Payment Terminal

Technology is entwined with much of our day to day lives, with no better example than the growth of smartphone adoption, a device now seen as a must-have. Payment and banking is almost unrecognisable from ten years ago with online banking, mobile apps, ‘chip and pin’, contact-less payments and online payments.

At events, however, many attendees often find trying to make a simple credit/debit card payment can be a frustrating and unreliable experience. For ourselves as technology providers ‘credit card machines’ or PDQs as they are known, come top of the list of complaints from event organisers, traders and exhibitors.

These problems not only cause frustration for attendees but also present a serious issue in terms of financial return for traders and exhibitors, and their desire to be present at events. It is well documented that the ability to take contactless and chip & pin payments at events increases takings, reduces risks from large cash volumes and can improve flow and trackability.

So why is it such a problem? Much of the issue comes down to poor communication and misinformation on top of what is already a relatively complex environment. Card payments and the machines which can take payments are highly regulated by the banking industry meaning they tend to lag behind other technology, however, this can be overcome and a properly thought through approach can deliver large scale reliable payment systems.

Bad Terminology

A lot of the confusion around PDQ machines comes from the design and terminology used. Although the machines all look the same there are differences in the way they work. Nearly all PDQs use the design of a cradle/base station with a separate handheld unit. The handheld part connects to the base station using Bluetooth. This is where the confusion starts as people often describe these units as ‘wireless’ because of the Bluetooth, however, their actual method of connectivity to the bank may be one of four different types:

  • Telephone Line (PSTN – Public Switched Telephone Network) – This is the oldest and, until a few years ago, the most common type of device, it requires a physical telephone line between the PDQ modem and the bank. It’s slow, difficult and very costly to use at event sites because of the need for a dedicated physical phone line, however, once it is working it is reliable.
  • Mobile PDQ (GPRS/GSM) – Currently the most common form of PDQ, it uses a SIM card to connect to a mobile network to use GSM or GPRS to connect back to the bank. Originally seen as the go anywhere device, in the right situation they are excellent, however, they have limitations, the most obvious being they require a working mobile network to operate. At busy event sites the mobile networks rapidly become saturated and this means the devices cannot connect reliably. As they use older GPRS/GSM technology they are also very slow – it doesn’t make any difference if you try and use the device in a 4G area – it can only work using GPRS/GSM. As they use the mobile operator networks they may also incur data charges.
  • Wi-Fi PDQ – Increasingly common, this version connects to a Wi-Fi network to get its connectivity to the bank. On the surface this sounds like a great solution but there some challenges, firstly it needs a good, reliable Wi-Fi network. The second issue is that many Wi-Fi PDQs still operate on the 2.4GHz Wi-Fi spectrum which on event sites is heavily congested and suffers lots of interference making the devices unreliable. This is not helped by the relative weak Wi-Fi components in a PDQ compared to a laptop for example. It is essential to check that any Wi-Fi PDQ is capable of operating in the less congested 5GHz spectrum.
  • Wired IP PDQ – Often maligned because people think it doesn’t have a ‘wireless’ handset, but they are actually the same as all the others and have a wireless handset but it uses a physical wire (cat5) from the base station to connect to a network. In this case the network is a computer network using TCPIP and the transactions are routed in encrypted form across the internet. If a suitable network is available on an event site then this type of device is the most reliable and fastest, and there are no call charges.

All of these units look very similar and in fact can be built to operate in any of the four modes, however, because banks ‘certify’ units they generally only approve one type of connectivity in a particular device. This is slowly starting to change but the vast majority of PDQs in the market today can only operate on one type of connectivity and this is not user configurable.

On top of these aspects there is also the difference between ‘chip & pin’ and ‘contactless’. Older PDQs typically can only take ‘chip & pin’ cards whereas newer devices should also be enabled for contactless transactions.

Myth or Fact

Alongside confusion around the various types of PDQs there is a lot of conflicting and often inaccurate information circulated about different aspects of PDQs. Let’s start with some of the more common ones.

I have a good signal strength so why doesn’t it work?

The reporting of signal strength on devices does nothing but create frustration. Firstly because it is highly inaccurate and crude, and secondly because it means very little – a ‘good’ signal indicator does not mean that the network will work!

