Festipay expects the number of cashless transactions to reach 7 million at this year’s festivals, representing a considerable increase of 27% compared to last year’s 5.5 million.
In Hungary, the proportion of electronic payment solutions grows roughly 5 percent every year, and the fastest spread of innovative payment solutions is at festivals: in 2015, the most frequently visited Hungarian festivals were 90 percent cashless.
Most recent data shows that almost every other person in Hungary has a contactless bankcard, and 55 percent of the 98 thousand POS terminals in operation support this technology.
Festival organizers were among the first to recognize the increasing demand for cashless payments and the new technology continued its unfaltering spread amongst them: this year, Festipay electronic payment solutions will be used at as much as 18 festivals, increasing the number of cashless festivals to roughly half again as much compared to last year.
One of the main reasons for the growing popularity of festival cards and contactless bankcards is that they allow transactions to be completed in no more than 3 to 5 seconds instead of the usual 20 to 25 seconds. The simplified process acts as a purchase incentive, as well.
“According to our statistics, festival card users use their cards increasingly actively, and a 2 to 4 percent increase can be witnessed in this area every year. They also more lavish in spending: they spend up to 10 to 30 percent more during festivals than those who pay by banknotes. So merchants at festivals going cashless can expect volume increases as well, compared to the previous years,” László Márki, CEO of Festipay Zrt. declared.
At the same time, electronic payments are increasingly popular for more than just convenience; they also come with measurable economic advantages. Cash indeed has a price: according to data from Magyar Nemzeti Bank (Hungary’s Central Bank), payment by banknotes and coins involves a social cost of HUF 388 billion per year. Most of these costs are paid by merchants; although cash payments have fewer fixed costs than electronic transactions, the variable costs of handling and transporting banknotes could account for up to 0.35 to 0.50 percent of merchants’ income, depending on the volume of incoming amounts. As cashless payment solutions gain ground, security expenditure associated with cash handling decrease, making storage costs easier to plan. Moreover, booth rental becomes simpler and more transparent, as well: instead of the earlier fixed-fee rental system, which was less favorable for retailers, now merchants can pay income-based rent based on their actual turnover.