Emerging Payments

Hersheypark Drops Payment Wristbands as Disney Dives In

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Walt Disney Co. is about to distribute "MagicBands," high-tech wristbands that allow Disney World parkgoers to make payments and skip longer lines. Hersheypark tried a similar idea last year, and the results were far from magical.

After a year of testing contactless payment wristbands, Hershey launched the technology for the 2012 summer season at its Hershey, Pa., theme park. Patrons were already able to use wristbands to access lockers at the park, and the payment aspect was supposed to make those wristbands even more useful.

It didn't work out.

Image: Bloomberg News

"The park will no longer be utilizing the radio frequency identification bands known as the 'Easy Pay' program," park spokeswoman Kathy Burrows said in an e-mail. "The numbers the last two years are very low."

Patrons simply were not participating in the program, which was designed to offer "a cashless visit to the park," Burrows says. The Easy Pay program allowed park visitors to load a minimum of $20 to a maximum of $300 to an account managed through the wristband. There was no extra fee for the wristband itself, Burrows adds.

The Hersheypark website no longer mentions a wristband option for payments.

Disney plans for its wristbands to include functions other than payments. It plans to use the bands to distribute FastPass tickets, which allow park patrons to skip lines if they agree to visit a ride at a particular time. Disney also plans to use the bands to allow animatronic and costumed characters to identify patrons by name.

Disney's MagicBands are part of a broader initiative, which analysts estimate to cost between $800 million and $1 billion, according to a New York Times article this month about the Disney project.

Companies trying to use payments wristbands generally face three major issues, says

Adil Moussa, payments strategic marketing analyst at Omaha, Neb.-based Adil Consulting.

"If you lose a wristband, anyone can pick it up and use it because it is hard to link it back to the customer, so that’s a major issue," Moussa says.

Companies have to offer a compelling reason to use the wristbands, such as discounted pricing, Moussa adds. Finally, companies need to put heavy marketing behind the wristbands to make consumers aware of the benefits of using them, Moussa says.

Several other companies are trying to weave payments into wristbands and other articles of clothing.

In another example, Nathan Performance and Visa Inc. in October introduced a payment wristband for athletes, providing contactless payment capabilities through a Visa prepaid chip.

MasterCard Inc. made a strong push during the summer of 2011 for payment wristbands at concerts and festivals. Festival organizers gave payment wristbands positive marks as an effective way to manage entrance to events. In some cases, patrons or supporters considered VIPs could receive a wristband prior to an event with funds already preloaded.

During the 2011-2012 hockey season, the Tampa Bay Lightning introduced a team jersey with an RFID chip embedded in the sleeve for season ticketholders to pay for and receive discounts on concessions and souvenirs inside the stadium. The team continues to offer the jersey as part of its season ticket package.

PushCoin, a Geneva, Ill.-based mobile payments company, offers a wristband payment system as a way for parents to provide funds to their children, rather than giving them cash.

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