- Mercedes-Benz Stadium and Tropicana Field are first US sports stadiums to end cash payments
- Both venues have reported shorter waiting times in lines and improved business operations
- Teams from the NFL, NBA, NHL and Liga MX have contacted AMB Group about innovative model
AMB Group – which runs the Atlanta Falcons and Atlanta United – and the Tampa Bay Rays have transformed the sports stadium experience in the United States by respectively making Mercedes-Benz Stadium and Tropicana Field completely cashless.
Within a matter of weeks of each other in March, the venues became the first in the US to refuse to accept cash for all stadium-related purchases – namely parking, concessions and merchandise – only allowing payments through credit cards, debit cards, gift cards, or mobile devices.
The move has proven an immediate success for both stadium operators, significantly speeding up transaction times, reducing waiting lines and improving operational efficiencies.
According to AMB Group, 95 per cent of fans are reporting faster lines while average transaction size is 10 per cent larger year-on-year. The Rays, meanwhile, have reported that at traditional points of sale, staff are handling approximately five per cent more transactions during peak times. The introduction of cashless self-service kiosks has also helped reduce waiting times by approximately 50 per cent, with lines in some cases going down from eight minutes to two-and-a-half.
Fans at both stadiums have responded extremely well to the initiative, with indirect cash use – which is still made available on a limited basis to not disenfranchise customers – at a minimum. At Mercedes-Benz Stadium, slightly under one per cent of all transactions are made by universal Visa debit cards, which can be obtained at “reverse” cash-for-card automated teller machines. At Tropicana Field, less than two per cent of sales are made with gift cards, which fans can use cash to acquire at retail stores in the venue.
The move has enabled both stadium operators to streamline their business operations by removing the need for staff to carry cash around the stadium on match days to replenish stocks, count the cash afterwards , and then securely transport the money to banks. It has also decreased loss through lost monies and theft.
There are some costs involved, namely increased credit card fees due to higher use and the need for new technologies – such as Mercedes-Benz Stadium’s “reverse ATMs” – to enable the cashless model to work. But both groups have declared the initiative a huge success from both a fan engagement and financial standpoint.
With numerous sports rights-holders having contacted AMB Group about the initiative – including teams from the NFL, NBA, NHL and Liga MX, as well as the PGA Tour – it is clear that many more US venues will go cashless in the near future. Indeed, this year the Seattle Mariners have made specific areas of T-Mobile Park cashless as a pilot program while the Brooklyn Nets’ Barclays Center has also stopped accepting cash at most concessions stands.
More notably, the NFL, Miami Dolphins and Visa are considering staging the first cashless Super Bowl at Miami’s Hard Rock Stadium next year.
“I am hugely, hugely excited and optimistic about this business model. It’s not a question of if, but when other arenas do this along the way,” Steve Cannon, the AMB Group chief executive, tells SportBusiness. “The Super Bowl is now considering going cashless based 100 per cent on the experience in Atlanta – that’s how excited they are. We’ve not seen a downside.”
‘Fans don’t come to wait in lines’
For AMB Group – which is owned by Home Depot co-founder Arthur Blank – the cashless initiative at Mercedes-Benz Stadium is a direct extension of the venue’s innovative “fan-first” food pricing strategy.
When it opened in 2017, the $1.6bn stadium immediately revolutionized the stadium concessions model by offering the lowest food and drink prices – by far – of any major sports team in the US, with $2 hot dogs and bottomless soft drinks, $3 pizza and $5 cheeseburgers among the options.
As a result, in the 2017 Voice of the Fan surveys, both the NFL Atlanta Falcons and MLS Atlanta United were rated No. 1 in all food and beverage categories: quality, variety, speed of service and price-to-value ratio. Many other US sports venues have since followed suit with heavily discounted concessions.
“Cashless is a stepping stone to an even higher level of experience,” Cannon says. “It’s about the fan and particular demands of the sports business model. In [American] football and soccer, your demand [for concessions] doesn’t come at a slow and steady, even pace, it comes in massive onslaughts at the breaks. In soccer, there is a big rush before kick-off and and at half-time and it’s the same in football, at the quarter breaks and at half-time.
“It is our ability to satisfy that demand that will have a direct impact on fan experience. Fans go to watch football and soccer matches and see concerts, they don’t go to wait in lines. And if they have to wait in line for 20 or 30 minutes to get a beer and a hot dog that has a negative impact on fan experience. For us taking cash out of the equation was a means to make the system run more fluidly and more efficiently,” he says.
Cannon went on to describe the mechanics of a cash-based sale, and the quickly accumulating impacts upon fan experience.
“If you think about a transaction, when people step up, they reach into their wallet and take out a $10 bill, then I’ve got to make change for that $10 bill. That change-making process can take up to 20 seconds. And 20 seconds aggregated across 650 points of sale with thousands of people waiting in line really adds up,” he says.
To prepare for going cashless AMB Group spent all of 2018 testing the proposition. Going into the pilot period, the ownership group established that 40 per cent of all transactions among Falcons and United fans were made in cash in 2017, with 60 per cent by card or mobile devices.
Initially, 10 cashless points of sale were added to Mercedes-Benz Stadium. Following a positive response, this was increased to 15, then 20 and finally 25 cashless points of sale by the end of the year. Notably, in this trial time period the cashless-to-cash payment ratio changed from 60:40 to 70:30.
