New playbook for payments as stadiums reopen

February 4, 2021 11:00 AM

Even at limited capacity, sporting events remain a hotbed for payment innovation. In years past, Super Bowls, Olympics and smaller events have experimented with ways to streamline payments for large crowds. This year the crowds may be smaller, but there's the added imperative to accommodate social distancing and contactless payments.

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“I think cash used in stadiums will disappear within the next five years,” said Kelley Knutson, president at Netspend, a subsidiary of Global Payments. “Right now it’s about delivering a safe, reliable contactless payments experience in the stadium. Looking forward, it will be around creating a more holistic experience for the fan that not only includes loyalty, but also enriches the experience, takes out friction and makes them want to engage more with the team both inside and outside of the stadium.”

While the pandemic kept patrons away, venues such as Kansas City Chiefs’ Arrowhead Stadium took advantage to add an entirely new payment system by launching Chiefs Pay in partnership with Tappit. Dodger Stadium also revamped its payment system through the installation of 5G wireless connections and a new point of sale system. Other stadiums may follow suit to meet a growing demand for mobile ordering and other contactless payment options.

COVID-19 has caused a number of changes in how food is consumed and delivered. Gone are self-serve buffets and noticeably absent in many of the stadiums that have partially reopened are many of the concessions, including the “hawkers” who run up and down sport venue stairs selling hot dogs, peanuts and beer. The layoffs in the sports industry have disproportionately affected food industry workers as stadiums play to empty or mostly empty stands.

However, the food and beverage concessions play an important role for both the fan watching an event and the collective of companies delivering the experience including the sports franchise, concessionaire and stadium operator.

In the pre-COVID-19 era 72% of U.S. fans purchased food and 76% purchased a beverage most of the time when attending an event, and international fans were close behind with 52% purchasing food and 62% purchasing a beverage, based on data from Oracle Stadium of the Future Report.

When consumers return to stadiums en masse, they will expect a new food ordering and payment experience. The most popular option consumers chose in an Appetize Technologies’ Contactless Technology Survey, fielded in October 19-21, 2020 among 2,081 U.S. adults, was mobile ordering from their stadium seat at 51%. The second most popular individual option was selecting items at a self-service kiosk at a concession stand at 18%. The third most popular individual choice was to pay the concession hawker selling beer and hot dogs with a mobile handheld terminal.

Respondents reported that avoiding waiting in concession lines was the biggest driver behind choosing mobile ordering, at 39%, followed by 30% who said convenience of ordering from their seat was most important. The third most important factor was “helping to avoid contact with stadium staff” at 17%.

“Fans will be happy to see more digital engagement when they return to stands, especially when it comes to food and beverages,” said Netspend's Knutson. “It will start at home with pre-orders and continue with new engagement points in the stadium. This will also help stadiums and concessionaires better manage inventory. You’ll no longer have to settle for a Miller beer because the beer guy ran out of Budweiser.”

“The stadium experience begins way before you sit in your seat to watch the game," said Suresh Palliparambil, CEO of Purewrist, a maker of wearable payment bracelets. “Imagine wearing a bracelet with your team’s logo and colors that has your metro pass on it so you can get to the game. It also holds your ticket so you can speed through a contactless admissions gate. Purchase drinks and snacks or buy merchandise at kiosks using an NFC reader to pay. The whole experience is being reimagined with payments being an essential tool to deliver safety and convenience.”

Despite the allure of new technologies such as mobile ordering, only 32% of respondents in the Appetize survey said that if mobile ordering was available it would make them attend a game sooner. Almost an equal percentage said it would not, at 34%, and another 34% said that they weren’t sure if mobile ordering would be a factor.

Social distancing during the pandemic is top of mind for most consumers, and remains a major barrier to the return of fans in stadiums. Almost 71% of Americans said that social distancing was very important or important for them when attending a live event, compared to 19% who stated it was somewhat important and about 9% who said it was not so important or not important at all, according to Appetize.

Stadium operators will now need to consider how they provide social distancing and manage capacity concerns, in addition to delivering new payment technologies.

As stadium operators and professional sports franchises move to eliminate cash and drive alternative technologies such as contactless cards, wearables and smartphone mobile ordering, they will need to contend with the fact that not all fans who attend a stadium event are readily prepared to adapt to the change.

The Pew Research Center found in 2018, before the pandemic, over one-third (34%) of Black consumers reported that they used cash for all or almost all purchases — double the rate of Hispanic (17%) and white (15%) consumers. Since the COVID-19 pandemic, a November 2020 PaymentsSource Future of Money Study found that only 36% of Black consumers had changed their primary payment method for in-person purchases, compared to 37% of Hispanic consumers and 30% of white consumers.

To address this disparity, stadium operators, concessionaires and team franchises have been installing “cash-to-card” conversion kiosks. The trend began before COVID-19 as some stadiums were going cashless, such as Mercedes Benz stadium in Atlanta, and now it’s been picking up steam with the most recent partnership between Delaware North and InComm Payments.

The Delaware-InComm agreement includes installing “cash-to-open loop card kiosks” in 25 major U.S. venues that include NFL, MLB, NHL and MLS pro franchises. The fans will be able to load up $500 on the cards and will be able to use them when they leave the stadium at retail merchants.

Long concession wait-times were a pet peeve for stadium attendees, even before COVID-19, but now are only outranked by overall health safety. A 2020 survey of 1,500 U.S. adults from Tappit found that the top three factors affecting an individual’s decision of whether or not to attend a game in a stadium were sitting too close to other spectators (78%), long lines at concession stands (52%) and reduced atmosphere at the venue (45%).

Once the coronavirus vaccinations become more widespread and consumer safety concerns are assuaged, stadium operators and concessionaires will still need to address the friction caused by long lines at a concession stand.

Consumers reported a strong willingness to spend more money at a venue if the concession wait times were shorter, according to an Oracle survey. About two thirds of German spectators (68%) and American spectators (66%) said that they would spend more money on food and beverages if the wait times were shorter.

“This time period is giving operators a chance to reimagine the whole fan experience,” said Knutson. “Everyone understands that if they can change how food and beverages are sold, then fans will buy more. A lot more. Pre-order and a pick-up point in the stadium will be big. Operators will be able to push discounts to incentivize fans to buy. Knowing when your order will be ready or delivered to you will change the whole dynamic.”