The issue is that signal strength does not mean there is capacity on the network, it is frequently the case at event sites that a mobile phone will show full signal strength due to a temporary mobile mast being installed but there is not enough capacity in terms of data to service the devices so the network does not work. A useful analogy is comparing networks to a very busy motorway. You can get on, but you won’t necessarily go anywhere. The same can be true on a poorly designed Wi-Fi network, or a well-designed Wi-Fi network which doesn’t have enough internet capacity.

In fact you can have a low signal strength and still get very good data throughput on a well-designed network. Modern systems also use a technique known as ‘beam-forming’ where a device is not prioritised until it is actually transmitting data which means it may show a low signal strength which increases when it is doing something.

On the flip side your device may show a good signal strength but the quality of the signal may be poor, this could be due to interference, poor design or sometimes even weather & environmental conditions!

Wi-Fi networks are less secure than mobile networks

There are two parts to this, firstly all PDQs encrypt their data no matter what type of connection they use, they have to so that they meet banking standards (PCI-DSS) and protect against fraud. The second aspect is that a well-designed Wi-Fi network is as secure, if not more secure, than a mobile network. A good Wi-Fi network will use authentication, strong encryption and client isolation to protect devices, it should also be the case that all PDQs are connected to a separate ‘virtual network’ to isolate them away from any other devices.

You have to keep logging into the Wi-Fi network

Wi-Fi networks can be configured in many ways but for payment systems there should be no need to keep having to log in. This problem tends to be seen when people are trying to use a payment system on a ‘Public Wi-Fi network’ which will often have a login hijack/splash page and a time limit.

A multi-network M2M GPRS/GSM SIM is guaranteed to work

Sadly this is not true, although a PDQ with a SIM card which can roam between mobile networks and use GPRS or GSM may offer better connectivity, there is no guarantee. Some event sites have little or no coverage from any mobile operator and even where there is coverage, capacity is generally the limiting factor.

Mobile signal boosters will solve my problem

Mobile signal boosters, or more correctly signal repeaters, are used professionally by mobile operators in some circumstances, for example inside large buildings, to create coverage where signal strength is very weak due to their construction (perhaps there is a lot of glass of metal which can reduce signals from outside). In the UK the purchase and use of them by anyone outside of a mobile operator is illegal (they can cause more problems with interference). For temporary event sites they provide little benefit anyway as it is typically a capacity issue which is the root cause of problems.

A Personal hotspot (Mi-Fi) will solve my problem

Personal hotspots or Mi-Fi devices work by connecting to a mobile network to get connectivity and then broadcasting a local Wi-Fi network for devices to connect to. Unfortunately, at event sites where the mobile networks are already overloaded these devices offer little benefit, and even if they can get connected to a mobile network the Wi-Fi aspect struggles against all the other wireless devices. On top of that these devices cause additional interference for any existing on-site network making the whole situation even worse.

The Next Generation & the Way Forward…

The current disrupters in the payment world are the mobile apps with devices such as PayPal Here and iZettle. Although they avoid the traditional PDQ they still require good connectivity, either from the mobile networks or a Wi-Fi network, and hence the root problem still exists.

Increasingly exhibitors are also using online systems to extend their offerings at events via tablets and laptops which also require connectivity. An even better connection is required for these devices as they are often transferring large amounts of data, placing more demands on the network. Even virtual reality is starting to appear on exhibitors stands so there is no doubt that the demand for good connectivity will continue to increase year on year.

What the history of technology teaches us is that demand always runs ahead of capacity. This is especially true when it comes to networks. For mobile operators to deliver the level of capacity required at a large event is costly and complex, and in some cases just not possible due to limits on available wireless spectrum.

4G is a step forward but still comes nowhere close to meeting the need in high demand areas such as events, and that situation will worsen as more people move to 4G and the demand for capacity increases. Already the talk is of 5G but that is many years away.

For events, realistically, the position for the foreseeable future is a mixed one. For small events in a location well serviced by mobile networks with limited requirements then 3G/4G can be a viable option, albeit with risks. No mobile network is guaranteed and performance will always drop as the volume of users increases as it is a shared medium. There are no hard and fast rules around this as there are many factors but in simple terms the more attendees present the lower the performance!

