Payment in international online gaming - Expert interview
Read our interview with Verena Angerbauer, Head of Payment at Travian Games.
Mobile and E-payment in German soccer stadiums are advancing fast, even though these payment methods are still in an early phase. FC Schalke 04 introduced the first cashless system in their soccer stadium in 2001, however, even after sixteen years, cashless payment systems in stadiums are not always a given - although cashless payment systems would be perfect for halftime: huge numbers of fans rush to purchase beers and bratwursts in only a short time. There are many advantages to offering a cashless payment system during this time crunch, such as a faster moving line for the bar. Cashless payment systems and further RFID technologies (including ticketing, accreditation, entry control, registration systems and more) are becoming more and more essential in soccer stadiums. However, there are still those who are resistant to integrating this technology into stadiums country-wide.
One of the two largest sectors in mobile payment is the “proximity mobile payment”. In the “proximity mobile payments”, the payment process is made through a mobile device at a stationary POS. For this sector, credit and debit cards with an integrated NFC terminal are used or card payments are processed over a smartphone or tablet, which are used as mobile POS. With mPOS, a card-reading device is connected with a smartphone or a tablet. They are connected through NFC technology. NFC means “near field communication”: communication between two devices that are near one another. Both devices should be only a few centimeters from one another. NFC is extremely secure and is comparable to other data transmission systems such as bluetooth. After the transaction is completed, the customer receives a printed receipt or they can opt to receive it through email.
More than two thirds of the biggest soccer clubs use a cashless payment system. Still, the Bundesliga has not implemented a nationwide, cashless payment system. While developing a system for card payments is still in the talks, biometric authorization methods are already being developed. So, the stadium industry is split between two systems.
Open systems are not limited to one stadium. In most cases, they are normal cards with different functions, distributed by local banks. Different club edition cards are still standard cards issued by banks and vary only by decoration on the front of the card. The most popular open system in German soccer stadiums is the “cash card” or the successor “girogo”. Users of this system include Bayer 04 Leverkusen, VFL Wolfsburg, 1. FC Cologne, 1. FSV Mainz 05, FC Ingolstadt 04 and SV Werder Bremen, among others. Girogo is a function of the Girocard, founded in 2012 by the German credit industry. Through these cards, the first contactless payments at payment terminals and NFC-enabled smartphones will soon be possible. Payment cards that have giro-function can be used anywhere. Through an open system, the customer can use their card in all stadiums and stores that accept cards throughout Germany. This way, fans with the visiting team do not have to get a new card for the stadium that they’re visiting in order to buy drinks. On the other hand, this system can sometimes be disadvantageous, as the system requires a connection to the data center of the savings bank. Therefore, this system is incredibly dependant on the partner bank, both technologically and financially. Refinancing is possible through sponsors.
Cards in the closed system can only be used in one stadium. Prominent examples of clubs that use closed systems are FC Schalke 04 with the “Knappenkarte” or FC Bayern Munich with the “ArenaCard”. The advantage of a closed system is that clubs have complete control over the system and developments with it. Therefore, the system can be perfectly adapted perfectly to internal changes and develop it further. Payments can be processed autonomously as long as there is WiFi connectivity available. Additionally, cards in closed systems offer collection value for fans. For example, FC Schalke 04 offers their “Knappenkarte” with a special design at special events. However, there are certain disadvantages to the system as well. Customers can only use their cards in one stadium, so it is otherwise useless. For fans of the visiting team, there is an obvious disadvantage. Often, there is money left over in the account of the customer after their purchase that they can’t use in any other places except the stadium. Then, exchanging the card to receive cash back is often met with questioning. Due to this, FC Bayern Munich had around 2.4 million euros in leftover money on the cards in 2010. Since then, the club has not revealed any more details. If the money on the card is exchanged for cash, it is transferred through the post and subject to a lot of high fees. The consumer center of Hesse is even looking to take legal action against Frankfurt. The allegations include too small a number of staff and return points, long wait times and the aforementioned fees for trading in the card for cash.
