Three leading Hungarian fintech companies, Cellum, Cardnet and Festipay are working with MasterCard on an exciting project that could be as revolutionary within the payment market as smartphones in mobile telephony.

During these unusual times, the widespread acceptance of contactless payment options is particularly important and is becoming actively encouraged. Bank coins and notes passing through many hands can easily become an innocent yet uncontrolled carrier of viruses and bacteria. Pin entry pads such as those found on ATMs or POS terminals can also inadvertently retain bacteria and viruses, again providing a potential transmission source.

“It is quite certain that no general conclusion can be drawn from an individual’s payment experience collected during a global pandemic.”

– says Endre Eölyüs, Mastercard’s Director for Hungary and Slovenia.

Since the invention of money, physical cash has always been king. The pandemic situation will certainly alter how most of the world pays for goods. For example, concerns about infection risks in public places such as supermarkets change consumer behaviour. Rather than several store visits with smaller transactions through the week, consumers now order a month’s supply of groceries to be delivered to their door. This has changed the nature of payment, away from physical cash to Internet based transactions, and in store using contactless technologies. Fortunately the burgeoning fintech industry has a myriad of technical innovations and assets to enable this shift in consumer behaviour.

Gergely Brückner interviewed the CEO of Cellum, János Kóka.

“Cash is bad for the society”

– says János Kóka, the president of Cellum. Cash is bad for societyfor many reasons. Its expensive to produce and difficult to transport and store. Plus, financial crime such as corruption and tax evasion would be difficult without cash. Finally, for health reasons, as it could spread infections before and after the current pandemic.

Although relatively unused within Hungary, smartphone payment services may soon be available. Cellum’s major marketplace, Indonesia has utilized smartphone-based payment services for some time. As Mr Kóka recalls;

“Most smartphones can used as a credit card for payment, or a credit card terminal for receiving payment”

Although credit or debit card use is relatively low in Indonesia, a high percentage of the population have access to a smartphone. Therefore, by enabling widespread access to payment apps and e-wallets, a consumer’s smartphone suddenly becomes a credit or debit card. From the e-wallet, money can be easily topped up onto a single-use credit card generated by the app and allows payment with a contactless terminal.

New payment options: the phone as a POS terminal

Cellum in conjunction with MasterCard and Festipay will soon launch a ground-breaking payment service in Hungary, allowing a smartphone to become a POS terminal. This enables a myriad of low-cost payment possibilities, and again only requires a smartphone with 4G connectivity.

The detailed testing of the new smartphone-based POS terminal is designed to exceed current fraud detection requirements. In Hungary and other countries, there could be many users and small businesses whose card transaction volume is too low to be accepted by banks. Additionally, leasing a traditional POS terminal could be too expensive. The forthcoming smartphone POS terminal will provide a low-cost method for small business to accept card-based payments, and therefore increase sales even during these turbulent times.

Proponents of digital payments say it is irrelevant how we pay, be it with instant transfer, card, mobile, e-wallet, or some trendy app. Everything, that is not cash has its benefits. However, during the pandemic contactless payments are the most relevant in this new era of payment options.

(Source: Index.hu)

The decade ahead is one anticipated to be swept with technological disruption, as we are digitising every aspect of our day-to-day lives. The way we pay for things makes no exception. GlobalData, a leading data and analytics company has forecast which countries will most likely be the leaders in moving towards a truly cashless society.

Cashless societies on the rise

Vlad Totia, Payments Analyst at GlobalData, explains: “E-commerce accounted for $3.5 trillion of worldwide sales in 2019. While smartphones are becoming ubiquitous even in the most underdeveloped countries. Banks are slowly closing down their brick-and-mortar branches in favor of going fully digital, and people in general are tired of waiting for days on end for international transactions to execute.

“All of these developments point towards one question: what is the point of cash anymore? While it can still have its uses, especially between banks, physical money costs a lot to store, transfer and produce. Most coins produced are less valuable than the material used to make them.”

As the world is moving towards this exciting future, cashless societies, GlobalData predicts which countries have the potential to be the cashless leaders of the decade ahead.

Finland

“Finland is, as of right now, the country most ready for the impending transition to a cashless society. It ranks second to Ireland in terms of frequency of use of cards, fifth in e-commerce spending as a percentage of gross domestic product (GDP), third in internet banking penetration and second in smartphone penetration for the 2022 forecast.

“As a country with a population of only 5.5 million, cash in Finland is increasingly irrelevant in both rural and urban areas. Although it is not taking as aggressive measures as Sweden in moving towards a fully digital economy, Finland does seem to be more cashless-ready at the moment.”

Sweden

According to GlobalData, if there is any country with the potential to jump to first place within a couple of years and become a truly cashless society, it is Sweden. About 80 per cent of Swedes use a card to pay for purchases. Digital payments via card or apps are so widely accepted that many Swedes no longer carry cash. Even children pay with debit cards. Bengt Nilervall ot the Swedish Trade Federation explains why:

‘In terms of the cashless society, I think Sweden is ahead compared with other countries because in Sweden there is – in general – a trust in the government, the system, the banks and the authorities.’

