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Hungarian innovation in wireless payment to be adopted by Sziget festival

A Hungarian innovation is becoming the standard for organizing events where goods and services are bought and sold without any cash changing hands.

When you visit Sziget festival, one of the largest of its kind in Central Europe, just place a plastic card to a reading device and your beer will be paid for. Within the boundaries of the festival, you simply will not see any cash changing hands.

The reason is that a payment system dubbed Metapay, successfully piloted last year and this, will be adopted by the summer events organized by the Sziget cultural office. The wireless payment system is a 100% Hungarian innovation which has little to no competition worldwide.

Metapay uses a short-range radio frequency to transfer payment and balance data between the card and the reader, which is then transmitted through heavily encrypted channels to a central information hub controlling the system, explained Gábor Lévai, managing directorof the technology’s owner. Festival-goers visiting Volt, Balaton Sound or the upcoming Sziget event receive a card along with their passes upon entry, which they can top up the same way they would add credits to a pre-paid phone card. The store attendant punches in the value of the customer’s purchase, who in turn holds the card against the reader, and they’re done.

Meta pay first received publicity last year. Then too it was in relation to Sziget festivals, which were home to a pilot effort where certain sections used touch cards instead of cash. The project was successful and so far, scaling up has caused no difficulties. “At the recently concluded Volt festival, the system had to service150,000 people,” Lévai said.

White as electronic snow

Apart from its convenience (boasting a 2-4 second transaction time, it is significantly shorter than debit card payment), Metapay is also promoted as a tool for legalizing or “bleaching” commerce, as it is commonly referred to in Hungarian. Since every transaction runs through the system, everything happens on the record with precise figures on sales and how much money metaphorically changed hands.

This blends in perfectly with the global trend of making cash payments a thing of the past. Governments prefer not to burden the state budget with printing money, which is costly with all the security provisions that are needed, and often leads to redundant production. This was the case with the HUF 1 and HUF 2 coins that were in plentiful supply but usually wound up between people’s couch cushions, never to be used again. After terminating circulation of the two smallest value coins, the National Bank of Hungary also had to replace with coin alternatives the HUF 200 bills that were commonly used and therefore gave in to wear and tear more easily.

More importantly, and from a more general perspective, the greatest problem that states have with cash is that there’s no practical way to follow the money. Unsurprisingly, any payment that someone wants to keep off official records happens in cash placed in envelopes, brief cases– or Nokia boxes (as was the case in a recent Hungarian corruption scandal).

However, it is not only crooks that are unhappy with Metapay, but also employees working the beer taps, who are accustomed to getting a large part of their pay in tips. The system allows tipping, but it takes a slight additional effort. The attendant has to add the gratuity amount to the tab manually, which slows down the payment process.While employees were initially told to notify customers that they can give tips, it was met with dissatisfaction, so it is now up to the buyer. Also, it has always been good for the service industry that tips are cash-based, thus untaxed earnings that go straight into their pockets. With the digital solution, even this is recorded.

Local money

Metapay can also be considered a virtual version of local currency, like the kékfrankos that was introduced in the city of Sopron and is also on the agenda of other towns. The purpose of any such effort is to make sure that the amounts committed to the localized money get spent locally at local businesses.

Technologies like Metapay could be a tool for achieving that goal, even though Lévai does not have any world-changing plans for the time being. He considers the current exposure his company is getting from the festivals as good PR, but is still looking to develop the brand and the technology as a package meant to service specific events or venues.

Yet, he stressed that there are other applications that have not been explored and that the company is open to cooperating with other festivals, events or even the state, should demand arise.