For any sizeable event the best approach is a dedicated event network serviced with appropriate connectivity providing both Wi-Fi and wired connections. This solution facilitates usage for Wired IP-based PDQs, Wi-Fi PDQs, iZettle and other new payment devices, as well as supporting requirements for tablets, laptops and other mobile devices, each managed by appropriate network controls.

With the right design this approach provides the best flexibility and reliability to service the ever-expanding list of payment options. What is particularly important is that an event network is under the control of the event organiser (generally via a specialist contractor) and not a mobile operator, as this removes a number of external risks. For those without existing compatible PDQs the option of rental of a wired or Wi-Fi PDQ can be offered at the time of booking.

The key in all of this is planning and communication, payment processing has to be tightly controlled from a security point of view so it is important that enough time is available to process requests, especially where temporary PDQs are being set-up as they often require around 10 working days.

NFC contactless are the next evolution

“Smartcard to wipe out cash”, a headline which sounds like it may have been used any time in the last few years, is actually taken from the Evening Standard in 1993 just before the launch of Mondex, one of the earliest smart card cashless payment systems.

Launched in Swindon, UK Mondex promised to revolutionise payments using what today is known as a ‘closed loop’ system where money is transferred to a smart card containing a chip and the card is then used to pay for items using a special reader until the virtual cash is used up.

It sounded great and launched to much fanfare but four years later it quietly disappeared never to be heard of again. Its lack of success is generally cited as being down to the hassle of loading the cash, the limited locations at which it could be used and the infrastructure required to support it. Soon after this chip & pin started to emerge offering an ‘open loop’ solution whereby the cash is debited directly from your bank account and within a few years this became the norm.

Skip forward twenty years and it feels like we are seeing history repeat itself.

For the last five years or so the talk of cashless payment at events has fuelled many a debate but the implementation and adoption in the UK at least has been very slow and fraught with issues. The basic idea has been the same as Mondex all those years ago – a closed loop system with the chip (now wirelessly contactable) typically embedded in a wrist band rather than a card.

Many of the same challenges still exist today – the hassle of adding credit to the wristband, the dedicated infrastructure required, limited areas of acceptance and redeeming unused balances. Then there is the user aspect, many of the benefits are for the organiser and promotor rather than the attendee. This is coupled with attendees having concerns about too much information being made available to the event about their purchases and payments.

The aforementioned issues with closed loop systems have allowed the next generation of open loop contactless systems to gain adoption at a much faster rate. Open loop contactless using an existing debit or credit card is a natural progression from chip & pin and removes many of the hurdles seen with closed loop. It is quite telling when one of the world’s largest closed loop systems – Transport for London’s Oyster card – is now moving to an open loop approach.

What is interesting is that in some countries there has been higher adoption of closed loop – the US for example. The US were much faster to the chip & pin party but have been behind the curve on contactless and this may have left a window for closed loop in the short term.

The question is where does this leave events who have several drivers to move to a cashless environment. With the rapid adoption of open loop contactless in day to day life coupled with several disrupters like Apple Pay, Android Pay and PayPal Here, all of which use an open loop approach with NFC (Near Field Communications) embedded in smart devices, the modern generation of event goers will move to the trusted services and closed loop will quietly die away.

What remains is the challenge at events in terms of how to deal with smart reader based payments as the infrastructure cost can be a hurdle to adoption. There are several components to this:

Universal Payment Terminals – The banking world needs to move faster in providing good quality payment terminals that are certified across multiple methods of communication (wired, Wi-Fi & mobile data) and multiple payment methods (chip & pin, contactless & NFC). Today different terminals have to be used depending on the connection method and payment type which means merchants have to hire terminals for use at events because they cannot use their normal terminal. A universal terminal would also make deployment on event sites much easier and cost effective.

Merchant IDs – Many smaller traders at events do not have the magic ‘Merchant ID’ required to set-up card based payment terminals. Merchant IDs are controlled by payment houses and can be costly and complex for very small businesses so a better mechanism is needed to facilitate access to open loop systems for those traders. This sounds like an easy area but it has some complexities due to money laundering issues. Systems such as iZettle help with this but carry (generally) higher fees.

