Gaming: is cash still king? The point of view of the operators

28 January 2023 - 10:36

The act of inserting a coin to play a game is a ritual in our industry, yet more and more locations are moving to a cashless system. InterGame speaks to the sector’s biggest players to see if ‘tap to pay’ has replaced ‘insert coin here’.

Written by Lee Wild, Senior Reporter InterGame
© Amelia Spink / Unsplash

© Amelia Spink / Unsplash

The world of arcades and amusements is forever intertwined with the clink of coins and tokens. For years generations of players have known that, in exchange for their currency, boundless entertainment and enjoyment awaits.

But the act of paying with cash is slowly disappearing as more and more consumers switch to other methods of payment, such as credit and debit cards or mobile wallets on their smart devices.

What was once physical, struck from metal and printed on paper, is now reduced to ones and zeros, stored on magnetic strips and memory chips in the pockets of punters the world over.

Not everywhere has been so keen to give up on dollars, pounds and yen, with many regions of the world still holding onto their purses and wallets due to long-held customs.


Nevertheless, in the 21st century it is the ubiquitous debit and credit card that reigns supreme, at least according to Renee Welsh, Ceo at Embed. She explains that far from being an optional extra, guests are now demanding that contactless and cashless solutions are available. She said: “Contactless and cashless payments are more than a trend now - they are the norm and consumers demand it.

“Embed’s mobile wallet technology uses a virtual game card, sitting in a player’s mobile device, that can be topped up any time to keep on playing. Winnings can also be redeemed at self-service kiosks with SmartTouch game card readers.”

Welsh continued: “We now see digitalisation and cashless solutions on the rise. More than just trends, they are now a consumer demand. Digitalisation also eliminates overlaps, gaps, and errors in business processes and operations.”

Strong words from Embed, and it is a feeling that Intercard concurs with. Ceo Scott Sherrod told InterGame that systems that take both cash and cashless payments have been a hit with both operators and guests. He said that Intercard’s most popular product is a payment system that accepts cash or credit cards.

“Mobile wallet has yet to become standardised but it will continue to grow. Cash or tokens have been on the way out for many years and once operators experience the benefits of cashless, they make the switch.

“Credit card use continues to grow, according to the operators we work with and the financial industry. I believe credit card will be the dominant form of payment at amusement venues within five years.”

Sherrod thinks that cash may never completely die out, but predicts that within ten years it will represent such a small percentage of payments at amusement venues that it will be a legacy method. He said: “Operators will likely continue to accept cash until the cost in time and money of handling it is no longer acceptable.”


Over at Semnox Solutions, Vinayaka Kamath, business head for the Middle East, UK and Europe, agrees that a major shift is underway. He explained: “We are seeing a major shift from cash to bank card payment in our industry after Covid. It used to be less than 30 per cent before the pandemic. The equation changed during and post Covid. We have many clients that request only a bankcard payment option in the kiosk although the unit supports both note and coin payment. As we see, there are multiple barcade, entertainment and restaurant concepts that only take digital payment, discouraging cash. The industry believes that near 100 per cent cashless operation is the future.”


Santiago Barbero, international sales manager for Cointech says that debit and credit cards are the most popular methods of payment, but that cash refuses to die. He explained: “I wouldn’t say that cash is going to die, but perhaps its use will gradually decrease, depending on regional economies.

“In informal markets such as Latin America, cash continues to have an important use.”


Over at Ideal Software Solutions, John Vallis, vice president of international business development, says that cashless payments are increasing in popularity. “While there are a range of payment methods available to consumers it is clear that the use of cards, mobile wallets and apps has become far more prevalent in the last couple of years with some retailers now only accepting card or app payments,” he said.

“Generational differences also come into play here, the younger demographic (which makes me sound very old!) will tend to use their phones and watches, using an app to pay for things, whereas I still find myself reaching for a card from my phone case most of the time. I guess its partly what you’ve grown up with and partly down to habit.

“There are numerous benefits for operators who do away with physical cash. Gone are trips to the bank to drop off physical currency and no longer is there any wastage or need for a float. A cashless system means that payments can be tracked in real time with up-to-date statistics on each sale and game.”


