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Cashless festivals: Who’s profiting?

Categories : Cash facilitates budgetary control, Costs of cash versus costs of electronic payment instruments
January 29, 2019
Tags : Card payments, Costs of payments, Efficiency
Yet another festival in Australia drops cash transactions leaving consumers to wonder who’s the winner of the cashless game.
Communication Team / Equipo de Comunicación

This post is also available in: Spanish

Many festivals have been going cashless these past few years. One of the latest examples is Field Day in Sydney, Australia. On 30 December 2018, the event announced on its Facebook page that it would be going cashless, requiring that attendees pay with Visa, Mastercard or a prepaid – a request that did not please everyone.

Field Day provided a number of arguments such as a faster service at the bar (no time wasted looking for change), less hassle when dancing (no money bouncing around in your pockets) and greater security (no risk of theft or loss). They went as far as to say that cashless is better for the health of attendees as virtual money doesn’t bring any germs!

Although Australians are used to cashless transactions where cash accounted for only 37% of transactions in 2016 – not everyone seems to agree with Field Day’s decision. Indeed, it’s the 1.2% surcharge applied to each transaction which leaves a bitter taste. In addition, studies show that consumers tend to spend 5-10% more when paying with other payment methods other than cash because it feels easier, as Field Day suggested.

Because surcharges are gaining traction with cashless transactions, the Australian Competition and Consumer Commission set a law to ensure that businesses charge only what it costs them to process a payment such as bank fees and terminal costs – nothing more, nothing less – to prevent merchants from overcharging consumers.  

Another downside (or rather upside for the festival)? Festival-goers often fail to retrieve leftover money or are only allowed to get discounts on other events, profiting organizers once again rather than participants.

This post is also available in: Spanish