CASHLESS PAYMENT & RFID - Stadionwelt 1 Whitepaper - CASHLESS PAYMENT & RFID in the sports industry

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  • ©2012 BTD GROUP

    19.06.2012 Whitepaper Cashless Payment Version 1.0

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    CASHLESS PAYMENT & RFID in the sports industry

    Status Quo and Future Development

    Whitepaper

    19.06.2012

    Version 1.0

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    Index

    1 Whitepaper - CASHLESS PAYMENT & RFID in the sports industry ................ 3

    2 Current Situation – Value of Cashless Payment ........................................ 3

    3 Cashless Payment in Sports environment ................................................ 5

    3.1 Technical overview ............................................................................ 7

    3.2 “Different faces” of cashless payment ................................................. 11

    3.3 Critical requirements and parameters regarding cashless payment ......... 15

    3.4 Financial aspects of cashless payment system ..................................... 17

    3.5 General benefits of a contactless RFID cashless payment system...........20

    4 Case Studies / Success Stories .............................................................. 23

    4.1 Allianz Arena / Weser Stadion - implementation of cashless payment &

    other technologies within a stadium environment....................................... 23

    5 Hidden & Underestimated Potentials and Future Trends ............................ 25

    5.1 Hidden & Underestimated Potentials ................................................... 25

    5.2 Future Trends .................................................................................. 27

    6 Risks and Challenges ............................................................................ 30

    6.1 Technological Risks........................................................................... 31

    6.2 Financial Risks ................................................................................. 32

    6.3 Project challenges ............................................................................ 32

    7 Conclusions - Role of BTD ..................................................................... 34

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    1 Whitepaper - CASHLESS

    PAYMENT & RFID in the sports

    industry

    Over the last decade the concept of a cashless payment system and other

    solutions based on RFID technology (e.g. access control, ticketing, accreditation,

    registration system, etc.) have become an integral part of a stadium and arena

    environment. Nevertheless, despite its broad acceptance and advantages

    numerous leagues and clubs are still hesitant to introduce such a system. This

    research conducted by BTD offers an overview to consider the current status and

    future trends a cashless payment system entails for sport clubs, leagues, major

    tournaments and venue operators. With additional information regarding detailed

    system descriptions, successful case studies, identification of potential risks and

    underestimated potentials, the decision-makers are helped to prepare or

    evaluate their plans and strategies concerning the potential introduction of a

    cashless payment system.

    If you need any further information or you would like to discuss the content of

    this Whitepaper with us please contact whitepaper@btd.de.

    2 Current Situation – Value of

    Cashless Payment

    A current study ”World Payments Report 2011“ carried out by renowned

    companies Capgemini and The Royal Bank of Scotland (RBS) revealed a trend to

    show a global growth of non-cash payments which went up by 6.8% (per year)

    between the periods 2001-09 and in 2010 by a further 7.8%. This research also

    predicts that the volume of non-cash payments transactions will rise in future

    years from 14% to a staggering 37% in some regions of the world.1

    1 WRP, 2011, P. 4

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    Number of Non-Cash Transactions by Region (Billion), 2001, 2007-20092

    The USA is currently the largest non-cash payments market in the world. A study

    produced by the Federal Reserve System titled, “2010 Federal Reserve Payments

    Study” disclosed that the usage of debit cards in the US increased from 2006 to

    2009 by 14.8% and by 21.5% for prepaid cards (in the same time-period). This

    significant increase of transactions with debit and credit cards amounted to a

    total of 15.6 billion3 in the US market.

    In spite of the worldwide rise of cashless payments, the percentage of cash

    handling especially for lower amounts (under 25 $) is still fairly high even within

    mature economies such as the US, UK, Canada, Germany and Australia. As an

    example, the payment behavior in Australia (2011) which is similar to other

    developed economies, is displayed in the following chart showing that cash is still

    the most frequent payment method depending on the actual amount and point

    of purchase4

    2 Capgemini, RBS, EFMA, „World Payments Report 2011“, P. 9

    3 The 2010 Federal Reserve Payments Study, 2011, P.11

    4 Capgemini, RBS, EFMA, „World Payments Report 2011“, P. 20-21, FirstData,

    Market Brief “Consumer Payment Preferences for In-Store Purchases”, P. 3 ff.;

    Reserve Bank of Australia, “Cash Use in Australia: New Survey Evidence”, 2011;

    Payment history in Germany (orig. Zahlungsverhalten in Deutschland), Deutsche

    Bundesbank, 2009, P. 50 ff.

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    Payment methods by payment size in Australia5

    3 Cashless Payment in Sports

    environment

    In Germany, the first cashless solution was implemented by the VELTINS Arena

    in 2001. In the German stadium and arena sector, the cashless payment system

    is primarily based on contactless RFID technology which has become ever more

    popular. Currently there are 13 stadiums and multifunctional arenas in

    Germany’s 1. Bundesliga which have or are already in planning to install such a

    solution.6 Moreover, 6 of 8 of the European Championship 2012 venues in

    Ukraine and Poland provide contactless payment solutions for spectators.7

    5 Reserve Bank of Australia (www.rba.gov.au), “Cash Use in Australia: New

    Survey Evidence”, 2011

    6 Stadionwelt, Zugang/Ticketing & Bezahlsysteme, 2011, P. 32

    7 www.polishguide2012.pl, Polymath Consulting, The Cashless Stadium/Events,

    October 2011

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    Multifunctional concept8

    The presence of cashless payment solutions in major European leagues, with

    some exception is still nevertheless in the very early stages.

    Specifically from the viewpoint of top sport clubs, venues, operational companies

    or major sport and leisure events, it is beneficial to implement a solution like the

    cashless payment system integrated within a multifunctional conception. The

    goals are to significantly enhance the fan experience and to leverage business

    potentials through smart technology solutions.

    By now there are several sophisticated RFID-orientated implementations on the

    sports and leisure market. For instance, the famous motorsports complex, the

    “Nurburgring” in the German Eifel region is completely operated on the basis of

    an RFID card. The visitor is not only able to carry out payments anywhere

    onsite, but also to use the card as an entrance medium to the different

    attractions including the race course, concessions and funpark.9

    In the stadium environment there are two examples which illustrate the success

    and potential an RFID and cashless payment system has. These are the Allianz

    Arena, home to Bayern Munich & 1860 Munich as well as the Weser Stadion,

    home to Werder Bremen which are further detailed in the case studies in

    Chapter 4. A multifunctional cashless payment concept does not only apply to a

    8 Source: www.security-technologynews.com

    9 www.nuerburgring.de

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    single club or a venue, but additionally as a potential centralized solution where

    for example, a domestic football league could consider. In Holland and Belgium

    for example, both leagues already offer a centralized FanCard System and as a

    result, a multifunctional cashless payment concept could be seamlessly

    integrated in similar way. A leagues demands naturally require more

    sophisticated solutions than ones for a single sport site.

    This complex conceptual design of a centralized solution however contains

    various aspects outwith the framework of this whitepaper but require intensive

    research in order to come to a