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Contactless vs cashless payments – what’s the difference and which is best?

There is a huge difference between contactless and cashless, and by making the wrong decision, clubs and events can miss out on vital data about their customers, meaning they will be unable to gain insights to help maximise sales, reduce administrative costs and improve the fan experience.

Contactless and cashless payments are terms that are often used interchangeably but they refer to different things. For the U.S. market ‘touchless payment’ is a very popular term too. There are however some noticeable differences so here’s a quick overview:

What are contactless payments?

Contactless payments are credit cards that use either near-field communication (NFC) or radio frequency identification (RFID) technology. Bank card payments, RFID (commonly used in wristbands or cards) and mobile wallets such as Apple Pay are all examples of contactless payments. Instead of swiping or inserting your card into a reader, you simply ‘tap-and-go’ (put your card near the reader) to make your payment. 

Contactless payments, where customers pay with their existing contactless bank-issued debit or credit cards, send all the data and information about transactions to the usual banks. Contactless payments are processed by a third party – a bank. This type of payment system is referred to as an open loop payment system.

What are cashless payments?

Put simply, cashless payments are any type of payment that is made without using cash. Bank transfers, credit card payments, mobile payments and digital wallets are all cashless payments. The customer doesn’t need to have any cash on them to complete the purchase.

As you can see, contactless payments are also cashless payments, but not all cashless payments will be contactless payment.

In the event and venue industry, cashless payments typically refer to the use of a closed loop payment system. A closed loop payments system operates without any third party (banks) involvement. Instead the end users (event attendees and vendors) directly join the payments system. RFID wristbands and bracelets and white label digital wallets are both examples of cashless payment systems.

Key takeaway:

Cashless payment systems give vendors ownership over the entire vendor/customer process. Vendors have complete control of their own financial ecosystem and retain all payment data as a result.

So which is the best type of payment system for your event or venue – should you go with contactless payments or cashless payments?

For a festival, club, stadia or any type of event, cashless payments can offer a number of advantages over contactless payments. Cashless payments can be used by event owners to avoid the inevitable network issues found on greenfield sites; to reduce operating costs, to  maximise revenue and to collect rich customer data. Here’s 12 reasons why cashless payments win every time.

Cashless RFID payment systems avoid network connection problems

 

  1. Anyone who’s ever been to a large-scale event or greenfield site and has struggled to get a mobile signal will agree that WiFi / 4G can be a huge issue when 1000’s of people are gathered in the same place. Unlike with contactless payments, cashless payments can work independently of the networks and there’s no power requirements. There’s a huge risk when using contactless payment systems at large-scale events that network connection problems could shut down the ability to pay at the event.

A great opportunity to maximise revenue

 

2. Breakage revenue – RFID cashless payments offer a new revenue stream through breakage.

 

3. Transaction speed –  for a large event, transaction speed is vital. A study conducted by American Express found that closed-loop transactions are 53% faster than traditional transactions. 

 

4. Cashless payments increase spend-per-head through online top-ups both before and during the event. 

 

5. Pre-event revenue. The online top-ups before the event itself improve cash flow.

 

6. Sponsorship deals. A branded cashless payments system – such as an RFID wristband offers a new sponsorship deal. And the data you glean from going cashless can provide your sponsors with detailed insights into performance.

 

Cashless payments can reduce your operating costs

 

7. With no wired LAN installation cost, no cash transfer, drop or uplift costs and no merchant service fees, cashless payments help you to manage your operating costs effectively.

 

Immersive attendee experience

 

8. Cashless payments provide the foundations for adding digital access control and brand activations. Integrate access control with your cashless payments system to manage entry to restricted areas and reduce your security costs in turn. Why not create an event currency to really let your fans take some time out of reality for the duration of your event!

 

The power of data

 

9. Effortlessly collect contact details and consumption data from all your attendees including customer insights, buying habits, popular items. Have complete control over how customer information is collected and used. 

 

10. Track attendees’ behaviour, including types of purchases, consumption peaks, etc. This is impossible with contactless payment as all data is collected by the bank alone.

 

11. Create targeted marketing campaigns with your attendees’ contact details and consumption data. Measure the results of your actions with precise indicators, including open rates, turnover generated, and so on.

 

12. Identify and reward your most loyal attendees to develop a long-lasting link. Grow your community with trusted ambassadors.

 

As you can see, there are numerous advantages in opting for cashless payments using a closed loop payments system. If you’d like to find out more, or discuss your requirements in more detail, then get in touch with us.

 

 

 

 

 

 

 

 

 

 

 

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