Access to Data – A difference between closed loop and open loop for a promotor or organiser is the ability to easily access usage data. As closed loop is in the control of the organiser they get full visibility (although this can be seen as a negative by attendees). With open loop the data is held by the payment providers so to get a better view across the entire event (involving many merchant IDs) some form of agreed consolidated reporting would remove the concerns organisers have about visibility.

Providing Infrastructure – Open loop systems tend to have a slightly higher requirement when it comes to readers being connected to a network (although many closed loop systems are not as offline as promoted). A modern event has such high requirements in other areas for connectivity that adding in payment systems is not the concern it once was. It is now well accepted that providing access to contactless card based payments drives a higher spend so it should be recognised that an increased spend on infrastructure will reap returns overall.

In the last few years we have seen a rapid swing to providing a resilient payment environment across events and the feedback is very positive – fast and easy transactions, and an increased spend by attendees. It just needs more support from the banking world to resolve the last few issues and make the cashless (or near cashless) event a reality.

Notes:

Swindon Advertiser – How Smart was that?

Announcements from Apple always have a certain sparkle; their PR is the slickest, their presentation is faultless (although in this case it showed even the best can have technology problems as the video stream faltered frequently) and, most importantly, they have a knack of defining a market.

Apple were not the first with a portable mp3 player, yet the others are long forgotten as the iPod defined the genre. Before the iPad was launched in 2010 many, many tablets had come and gone. Arguably technology had finally caught up and the introduction of the iPad has allowed a generation to enjoy lightweight computing without overheating laptops on laps, creaking screens and tapping keyboards.

The announcement today of the iPhone 6, the iPhone 6 plus and the Apple Watch are exciting in themselves. The phone models are the extension of the brand we all know well; though this time with an increase in screen size (4.7” and 5.5” respectively vs the typical iPhone 4”). The Apple Watch is an extension of the handset with a screen that allows access to apps, information, maps and much more.

However, there is one absolutely critical technology included in all three products which the market has demanded for some time; Near Field Communications (NFC).

Can a push from Apple get cashless moving and vanish those queues?

Can a push from Apple get cashless moving and vanish those queues?

The inclusion of NFC facilitates payment for goods directly from the device. A swipe of the phone, or now watch, against an NFC reader allows the transaction to complete. Again other manufacturers have offered this for some time, but it takes an influencer like Apple to really drive customer awareness.

One thing Apple are experts at is understanding that it takes more than just technology to go from niche interest to mainstream – it’s about the complete package. The iPod owes much of its success to iTunes which in turn was successful because Apple had lined up a huge catalogue from all the record labels.

In this case it’s not just about the inclusion of NFC, it’s as much about the launch of Apple Pay where they have already lined up Mastercard and Visa as launch partners in the US, along with retailers such as Subway and McDonalds. In a smart move Apple has also said that with Apple Pay they have no access or visibility to the transaction data, quelling fears over data protection which could have been a hindrance.

How powerful will it be to use something on your wrist to process payment? Very.

What does this mean for events? So far open-loop and closed-loop contact less payment systems at events have seen slow adoption, partly due to implementation cost and lack of agreed standards, and partly due to customer resistance due to privacy concerns.

Although it will still take time for suitable penetration of the new devices this long awaited inclusion will accelerate and change the landscape for mobile/contactless payment and associated services.

Those without a strategy for contactless payment systems need to start working out how best to take advantage of a system which allows immediate transactions without the need to top up cash (and then bank it the other side).

It also puts into doubt the longer term viability of proprietary closed loop systems as users are more likely to trust well known established names which have a broader acceptance.

For event organisers it also means more consideration for the ancillary services like charging and, of course, connectivity which all of this relies on.

Whatever happens, if anything was going to highlight NFC technology to the wider world (whether what they buy has an Apple logo on it or not) this is it.