Despite upfront costs for an operator in terms of technology, Welsh, of Embed, says that these systems can pay for themselves very quickly. She said: “Cashless solutions can maximise operational efficiency when it comes to costs, maintenance and manpower, while eliminating hurdles to growing revenue. Hand-in-hand, digitalisation and cashless solutions allow Fecs to achieve a superior guest experience at their venues - the benefits of both are exactly what we promise to deliver through our integrated hardware and software solutions.

“What’s holding back a faster uptake of cashless solutions is usually resources. For small business operators there is a notion that digitising analogue processes such as coin-operated hardware will break the bank. As a matter of fact cashless solutions increase profitability with lower maintenance and labour costs as well as elevating the guest experience, so the system pays for itself.

“Our customer, Game Over Arcade, saw a 60 per cent revenue increase from its best years when it was open seven days a week with full staff. That’s how profitable it is now operating only four days a week with Embed’s cashless system - just three months after installation. This enabled the operators to purchase bigger, more revenue-generating games for their expansion.”


Sherrod from Intercard says that going cashless makes life easier for operators. He explained: “Going cashless eliminates the hassle and cost of accepting coins and bills, including taking them to the bank. In a tight labour market, cashless technology enables more efficient operation with less staff, such as remote game management, online booking and cashless payment.

“Cashless technology is ideal for the many Fecs that offer multiple attractions, from arcades to laser tag to bowling and food and beverage. It enables customer loyalty programmes and stimulates new kinds of marketing campaigns because the systems collect emails and other contact information. Plus, people who pay by credit card tend to spend more.

“At this point you can’t afford to turn away any form of payment, including cash at kiosks, but your overall operation will need to be cashless.”


Sebastian Mochkovsky, Ceo of Sacoa Usa, believes that a cashless system makes the overall experience better for the operator, allowing them flexibility on offers and pricing. He said: “It can increase sales by an average of over 30 per cent and decreases employee theft, while guest experiences are more easily administered.

“Parties and events can be given time cards, which can be limited to specific games and are able to prohibit the winning of tickets.”

He continued by saying that operators may think the technology is too expensive, but in reality the savings means it pays for itself quickly: “What typically holds back operators from making the switch to a cashless system is the false belief that it would be too expensive. If only these individuals understood how large their Roi would be (and how quickly it would display itself), as well as how much added control and security they would get, surely they would have no doubts about making the switch yesterday.”


Kamath, from Semnox, adds that there are numerous benefits for operators who opt for a cashless system. He said: “Cashless operation gives a powerful tool to the operators to run the business. Once cashless is implemented, benefits are immense and it opens up a whole new possibility for further business expansions and organised way of operations.

“There is no pilferage; every penny is accounted for. Owners get real-time accurate reports related to sales, usage and stock. It saves time not having to physically count tokens, stock and tickets. That time can be invested in business development instead.

“There is lower maintenance. There is no need to upgrade coin acceptors, no need to maintain ticket dispensers and no mechanical errors.

“Systems give a whole new level of data related to customer visit behaviour, spend behaviour, machine performance and play preferences. Operators can make data driven business decisions to target customers. This isn’t possible with coin operation.

“There are increased revenue generating channels. Operators can opt for self-service kiosks, online sales, mobile apps and many more. It enhances the customer experience with offers, discounts, memberships and loyalty plans.”


Meanwhile Barbero, of Cointech, says that the main benefits of a cashless system for operators are “labour reduction, timely information and an effective technical support.”

It is not just for operators that a cashless system brings benefits - guests are welcoming the move from coins to cards as well.


Writing for the Federal Reserve Bank of San Francisco, Emily Cubides and Shaun O’Brien, say that in the Us, payments in cash dropped sharply between 2019 and 2020 due to the pandemic, before rebounding slightly in 2021. They found that in October 2021 the average number of daily cash payments increased from six to seven and accounted for 20 per cent of all payments, up from 19 per cent in 2020, but down from 26 per cent in 2019. While these numbers are not specific to the amusement industry, it shows an overall trend to cashless payments.


