RFID Cashless Payments have never been more popular, and you are curious about implementing an RFID Platform on your next event.
The next question is always “What is the cost and is it justified?”.
In this article we explain how to perform a cost-analysis that can help you understand the real cost and potential benefits of an RFID Platform implementation.
Consider the total cost, and don’t ignore the price of doing nothing
The first thing to remember is that “how much will it cost?” shouldn’t be the first question. Instead, think of it in terms of “Return Over Investment” – Or to put it simply – ” How many euros will you get back for each euro you put in”.
So if we want to get a full picture, you need to consider not only the costs of the platform and what you will pay upfront, but also the additional revenue you will be generating, and what it would cost you to simply “do nothing”.
The “cost of doing nothing”
There are significant costs to not using an RFID Platform and using instead cash and relying mainly on cash payments. A true cost-benefit analysis must take these into consideration, in addition to the direct and indirect revenue and savings generated by the RFID Platform.
Regardless, we need to start from somewhere and the initial price tag is a good place to begin – so let’s jump to it.
Direct cost factors to consider
The first and most common misconception is that an RFID Platform has a “sticker price” and that a quote or price can be given as a single number. The reality is that the cost is virtually impossible to estimate unless we understand the particular circumstances and goals of your event. This is the reason why you will not find actual pricing details on any vendor website, – including our own website – And if you do find some pricing indication you will the details provided to be quite limited, same as the supplier’s understanding of your event is limited.
There are several factors that will typically play a part in the quote you’ll receive, and those typically are:
- What types of RFID solutions do you need?
Access control is usually simpler to implement than cashless payments, and the later are easier to implement than social activations; each of these will affect your final quote.
- Number of attendees
RFID Platforms are typically priced on a per-attendee basis. Usually, the more attendees at your event, the less you can expect to pay for a single attendee
This includes the RFID accessories given to attendees – such as wristbands, badges or lanyards – as well as the devices used to read them and operate the platform.The cost of RFID wristbands usually depends on the amount that you need, and of course the quality. Wristbands start from about €0.30 each, and RFID readers can be loaned to you as part of your quote or at an agreed rate, saving you from purchasing your own equipment.
Any solid RFID system will include an event management platform that where you can run reports, track attendance, check vendor transactions and topups, etc. The quote you will receive includes the license to use this platform.
- On-site Support and Other Services
Will you need the RFID provider to have a team ‘on-site’ at your event, in addition to your own staff? Or remote support (via phone / chat) will be enough?
These factors many times play a significant role in the total cost of the solution.
To summarize, the costs of implementing an RFID Platform will always take in consideration the above-explained factors, but the final number can vary significantly based on other factors – including the size of your event, the level of difficulty in implementation (e.g. a festival held in a remote location), as well as shipping and travel costs.
At the beginning of this article, we mentioned that understanding the “sticker price” should only be the first step in your cost analysis – and should be counted against the indirect ‘costs of doing nothing’, and the direct benefits that RFID can generate. Let’s drill into what these two things are.
Indirect costs of running a “cash & credit card ONLY” event.
The initial assumption is that not implementing an RFID platform is the cheaper option, since you will not be paying for the costs mentioned above. However, the reality is that relying heavily on cash payments brings its owns costs and risks, like:
- Lost and stolen cash: when your vendors handle large amounts of cash money, discrepancies are inevitable. Studies estimate that the lost revenue due to theft and mishandling of money typically ranges between 3%-15% of total event revenue.
- Wi-fi costs: accepting credit card payments in remote or large-scale events will often require you to invest in a wi-fi connection for the event – which cost could easily be in the tens of thousands of euros, and still, on large-scale events, the constant connectivity is not guaranteed. RFID help you mitigate these costs by removing the need to purchase temporary internet for the whole site.
- Staffing: RFID access control streamlines the admission flow and makes it faster and more secure to validate tickets. This in turn means you could hire fewer people to manage the gates while also reducing fraudulent entrances. Reducing the amount of people managing the gates can easily save you thousands of euros.
When we start paying attention to the indirect costs above, its easy to realize that the cost of not implementing an RFID Platform are far from insignificant – and can easily amount to anywhere between €10-100K, depending on the size of your event.
Revenue Benefits of implementing an RFID Platform
Now that we understand some of the potential costs for both alternatives, we need to take into consideration the ‘returns’ which in this case are the benefits that an RFID Platform will bring. It goes without saying, that these ‘returns’ will also vary based on the event specifics and how successful the implementation is, but they would typically include:
- Increased spend per customer: When attendees can purchase food, drinks and merchandise with a simple wristband tap – rather than raffling through their pockets for change, or waiting for credit card machines to finish processing – customers have a natural inclination to spend more. Studies estimate an increased spending of 15-30% more per person on events that implemented an RFID Platform.
- Higher sponsorship opportunities: Let’s face it. RFID events are a novelty and sponsors will jump at the opportunity to be part of it. An RFID platform will provide you with precise data collection and will empower you to create branded activations, this factors can help you gain better sponsorship deals at your events. While this is difficult to quantify, it could be anywhere between 5-50% more than what you would receive for a sponsorship on a non-rfid event, this depending on a few factors like the data you can produce and your own negotiation skills.
- Improved attendee experience: Another factor difficult to quantify, but extremely valuable nonetheless, is the fact that attendees have more fun when you use RFID: They wait less in line, they enjoy better security, and they don’t need to carry cash on them during the event. For you, this translates in great direct and indirect benefits, from increased ticket sales at your next events to better online reviews.
- Additional revenue-generation channels: Depending on your setup, you can charge activation or refund/operational fees to your attendees, this allows you to pass a significant part of the cost of an RFID Platform directly to the attendees. When you Take this powerful revenue-generating channels into account, it’s easy to see how RFID can help you offset or cover and even surpass its direct costs.
Conclusion: It’s all about that ROI
While it’s difficult to create a formula that will apply to all circumstances, we hope you have a better understanding now of what you can expect to pay for an RFID Platform, and how to calculate the potential benefits and the costs of the alternatives – like doing nothing, relying on cash, or investing on temporary or low quality platforms.
Considering all the options, direct and indirect costs and benefits will help you fully comprehend the pros and cons, and have more thoughtful discussions with RFID providers.
If you want to learn how we apply these principles at your next event, request a quote and let us show you what Tixify can do for your event.