For some time we have been really keen to get together a group of thought leaders from the events industry to discuss a range of technology related topics. With a fantastic team effort this event, which we called ‘The Gathering’, was held on the 30th of March at Lords futuristic media centre. Each of the four panels was focused on a specific area of technology with industry experts giving practical guidance, their opinion and answering questions from the audience. The notes below highlight some of the points raised but a lot was covered in the five hours so they are just a very small window on the discussions . To keep the discussion about technology in events going we aim to keep the twitter hashtag #eventtech for questions and comments.

Ticketing and Cashless Payments – Tom McInerney facilitated a panel involving Paul Pike from Intelligent Venue Solutions and Darren Jackson from Ticketscript discussing the latest innovations.

  • Many events are now becoming aware of the customer data associated with tickets. The opinion of the panel was in many cases this is worth more than the face value of the ticket as events should be starting to build profiles from their customers which can then be the cornerstone of many other activities (such as loyalty schemes).
  • Loyalty systems may take the form of branded cards or RFID wristbands but the important element to consider is using these in more than just a ‘closed loop’ way, perhaps opening them up for eating out in the local area or purchasing merchandise providing another revenue stream for the event.
  • Paul Pike discussed trials which are under exploration for this year which would see significant steps in making cashless events a reality.

Social Media – Chaired by Ian Irving the panel included Andrew Cock-Starkey from Lords and Jonathan Emmins from Amplify discussing how events can use social media before, during and after an event.

  • Ian discussed how events should continue to focus on using social media as a core element, enlarging the community past just those that attended.
  • Lords Andrew Cock-Starkey talked about how they have developed a large following for their Twitter feed, using it for continuous commentary on matches and a channel for last minute tickets (which can then be tracked back using offer codes to get quantifiable value).
  • There was lively discussion on managing the ‘negative’ aspects of social media too, engaging with, rather than ignoring those who are complaining.
  • Many of the panel thought the key technologies of the future would be live streaming content to those not at the event and ensuring that those attending can access online resources.
The Gathering taking place at Lords Media Centre

The Gathering taking place at Lords Media Centre

Event Vision – Tom McInerney chaired a discussion between Dan Craig, Loudsounds and Dale Barnes from Virgin Media focused on the key technology elements events will be focused on in the future.

  • Dale talked about how as a major brand when he is asked to deliver services in temporary events locations it really helps to have a technology person to engage with and discuss practicalities. The requirements from sponsors will only become greater as events continue to look for ‘partners’ who can contribute to the event not just push product X.
  • The panel discussed how events which take place at the same locations year after year will become more focused on what investments can be made. Not just in terms of water and power but also internet presentation. In many cases arranging service over multiple years can generate significant savings.
  • Dan discussed how events are continuing to invest in backend systems to simplify event management but also share data quickly with suppliers so everyone has up to date information. Tools like Dropbox and Google documents were sighted as invaluable but increase the pressure on IT systems at events.

Applications – Joanna Wales from Ascot Racecourse, Adrian Strahan and Chris Green discussed the key elements to a successful application and the challenges which still surround creating an app which gains traction within what is becoming an increasingly crowded market.

  • The panel shared their experience of working applications released by several large customers, and that by working within the businesses to find the different things the application could deliver was critical to its success.
  • Chris discussed the issues of delivering a ‘cross platform’ application (i.e. one which works across Android, Apple, Microsoft and Blackberry) this continues to be a challenge however planning for a multiple release during the design and creation process can avoid painful re-working later on.
  • The panel discussed the Edinburgh Fringe application as a great example of an application that was really useful and improves the event experience.
  • Many of the audience thought that applications should be free for events, since trying to charge generally puts off those that might find it valuable. Some discussions identified that a good app will encourage more people to attend and get more out of the event.

Real World Experience – Chris Green, Mike Lang and Tom McInerney fielded questions from the audience and discussed how some of the customers they partner with had developed an on-going technology strategy encompassing many of the topics that had come up during the day.

  • Several questions from the audience focused on how smaller events can take advantage of technology without huge investments. Chris discussed how many technology services can be delivered for growing events – the key is to ensure enough lead time as solutions which have to be delivered in a rush tend to more expensive. There is also opportunity to share some of the costs of connectivity between events that use the same locations.

In summary a fantastic day to network, meet new contacts and learn. We hope to run The Gathering again and are really excited about developing the forum and taking on the feedback from the attendees.