“We looked at the data and measured the fan experience after every event. We saw no negative impact on fan experience and no negative impact on transaction numbers,” Cannon says. “Based on all of that, it gave us the confidence to go cash-free.”
To give supporters time to become acquainted with the new system, 10 “reverse ATMs” were installed throughout Mercedes-Benz Stadium, which let fans exchange between $10 and $1,000 in cash for universal Visa debit cards that can be used both inside and outside of the stadium. AMB Group is paying for all transaction fees.
These machines were also added so as not alienate lower-income supporters who do not possess bank accounts or credit cards. The cashless model more broadly has become a controversial socio-economic topic in the United States, with governments in Philadelphia, San Francisco and the state of New Jersey this year banning cashless stores in their respective jurisdictions in order to protect the access of all of its citizens to the marketplace.
“For us from the beginning, it’s been all about the fan. We didn’t want to disenfranchise anyone,” Cannon says. “We know there are people in the US, and specifically in Atlanta, who are unbanked people…they are cash-only people. We went about this in as thoughtful a way as you possibly could and we hope the reverse ATM will serve as an example to others than you can do this without disenfranchising people that really are cash-based.”
The cashless initiative was an immediate success with the cashless-to-cash payment ratio going from 70:30 to 99:1 per cent almost immediately. “It is a phenomenal movement in a relatively short period of time,” Cannon says.
The only issue AMB Group has faced has been communication, especially with third-party events, to ensure that all visitors are aware that the facility is cashless.
“It’s one thing to communicate to your regulars, your season-ticket members who come week-in and week-out but for a concert, these are people who might not be familiar with the building,” Cannon says.
A few extra reverse ATMs were specifically added for the Mexico v Venezuela men’s soccer friendly in June as, Cannon says, “we assumed it might be an audience that had a higher demand for cash.”
According to Cannon, AMB Group has saved a significant amount of money and man hours by no longer handling cash. He says:
“Cash movement, cash security and cash counting was the equivalent of about 35 heads, which is really significant and it’s all gone away, we have none of that now,” he says. “You get the removal of that cost component and the inefficiency of moving cash around the building and then there is shrinkage. Theft in a cash business…even if you have lots of controls in place, money flows into pockets that goes out the building and even with the best system in the world you cannot make that a watertight situation. That’s another upside.”
Fees from credit card companies have gone up with increased overall usage, but AMB Group bargained heavily to secure more attractive rates.
Challenge of cashess in-seat vending
The Rays became the first US sports team to announce they would go cashless in January 2019. But they became the second to implement it after AMB Group introduced the initiative at an Atlanta United game on March 10, two weeks before the Rays’ first game of the current Major League Baseball season.
Like Mercedes-Benz Stadium, Tropicana Field tested going cashless throughout 2018, initially with the stadium parking lots.
“We saw that as a low-risk area. If there were really issues with the fan adoption, there are other parking areas adjacent to the facility so it’s not like people would be stuck in any way,” Bill Walsh, Tampa Bay Rays vice president, strategy and development, tells SportBusiness. “We made our parking operations cashless in 2018 and that went very well, better than we expected, and there was much less pushback than we would have thought. That gave us the confidence to be a bit more aggressive inside the facility, particularly with food and beverage.”
From there, the Rays gradually introduced some cashless self-service kiosks around the venue and made some areas cash-free, notably the popular Budweiser Porch and Third Base Food Hall. By the end of the 2018 season, the proportion of cashless transactions increased from 25 per cent to about 60 per cent.
“We got folks used to what we were doing, we were able to talk to them about it along the way at every step and that gave us a lot of confidence going into the 2019 season to be able to pull the trigger and make this full conversion,” Walsh says.
In order to assist fans who preferred to use cash, the Rays initially employed roaming staff to advertise and sell gift cards to cash-only customers waiting in line so that they were able to make cashless payments at the point of purchase. Following a positive response by fans, the Rays ended this policy after three months. The team still sells gift cards in retail stories but, according to Walsh, less than two per cent of all transactions are made this way.
The biggest technological challenge for the Rays – and it is one that affects Major League Baseball ballparks in particular – has been making in-seat vending via hawkers cashless.
“We have been through a couple different iterations of hardware and trying to find the right software/hardware mix to be able to do that seamlessly. I would say we’re there now, but it has taken us a few months to get there,” Walsh says.
For the Rays, the goal has not been to make money but to improve the fan experience. “At this point we’re an early adopter and while there are financial benefits, there are costs as well. It’s very difficult to measure a direct ROI [return on investment] on a project like this,” Walsh says.
“We’re willing to go through this process on a cost neutral, even losing a little bit of money, just to be able to push the technology forward and learn about it and understand how we can grow into it over time. We didn’t do it to make money, we did it to improve the fan experience,” he says.
Unlike the high-attendance Atlanta United and Atlanta Falcons – playing in a gleaming new venue – the baseball club is posting Major League Baseball’s second-worst average attendance in a 29-year-old venue it is trying to leave.
“Ironically, people often associate these types of initiatives with flashy new buildings,” Walsh says. “But the truth of it is for us we’re in an aging building with a lot of friction points and a lot of challenges in terms of addressing speed of service and getting fans back to their seats quickly.”