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Cashless festivals: a new trend to make more money

Categories : Cash is trust
October 12, 2017
Published in : Cash substitution, Digital money, Distrust, Privacy and anonymity
An increasing number of festivals shifted to cashless, favouring benefits over participants' freedom of choice and convenience.
Communication Team

For the past few years, an increasing number of festivals worldwide are adopting cashless payments based on contactless wristbands, no longer accepting traditional payment instruments such as cash or cards. The introduction of this payment method might at first seem convenient and effective, but it has been demonstrated that it also enables festival organizers to make additional profits by pushing people to consume more, to the detriment of participants.

The cashless concept was introduced for the first time in 2011 by the famous Sziget festival, which takes place annually in Hungary. It has then paved the way to a new trend in music festivals, which consists of using a contactless cards or wristbands provided by the organizers to pay for food and beverages. Participants are required to load money on a cashless account before the event or to link it to a credit card. Once at the festival, each participant retrieves his or her personal wristband to be used exclusively at the event. Thereafter, users can demand the remaining money only during a short period following the festival, generally from 1 to 4 weeks. Organizers argue that this payment method offers security to festival-goers as nobody carries cash. In addition, the processing is quick and efficient, enabling them to sell more products within the same timeframe.

Nevertheless, the introduction of such a system comes with a price, which is paid by consumers. Various studies have demonstrated that when people cannot tangibly feel the money , they tend to spend more as paying become a “painless” and “frictionless” action. Indeed, festivals have registered an average increase in returns of 5-10% when switching to cashless, while the implementation of such a system already costs at least USD 10,000. What’s more, the majority of consumers fail to retrieve their leftover money, often because the deadline to do so has passed or because the process is deliberately too complex. Some festivals even refuse to refund consumers, offering them discounts to be used at other events instead.

The few organizers that refuse to implement a cashless systems argue that a festival is a free space, favoring consumer’s freedom of choice and convenience over benefits. What’s more, they remind that such a system allows organizers to follow participants’ consumption real time, thus exploiting personal data without consumers’ agreement. Indeed, privacy and freedom are two concepts that do not seem to be high on cashless festivals’ priorities. On the contrary, they encourage people to over-consume while organizers keep the change.

To read the original [French] article, please click here.

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