5 ways digital stadium payments are changing the game

May 15, 2019 10:40 AM

It used to be when going to a sporting event at a stadium fans always needed to bring plenty of cash with them to purchase souvenirs and food. Now with a number of stadiums moving toward cashless ecosystems, such as Tampa’s Tropicana Field, the way fans pay for goods and services in-stadium are changing fast.

As new stadiums are being launched across a variety of sports around the globe with the latest entertainment options, older stadiums are using technology and premium culinary offerings to stay competitive and keep their fans engaged. Additionally, as new payments technology gets launched in retail stores and online, a number of companies are trying to parlay those innovations into the stadiums including card networks, hospitality companies, fintech startups and others.

In the 2018 FIFA World Cup, Visa reported that contactless payments accounted for 50% of in-stadium Visa purchases in the 11 host cities. Additionally, Visa reported that Poland was the top country, with 74% of in-stadium purchases coming via contactless, which Visa counts as contactless cards, mobile devices or wearables.

American fans spend on average more for food and beverages than fans from other countries. The average U.S. fan spends $42 on food and beverages when attending a sporting event compared to roughly $24 for Canadian and Australian fans and just under $17 for German fans. One factor that could be a driver on the amount spent is whether fans buy both food and beverages, as Americans do, or prefer to purchase a beverage over food, as Germans do.

According to the recent Stadium of the Future report by Oracle, 72% of U.S. fans purchase food at the game and 76% purchase a beverage. In Germany, a country well-known for its excellent beer reported 71% of fans purchasing a beverage while only 50% purchasing food. In Canada 63% of fans purchase a beverage and 57% purchase food. Overall internationally, 62% of fans purchase beverages and 52% purchase food.

When it comes to ways to modernize the stadium food and beverage experience, one element stood out the most – fans want to stay in their seats.

In every country surveyed in the Stadium of the Future report by Oracle, except Germany, the ability to order food and beverages without leaving your seat was the most popular improvement that fans wanted to see. In Germany, it was having quicker transactions times.

While Germans rate quicker transaction times as most important, this was a close second in most other countries. In terms of maximum acceptable wait time for food and beverages, U.S. fans were most accommodating by willing to wait 11.7 minutes, compared to Australians who would be willing to wait up to 9.7 minutes and Germans just 8.8 minutes.

The impact of improving the food & beverage ordering experience was that most fans would be willing to spend more money. German fans were willing to spend 68% more on purchases if the wait time was cut in half. U.S. fans would spend 66% more and UK fans would spend 61% more. In other words, the message to stadium operators is clear – if the time it takes to get concessions is reduced, fans will spend more money.

One of the biggest challenges to encouraging new fans to attend sporting events, as well as getting existing fans to return, is the ever–increasing cost of attendance and concessions. More and more stadiums are rolling out premium products to encourage fans to indulge in something they may not be able to get at home. Attending a Washington Nationals MLB game, fans can purchase on an eight pound $59 StrasBurger; and at the New Orleans Pelicans NBA game, fans can spend $18 on a Seafood Mac n’ Cheese according to the Bleacher Report.

While a Dungeness Crab Pretzel from the San Francisco 49ers or the $75 Gridiron Burger from the Arizona Cardinals may be on some fans’ “must eat” list, most will want just a draft beer and hot dog — but those items still don’t come cheap in most stadiums.

According to the 2018 Team Marketing Report on NFL In-Stadium Concession Prices, the average price of a draft beer across all 32 teams was $8.17 and a hot dog was $5.23. However, there are several stadiums that charge $10 for a cup of “suds” and $6 or more for a hot dog. Forcing fans to reach into their wallets for paper currency really brings home the high cost of stadium food. Converting those to digital payments could take out some of the pain of handing over almost $40 for a pair of beers and hot dogs.

While going cashless in stadiums and in retail stores is currently a hot topic, attempting to cater to consumers’ trend toward digital payments, certain parts of the population may not be able to make purchases in cashless venues. In fact, there is now a political tide to banning cashless stores in many cities and states such as Philadelphia, New York City, San Francisco, Oregon and New Jersey. These cashless bans would also affect stadiums operating in those cities and states, as they would be considered retail outlets.

Based on the 2017 FDIC National Survey of Unbanked and Underbanked Households, approximately 25% of U.S. households are considered unbanked or underbanked. Politicians argue that forcing these groups into a cashless retail environment will unfairly penalize them.

Fans around the globe are interested in using new technologies to improve their in-stadium purchase experience, but within certain limits. Contactless and mobile payments ranked among the most attractive payment options sport fans were interested in using. This is in no doubt connected to the fact that in many countries contactless and mobile payments have reached the mainstream. For example, recently U.K. consumer card payments reached the tipping point whereby half of all transactions are now contactless.

Loaded value on ticket was the second most popular option among sport fans attending stadiums. Part of the allure of loading a ticket with additional value could be due to budgeting since the process allows the consumer to carry less cash. Additionally, as paper tickets go digital, tucked into an Apple Wallet or into a team’s app, it makes it much easier to carry and redeem that stored value.

There was less interest among international sport fans in the use of biometrics as a means of payment for food and beverages at the stadium, potentially since these are newer technologies that still remain to be proven in the real world. There is also the fact that, unlike cash, there is no anonymity when it comes to purchasing a $25, 18-inch D-Bat Corn Dog at the Arizona Diamondbacks baseball game when a fan’s face is attached to the purchase.