An analysis of how society has become increasingly more cashless, and how sport has adapted to this.
According to data from UK Finance, 39.3 billion payments were made in the UK in 2018, of which only 28% were made in cash. This marked a significant drop from a decade prior. With the increasing use of online banking, smartphones, and debit cards, carrying cash can seem almost pointless nowadays. By 2028, it is expected that only 9% of payments will be made in cash, and many businesses have taken steps to begin moving toward this reality.
Research has indicated that fans are likely to spend more money digitally than when they have cash in hand. Pressing a card against a card reader is less troublesome than physically counting out cash and handing it over. Teams can maximize their profits this way, given how many thousands of people may be attending games. Paying digitally is also much quicker, saving precious time that can be used to make sales to other fans.
Online shopping and ecommerce brands will continue their significant growth, and with it, the need for digital payment options. Companies like Amazon will continue to require the services of digital payment companies, which will provide plenty of business for them going forward. As company profiles and revenues grow, this will enable greater opportunities for digital payment companies to generate more business, with one potential avenue being sport sponsorship.
Brands like PayPal and JP Morgan Chase have been successful in establishing a foothold in the sports sponsorship market, and there will be significant room to grow, given how much the digital payments industry is forecast to grow over the next decade.
- This growing need for digital payments has been highlighted by the increasing number of sponsorship agreements being signed with companies like PayPal. Other digital payment companies and startups have begun inserting themselves into the picture, including Square, a San-Francisco-based company that signed a ten-year deal with the SoFi Stadium, the home of the NFL's Los Angeles Rams and Los Angeles Chargers. As part of the agreement, Square handles all payment services at the venue, ensuring that the NFL's biggest venue is also a cashless one.
- Fiserv Forum, the home of the NBA's Milwaukee Bucks, has seen significant success in employing cashless payments at their venue since the pandemic. Surveys conducted during the pandemic gauged that fans were concerned about ordering digitally. As a response, Fiserv implemented a system involving the worker scanning a printed ticket to inform the fan that their food is ready for pickup, and when the fan arrives, to scan the ticket again to confirm that the fan has received it. Not only has this process significantly sped up the pace of transactions but has also resulted in fans spending more as a result. During the 2021 NBA Finals between the Milwaukee Bucks and Phoenix Suns, between eight to 10 percent of all food orders were made through mobile services at each game, and the mobile order totals were approximately 28% higher than cashier totals, according to Fiserv.
- As a way of taking cashless payments even further, Amazon has introduced the idea of cashier-less stores and supermarkets. In these Amazon Go stores, customers pick up the items they want and then simply walk out. Customers require the Amazon app on their smartphone, and then technology utilizing a mix of artificial intelligence, computer vision, and data from multiple sensors detects when products are taken from or returned to shelves and charges the customer accordingly. Upon leaving, the customer's Amazon account is charged, and a digital receipt is sent to the customer. The first of these stores opened in Seattle but have now expanded to 25 locations across North America, while 17 stores have been opened in London. A report from the Wall Street Journal hints at Amazon wanting to open upwards of 2,000 of these stores, but as they have only just begun opening, it will take some time for Amazon to reach their goal, even if the stores prove incredibly successful.
- Throughout 2021, there was a significant uptick in sports teams inking deals with crypto firms. The estimated valuations of these deals were enormous, given the popularity of crypto and the types of deals being signed. Among the most extraordinary were the Los Angeles Lakers signing a deal with Crypto.com for the company to be the naming rights partner for the team's arena for the next 20 years, at an estimated valuation of over $700 million. However, the collapse of the market has led to many of these deals being reconsidered, given that some crypto companies have gone bankrupt, while others are being investigated for fraud.
- This report provides breakdowns of how the nature of digital payments have evolved over the last two decades.
- It identifies the key trends that are unique to the development and growth of the digital payments sector.
- A look at how the growing usage of ecommerce platforms has necessitated the increased use of digital payments services.
- A detailed look at the digital payments value chain, and what generates value for sport amongst these younger generations.
Reasons to Buy
- For those wanting an in-depth analysis of the digital payments sector and its crossover with sport.
- Discusses how the nature of payment services has changed with technology growth, and why it's become a more convenient option for consumers.
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