Over the last few years, thousands of Swedes have had a biometric microchip implanted into their hands so they do not have to carry keycards, IDs or even train tickets…

China

In global terms, China is behind Sweden, which aims to go completely cashless as early as 2023. However, the growth in non-cash payments in China is much more significant, given its population size.

“One area where it has seen extreme developments is the rapid adoption of mobile payments. One of the most popular ways to pay by phone is QR code scanning. This method has been successfully adopted by mainstream society. One proof that China is rapidly moving towards a cashless society is its undisputed leading position in e-commerce. As of 2019, China recorded an estimated 80 billion cash transactions.”

China is already the world’s largest mobile payment market and is also a leader in peer-to-peer payments, in which people are able to pay each other by text.

South Korea

South Koreans are increasingly going cashless as more people rely on credit cards and digital payment tools. (According to a survey by the Bank of Korea (BOK). “Even more so than China, South Korea is arguably the cashless champion of Asia. Although the Chinese adoption of cashless alternatives is much faster, South Korea already has most of the infrastructure in place nationwide. With roughly 6% of the country’s GDP being e-commerce spending and more than 100 transactions on average per card every year, South Korea is well on its way to remaining a top-three cashless country by 2022.

“More than half of the country’s 1,600 bank branches no longer accept cash deposits or withdrawals and a significant number of government institutions have gone fully cashless.”

United Kingdom

“The UK, and specifically London, has really geared up its tech scene, and the digitization of money has not been left behind. Arguably the global capital for online banking, the UK is leading the charge in many fintech innovation areas. Mobile payments are not something new in the country, with more and more small merchants accepting card and mobile payments.

“The UK ranks number two globally for e-commerce as a percentage of GDP, being second only to China. The British have become very comfortable with taking out their phone or card to pay for even the most mundane daily purchases. At this rate, the UK should transition at the very least to a predominantly cashless society by the mid-2020s.”

Australia

“Australia sits in seventh place in terms of cashless society readiness and it is seriously gearing up to digitize most of its economy. By 2022, the vast majority of the population should have at least one smartphone. Internet banking penetration is forecast to reach almost 70% of Australians. Australian Payments Network chief executive officer Dr Leila Fourie said we have seen a rapid increase in the last five years in digital non-cash transaction mechanisms. “The use of debit cards has increased 87 per cent over the last five years and online banking transactions have increased 43 per cent. Whereas ATM and cheque usage have decreased 25 and 60 per cent respectively,” Dr Fourie said.

State scheme introduced to encourage cashless payments in Japan

Under the initiative, consumers are collecting reward points when using cashless payments in Japan. Therefore customers earn 2% or 5% of their purchases that are not in cash, including credit card payments, at points of purchase. The government has begun to provide stores with support for installing cashless payment systems.

So the International Monetary Fund (IMF) suggested the end of last month that the country should consider extending the initiative until the end of June, 2020.

According to the IMF, extending the point reward program would help to take advantage of the impact of two percentage points in sales tax”, which sets the retail record from 8% to 10% in October. 

Therefore after this success, the Japanese government launched a nine-month reward point program aimed at smaller retailers.  As of its launch, the program was available in approximately half a million stores throughout the country. So the program became an instant hit at convenience stores. The top four chains offered instant 2% price discounts instead of reward points. The rewards program can provide a breakthrough in the transformation of Japan.

Doubling cashless payments by 2025

The government of Japan faces challenges that include reluctance among its aging population to use digital money. This is a reality that is out of place with its international reputation as a tech-savvy nation. Unlike other Asian countries such as South Korea, the adoption of mobile payment platforms and digital money services remains relatively low in Japan. Nevertheless, Japan pales in comparison with other countries. 96% of transactions in South Korea and 66% in China are cashless. Last month, a Reuters report described the Japanese as “the most dedicated cash hoarders in the world.” In other words, according to the Reuters- article, “Cash is king in Japan, and more so for the country’s fast-ageing population who are still deeply reluctant to give it up.”

In conclusion, Japanese government wants to double the ratio of cashless settlements to 40% by 2025 and to 80% eventually to spur labour productivity.

Festipay has provided #cashlesspayment solutions at The Carnival, Europe’s biggest street food event located in Bucharest, Romania since the beginning. We were there this year again between 6-8 September!

It’s not a festival, it’s a Carnival

The biggest street food event in Europe with many exciting activities, concerts, sports, games and of course delicious food and drinks. Spice it with electrifying concerts, street art and themed spots and you will get a glimpse of how we started as a foodie festival and turned out to be Europe’s biggest street food manifestation. Bucharest Street Food Carnival!

The Carnival story

The story began in 2016 with a first September edition in Bucharest, at Romexpo. With over 60 food vendors, 10 international cuisines, 4 days of concerts with local and international artists and a magnificent audience of tens of thousands of people hungry for the new foodie festival proposal we launched in Romania. The first attempt to place Bucharest among Europe’s top cities was quite simple: eat, sing, repeat.

