2 Jan 2024
Why Top Venues Choose Tokens and Closed-Loop Payment Systems
In the world of payments at events, an interesting comparison is almost never made. That between closed-loop cashless systems and tokens, why do top venues choose these systems? Let's take a look at the advantages and make a comparison!
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Speed and convenience at the bar
Both tokens and cashless systems excel in speed at the bar. With tokens, this is mainly due to the simplicity of the transaction - prices are neatly rounded to a token, and a visitor can pre-calculate what they need to pay. In closed-loop cashless systems, the speed comes from not being dependent on an internet connection, and moreover, you save on the action of handing out and counting tokens.
When compared to card transactions, there are numerous situations that regularly cause delays:
- Mobile phone running out of battery, making it impossible to complete payment.
- Insufficient funds in the checking account: "Wait, let me transfer some money from my savings account!"
- Connecting/processing the transaction at the terminal can sometimes take painfully long.
- "Oh, this machine does not support credit cards."
With tokens, personnel costs are sometimes mentioned as a concern. However, with token suppliers like Coinmonster, this is not an issue, as they provide unmanned machines for token dispensing.
2. Susceptibility to malfunctions
When organizing an event, you always have to consider things that can go wrong, like power outages and internet glitches, as they are part of the reality of an event. This is also a key reason why large events still opt for 'ol-reliable': the token. Only at the start of the event is it important that the internet and power remain stable. Once the majority of visitors have their tokens, you are protected against disruptions.
Closed-loop payment systems, like Tactile's, have often found other solutions to provide stability. One of these solutions is the local processing of transactions, so you can continue even without internet or power. Additionally, visitors can put credit on their account before the event starts, so you don't have to worry about an internet/power outage.
3. Visitor experience & revenue
The essence of an event is about human connections and experiences, stepping away for a while and immersing yourself in a new world. Tokens & closed-loop cashless systems cater to this feeling in an ideal way. You can see that leading venues & events choose such reliable systems, for example:
- Disneyland America - closed-loop
- De Zwarte Cross - tokens
- Tomorrowland - closed-loop
- Lowlands - tokens
However, there are situations where an open-loop system may be the better choice. This is especially the case at events that are not completely closed and where many passers-by come and go. In such circumstances, an open-loop system provides the flexibility and accessibility needed to serve a wide range of visitors, without having to adapt to a specific payment system.
Closed-loop systems like Tactile's, for instance, offer an event application that allows visitors to transfer money to each other for a round of drinks. It's not as fast as using tokens, but it's an interesting alternative.
4. The cost of a transaction
It makes sense that those who contribute to your event also earn from it, like the musicians who perform, the stage builders, and the bartenders. However, there can sometimes be a bitter taste left by the high costs of card transactions or credit card payments. Suppliers of event card payment systems sometimes charge high amounts per transaction (from 25 to 50 cents) and in some cases even a percentage. So, a visitor who buys a beer 10 times could end up causing €2 to €5 in costs.
This is another area where tokens & closed-loop systems save a huge amount. With tokens, visitors only make 1 or 2 transactions per day, or even less (for example, if they get tokens together). Tactile experiences a similar effect; by topping up in advance and being able to get the money back, they average 1.3 top-ups per visitor!
Conclusion
In conclusion, the choice between tokens and closed-loop cashless systems depends on the specific needs and challenges of each event. Both methods have their unique advantages, such as the speed and simplicity of tokens, and the innovative and disruption-resistant features of closed-loop systems. Importantly, both systems contribute to a smooth, enjoyable visitor experience and increase efficiency, while also helping to reduce operational costs.
