a certain degree of cover from these issues as fans expect facilities to step up their hygiene protocols.
Beyond eliminating cash handling, which can spread diseases, going cash-free provides a wealth of data to venues and teams about their consumers and buying patterns; speeds up transaction times; and can offer some cost savings. AMB said Mercedes-Benz Stadium saved $350,000 over 49 events this past year, with the savings coming from areas such as reduced personnel costs and fewer incidents of theft.
Other venues that have gone cash-free include Seattle’s CenturyLink Field, Salt Lake City’s Vivint Smart Home Arena and Tropicana Field in St. Petersburg, Fla. While Brooklyn’s Barclays Center has to comply with local laws requiring it to accept cash, 95% of its transactions are cashless.
Venues like Mercedes-Benz Stadium and Tropicana Field took more than a year to make the transition to cashless, but facilities pondering the switch now have a shorter timeline.
“The biggest hurdle in implementing [cashless] right away would be if your card processing system could not handle the increased number of transactions in a timely fashion,” said Greg Beadles, AMB executive vice president, chief financial and administrative officer.
Organizations will have to communicate to fans how cash-free will improve the fan experience; integrate new technology into their point of sale systems and mobile applications; make sure their IT infrastructure can handle the data load from the higher volume of transactions; ensure existing business partnerships are not adversely affected by the transition; and address those who don’t have bank accounts.
AMB executives said it has tackled that last point by installing 10 reverse ATMs from Ready Credit that exchange cash for fee-less debit cards that can be used inside and outside of the stadium. Only about 1.2% of the fans who have gone through Mercedes-Benz Stadium’s gates have used the cash-to-card kiosks.
The facility also wanted to emphasize a contactless payment option and went with Apple Pay because it was able to seamlessly integrate with its point-of-sale system vendor NCR. Contactless typically involves a consumer using an app on his or her phone to complete a transaction without having to use a standard credit card keypad.
The Tampa Bay Rays also fielded numerous inquiries about the team’s move last year to go cashless at Tropicana Field, said Bill Walsh, vice president of strategy and development for the Rays. The team’s primary motivation was to improve the fan experience by reducing wait times in concession lines. But there were other benefits.
“We’ve seen some pretty substantial operational savings from not having to manage a large footprint of cash in the building,” Walsh said.
Walsh said the team saved $150,000 in operating and manpower costs and was close to revenue neutral with the switch to cashless, when technology investments and increased credit card processing fees were taken into account.
The Rays also had concerns about fans who didn’t bank. “What we found through some of our testing was that this was most likely a much smaller group than we had feared or wondered about,” Walsh said. “It really was less than 5% of fans this was impacting in a negative way.”
The Rays allowed fans to exchange cash for a reloadable gift card that doesn’t expire and can be used throughout Tropicana Field. In 2020, the Rays will place Ready Credit’s cash-to-card kiosks in Tropicana Field for cash exchange, in addition to the gift cards it uses from Givex.
“We can put some of these systems in place without incurring huge costs and still make sure that they’re taken care of and that they have a good experience,” Walsh added. “Since then, that number’s actually dropped pretty dramatically and now with all the messaging that we’re doing, I think people have learned a lot about the program and the system and there’s less hesitancy buying into it. So roughly less than 2% of our transactions are done using these cards that people exchange cash for.”
There are multiple ways to go cashless. Companies such as U.K.-based Tappit are helping teams, venues and events with the transition. The company counts EPL team Manchester City as a client.
The Transition to CashlessHere are some of the companies providing expertise to sports facilities.
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Tappit provides a backend service that integrates its software with a team or venue’s mobile application and POS system. The company can also integrate an RFID bracelet or reverse ATM within the venue’s existing payment infrastructure. The bracelets store the consumer’s payment information so no card has to be swiped.
Going cashless provides venues and events many opportunities to learn more about fan behavior, said Tappit CEO Jason Thomas. He shared how the Australian Grand Prix introduced its system to fans.
“The Australian Grand Prix used our solution and they gave fans the chance of being in the safety car for the Grand Prix before it started,” Thomas said. “And anybody who pre-loaded money onto the cashless solution was put into the draw for it.”
The Australian Grand Prix loaded over $400,000 through the RFID bracelets that Tappit provided for the race.
“If you’re going to ask fans to effectively use something where the data goes back to the club, you need to assure the fan that they’re going to use that to really give them these initiatives and these incentives that fans love, and that fans can’t buy anywhere else, and make them feel special in that they’re really integral to the organization itself,” Thomas said.
Anthony Palermo is co-founder of Connect & Go, which specializes in RFID payment bracelets for venues and events. The company has worked with the Toronto Maple Leafs, the NBA and the PGA Tour.
The wristbands his company provides cost 75 cents each, which includes software and support, Palermo said. Scanners for the wristbands cost $100 to $600 each and the amount of scanners needed for a venue depends on how many points of sale are in the building.
Palermo said that while no venue or event can guarantee a person from contracting COVID-19 or any disease, the sports and live event business has to invest in diminishing the chances of infection even if it’s ultimately a public relations exercise.
“Our industry is calling it cleaning theater,” Palermo said. “It’s not by any means diminishing the actual cleaning processes that’s happening; it’s about displaying them, communicating them, and making people feel at ease to come in because at the end of the day, whether those processes were happening, not happening, being good, not being good, you could still catch it anyway, so we need to make sure that people have confidence in our ability to create a safe environment for them, even though there’s no guarantee.”
Editor’s note: This story is updated from the print edition.