Divided sectors by food theme

There are divided sectors by food theme (Burger Arena, Piazza Italia, Young on the Street, Food Truck Avenue, Street Food Boulevard, BBQ Corner, Desserts Island, Fish Market, Gourmet Square). Also there are designated leisure and entertainment spots.

All that in the course of 4 days, with 3 stages and over 20 bands and performing artists from Romania and abroad. Thus in early September 2017 The Carnival managed to exceed all expectations. A record crowd of over 106k visitors attended, placing the festival as 1st in Bucharest and 4th country wide. Also, by managing to gather over 100 vendors, our festival went up the Eastern Europe street food charts, hitting no less than top position!

Unique and grand

The recipe had proved itself to be unique and grand both in numbers and happenings. The organisers of The Carnival place quality above quantity. They target people of all ages that share an appetite for the different, cool, exceptional, diverse yet affordable and original. Success was our capacity to add value to the urban scene.

The 3rd edition

The 2018 edition was far too big and rich to be just yet another festival, it became Bucharest Street Food Carnival. With a huge stage that featured live cooking sessions and chef talks.  Assembled 14 chefs, out of which two were international Michelin Star Chefs.

The Carnival became the European Capital of Street Food for yet another magnificent four days in Bucharest.

In September 2018, the biggest street food arena in Europe included, amongst others, the famous Orlando Circus. Also street art exhibitions, dinner in the Sky, an incredible line-up of national and international featured artists.

2019, the 4th year, The Carnival and Festipay happily together

Echowaves is an Electronic Music Festival, which was launched in August 2018 at the Black Sea coast – resort Anaklia. The area is distinguished by its unique climate, impressive views, and the beautiful coastline. Echowaves is powered by Exit which holds the title of Europe’s bests festival of 2014. Cashless payment is being managed by Festipay and ticketing by Live IT.

Successful start last year

The Echowaves Festival took a successful start last year and hosted up to 150 artists and more than 10,000 guests from 70 countries. Festipay is providing the cashless payment, while the UK based Live IT is responsible for ticketing.

Positive appraisals in the region

It soon became known for its scale and positive appraisals in the region and in the European countries, and was shortlisted for the Best New Festival nomination in 2018. Echowaves came to the attention of international media and introduced Georgia to more than 27,000,000 foreigners.
Echowaves is an electronic music festival that invites you to experience the beautiful seaside resort of Anaklia Georgia. It lies in the shadow of the most stunning mountains and which will create unforgettable summer memories.
This festival brings quality electronic music and offers beautiful sunsets, long beaches, and a warm Black sea to swim in. It’s a very special location for a music festival. It boosts next level production, impressive stages, day and night parties, and stunning natural backdrops, sunsets and sunrises. Throughout the day visitors can enjoy playing sports, attending workshops and have fun with many different activities during the 4 days.

Echowaves 2019 August 22-25, Anaklia

For the Festival’s second year, enormous resources had been directed toward its development and innovative offerings. In addition to good music, the festival offered sports, physical activities, and various theatrical, cultural, social and educational events. Cashless by Festipay, this year again.
Visitors to Anaklia find renovated stages, increased number of scenes, bars and catering facilities, diverse music, impressive lineup and lots of novelties.

Cashless by Festipay

Cashless is managed by Festipay this year again. Visitors can charge their wristband at registration center and on the festival field (with cash and with credit card). It is possible withdraw your money if you decide to leave the festival territory or you are on festival only for 1 day.

Last option to refund your money from the wristband is until August 26, 18:00. You will get money back from 2 different festival locations, as well as registration center. Amount less than 5 GEL is not refundable. If you miss it, later you are not able to refund the money, it is only possible on site.

Here at Festipay the festival season is well and truly underway. As well as delivering or world class event solutions, Festipay is embracing Plastic Free July. For the integrated entry and cashless payment, we use R-PET wristbands for major festivals in Romania. NEVERSEA, on the beach beside the Black Sea, was the first festival, where Festipay provided integrated event management,  to utilise the R-PET wristbands made from recycled plastic. This was particularly poignant given the devastating influx of plastic waste to our oceans. Following Neversea, Festipay will be issuing the R-PET wristbands at the UNTOLD Festival. This means that 500,000 festival goers in July will have embraced Festipay’s commitment to recycling. In turn, they played their own part in helping to support the environment.

Increasing our green footprint

With new ways of recycling, and a sustained effort to help the environment, Festipay continues to invest in new uses for recycled materials.  Not only by using wristbands made of recycled plastic, but also adapting its current business practices and processes to increase its green footprint and enable the festivals it supports to achieve their environmental targets.

Join millions of people reducing their plastic waste

Plastic Free July is a global movement that helps millions of people be part of the solution to plastic pollution. So we can have cleaner streets, oceans, and beautiful communities. You can take the challenge here. Together we can make a difference and be a part of the solution.