Stadiums Host a Payments Battle Between Vets and Upstarts
Stadiums, concert halls and other entertainment settings have long been venues in which terminal providers like NCR or Oracle would likely have units in place, offering a vast array of functions tailored to those businesses.
But newer players like Appetize and Revel, promising cloud-based networks and more mobile point of sale (POS) terminals, have been hitting their own stride.
It's created an interesting battleground for terminal network providers, with NCR working to include cloud-based options, and Appetize working to provide more functions for its system.
Stepping forward from its historical position as part of systems with premise-based servers, rugged hardware built for the various conditions, and terminals focusing on business operations, NCR is building a future solution for the cloud environment.
"It's a multi-phased project for us, architecting our venue solutions for the cloud, doing the POS processing in the venue, but pushing data to the cloud via Web services," said Dennis Davidson, general manager of travel and entertainment for NCR.
Nearly a year ago, NCR created its Retail One cloud-based hub to help retailers upgrade terminals rather than completely replace networks to add new technology."We have the functionality now, but not the cloud, but others don't have near the venue functionality we have, but they have the cloud," Davidson added. "We are kind of racing to the same endpoint from two different perspectives."
No matter how NCR approaches its enterprise-business operations in the future, it will likely stick with "purpose-built" hardware that operates well in ambient light, can handle different types of weather, and the hectic pace of a stadium concession stand.
"Some of our more rugged terminals can last 10 years," Davidson said. "But there are some hybrid solutions taking place out there, where we could provide a tablet-based POS for executive suites at the stadium."
Appetize says it can deliver all of the functions a stadium setting needs, but in the more current trend of offering a tablet-, mobile- and cloud-based environment.The Santa Monica, Calif.-based company began with mobile apps designed for fans to choose seats and pre-order concessions at stadiums. That led to the creation of Appetize Activate, a point of sale system for outdoor festivals and concession stands, two years ago.
Since then, Appetize is making its mark in the enterprise sector, deploying 4,400 mobile POS units to Live Nation amphitheaters last year and finishing nearly 10 deployments of 500-plus units in other locations already this year. In the coming weeks, the company says it will deploy 700 units to a National Football League stadium.
Legacy companies have been around a long time, but are "slower to move," said Kevin Anderson, co-founder of Appetize. At the same time, some mobile POS players have built systems for one-terminal shops, or a few terminals in a coffee shop and, at the most, maybe a three- to four-site deployment, he added.
"We find ourselves in between those two camps in this sector right now," Anderson said.
The Appetize tablet-based POS terminal is built to stay in one spot, but is capable of being moved around as needed.
"A big benefit of being on a tablet is it can run for several hours if the power went out, going between online and offline," Anderson said. "They are set up to be used in challenging environments because these big buildings with a lot of concrete and steel and 60,000 bodies presents a challenging environment, to say the least."
The size of a stadium comes into play for many vendors as well, because they have to consider the workforce and the setting in which the terminal will operate, said Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.
This would be especially true if the food service provider was providing the terminal network as part of its contract with the stadium owner or team owner. NCR, in fact, can sign an agreement with any of the three – the food service provider, the stadium owner or the team owner.
"Service people working in that environment are generally minimum wage, and many are teenagers, so you have to keep the functionality simple," Arminio said.
In working with the quick-service food industry years ago to implement debit acceptance at the terminals, Arminio said those businesses were most concerned with keeping the terminal operation streamlined with simple icons representing the different meals.
"With a desire for merchants in these stadium settings to be able to use iPads, if the sales are not complicated, they can move away from more sophisticated and high-function systems to something more streamlined," Arminio added.
Appetize partnered with Freedom Pay earlier this month to offer customers EMV chip card acceptance, NFC contactless payments and point-to-point encryption security.
Like most vendors in the enterprise business space, Appetize is not hearing from stadium clients that they are in a hurry to incorporate EMV. For now, it is too slow of a process for concession stands and the fear of chargebacks is not overwhelming, considering the vast majority of transactions are below $50.
"We are seeing a lot of waiting on EMV, maybe as something for 2017," Anderson said. "Some want to play completely by the rules and implement it now, which is why we want to offer it, while some of the major leagues are telling teams to hold off on it."
NCR's Davidson sees the same trends for EMV.
"We are working with our clients on it, but they are not on the same timeline as the liability shift [last October]," Davidson said. "They will get there, but not this year."
After all, the teams understand the operational challenges of incorporating EMV, even though both Visa and MasterCard are offering software changes that speed up the EMV transaction process. "You don't want longer and slower lines during a Super Bowl or World Series," Davidson said.