Welsh, of Embed, argues that mobile wallets mean there are less physical distractions at an Fec than ever before, increasing enjoyment. She said: “They don’t have to be weighed down by their winnings thanks to hardware solutions like self-service kiosks and SmartTouch game card readers. Everything is digitised now for a free and easy consumer experience.

“Digitalisation eliminates overlaps, gaps, and errors in business processes and operations. Cashless solutions prove to be maximisers of operational efficiency when it comes to costs, maintenance and manpower, and eliminates hurdles to growing revenue. Hand in hand, digitalisation and cashless solutions allow Fecs to achieve a superior guest experience at their venues.”


Kamath at Semnox, however, believes that a system that still accepts both cash and cashless payments is preferred by Fecs in some locations. He said: “Some worry about missing out on the loose change from customers’ pockets, especially at beachside and tourist locations. To enable such operators who are still in a dilemma, our system offers both cash and card mode of operation.

“The operators can slowly learn the system, promote the benefits of cashless system to end users and switch to full cashless when they feel comfortable. This ability has given major confidence to most of the operators to invest in the system and do a measured switchover to complete cashless and ticketless operation.”


Over at Ideal, Vallis says that a closed-loop system has many benefits for guests. He explained: “From a guest’s perspective, the ability to have a single wallet solution which can be used in all aspects of an FEC including arcade games, food and beverage and attractions etc. means that they can simply load up their card or wristband and go and have fun without the need to keep reaching into their pockets or an Atm to take cash to pay for these things.

“Similar could be said for using a regular credit or debit card to pay for those same things, but if you are a family with smaller children, you are unlikely to give them your card or phone and let them spend as they like, plus there is always the risk that the child loses the card or someone steals it from them. On the same token you are not going to want to spend hours on end effectively ‘coining up’ games either.”


Mochkovsky, of Sacoa Usa, takes a different view. He says that many guests may value to anonymity that cash brings in an increasingly tracked world. He said: “Many guests prefer to stay anonymous with their purchases, and not accepting cash would not allow for this, thereby shutting down a relatively large amount of guests.”

With an eye towards the future, Vallis from Ideal says that the industry needs to unite to create a standard protocol that all game manufacturers could adhere to. He said: “I think that there is a lot that could potentially be done in the future to make cashless integrations not only easier but to add more value too.

“Currently cashless systems effectively work by sending a pulse down a coin line to simulate the effect of a coin passing through a slot to activate the game, either directly or through a credit interface board, and when it comes to paying out electronic tickets, we count the ticket pulses back out, display them and add them to the guest’s account.

“It would require the entire industry, including games manufacturers, trade associations, operators and cashless system providers, to all work together to create a standard cashless protocol which the game manufacturers would then need to implement and work, to interface with the systems providers.

“A standard protocol for cashless could potentially open up a world of possibilities in the future. In such a fiercely competitive landscape, however, I am not sure that this will be possible, but you never know what the future may hold.”


Meanwhile over at Sacoa Usa, Mochkovsky says that the future lies in guests paying using only their face. He explained: “We believe that the future will allow for guests to pay using their face through the use of facial recognition software, just like how some people nowadays use QR codes to pay. In fact, some stores have begun to implement technology that allows guests to pay with their palms.”


At Semnox, Kamath said that the future of the cashless space is self-service, reducing staffing costs for operators. He believes “it will be self-service operation that will take over manual staff-based operation.

“This is where self-service kiosk, mobile app and ecommerce websites will come into picture.

“Usage of artificial intelligence will prevail as the industry evolves. It is important that the customer gets a seamless experience as industry evolves with all new concepts.

“We, as a solution provider, have always been ahead of the game, having a comprehensive solution that can manage various aspects of operation including booking, capacity management, F&B, ecommerce sales, reservation, mobile app, digital signage, email/WhatsApp campaigns and much more. Our aim has been to be the single compressive system that can manage small operations like kids’ play areas to larger Fec chains to outdoor amusement parks.”


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