The other side of mobile payments is “remote mobile payment”. In “remote mobile payments”, transactions are completed over a smartphone or tablet via the internet. The transaction is completed over a telecommunication provider, through SMS billing. For the customer, this technology is quick and easy to use. Additionally, the customer does not need to provide bank or online account information and is therefore not forced to provide any personal data. This means more security for the customers. There are also advantages to SMS billing for the provider. Nowadays, almost everyone owns a smartphone or a mobile phone with SMS functionality, so there is a massive potential market for providers. Other than that, the service is cheap to integrate and it’s easy to connect with a lot of potential customers through SMS marketing.
If a transaction is completed on a smartphone or mobile device connected to the internet, and the account is connected to a bank account or a credit card, this is done through a “wireless application protocol” (WAP). This method of mobile payment is also called m-commerce. M-commerce includes orders over mobile phones at Zalando and ordering taxis over the Uber app.
A survey revealed that 69% of soccer fans would choose an open system for their club if they could make the decision. Additionally, according to the EURO Kartensystem GmbH, 44% of those surveyed found it irrational to offer a card that you can load with money before a game and give the card back after the game. Another aspect is the amount time this process consumes. 36% of those questioned say that the process of picking up the card and returning it takes too long. The open system is better for guests, as the remaining amount on the card be used at another game in a different stadium.
Contactless payments, whether in open or closed systems offer a large number of advantages to soccer stadiums. So what are the advantages for the club and their members exactly?
Sales up to 25 euros can be processed through the contactless system. This helps kiosks avoid large piles of small change and reduces the costs of cash-handling. The contactless system is also advantageous for the caterers. Through reducing cash payments, the payment process is optimized and efficient, so twice as many customers can make purchases quickly before the game begins, during halftime or after the game. The kiosk will save costs through cashless payments and there is an obvious increase in revenue, as many more customers can be served. It is also important to consider further possibilities of evaluation concerning the average amount spent and the daily revenue. Through a contactless system, the payments are more hygienic, because fans just tap their card rather than handing cash over to the cashier. How much does the stadium experience influence the fans positivity?
There are obviously advantages for fans when avoiding payments with a large pile of small change, including the hygenic aspect. Of course, there are even more, bigger advantages. A chipcard doesn’t only keep a record of the cash amount available on the card, but also contains information about membership, season tickets and electronic entry cards. For the customer, this is a practical idea that already makes sense at the overview. An open system is fan-friendly, as fans do not need to purchase an extra stadium card as a deposit, as their prepaid card is already connected to their bank account. Furthermore, the remaining money on their card can be used in other stadiums, games and more. Throughout Germany, there are around 420,000 cash cards and more than 19,000 places that accept girogo. Additionally, contactless payment offers higher security, as the customer does not need to give out their personal data.
The 1. FC Kaiserslautern uses the NFC Wallet App “tap-it” in their stadium as a payment method. Tap-it is a digital wallet that contains the justpay-card that can be used in the Fritz-Walter-Stadium as of the beginning of this year. The advantage of the tap-it app is that customers can also use the app offline. Additionally, the app honors coupons and discounts. It’s also possible to look at all transactions on the app in one page. The customer has an overview of their account and can save plastic through having no physical card. “Payment Solution”, the manager of the payment system “justpay” announced insolvency. In addition to 1. FC Kaiserslautern, the clubs Hertha BSC Berlin, Eintracht Frankfurt and Dynamo Dresden suffered from this. How they will recover is still to be determined. The 1. FC Kaiserslautern Club announced that they will soon be introducing a new payment system.
This development also entails deeper technological changes for the environment. How compatible are contactless systems? Mobile payment with smartphones, apps and e-wallet solutions must be accepted in more run of the mill stores throughout the country and industries, in order to push its way into soccer stadiums.
Read our interview with Verena Angerbauer, Head of Payment at Travian Games.
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