Formerly known as "Low Cost," Low Festival is an annual, three-day summer music event held in Benidorm, Spain, featuring such bands as Massive Attack, Kaiser Chiefs and The Hives. It also provides multiple bars at which attendees can buy drinks or snacks throughout the program. In previous years, the festival provided customers with RFID wristbands from Intellitix that could be used instead of paper tickets as they entered through gates equipped with RFID readers. "So incorporating payments was a natural extension to that program," Nayar says (though PayPal was not involved in the previous RFID deployment).

PayPal chose to launch the system at this summer's Low Festival because the concert has a history of innovation, says Anuj Nayar, PayPal's senior director of global initiatives, and because it seeks to create a better experience for its young, tech-savvy customers.

The festival vendors reported a 20 percent increase in consumption compared with that of previous events, due to a reduction in time consumers waited to make a purchase, while the attendees themselves indicated that they preferred the RFID wristbands to traditional payment methods. Based on that experience, PayPal has moved into other venues for the cash-free system, such as resorts and cruises.

PayPal account holders who attended the Low Festival this summer were able to leave their wallets and purses at home, and instead use RFID wristbands to enter the event, as well as pay for drinks and other goods inside the park.

With the PayPal system—consisting of RFID hardware and software supplied by Belgian technology firm PlayPass—an individual first bought a ticket (in the form a wristband) online and was then directed to a webpage where that wristband's RFID tag ID could be linked to his or her PayPal account at no extra fee. The festival's management office then shipped the bracelet, which contained an embedded high-frequency (HF) 13.56 MHz RFID tag compliant with the ISO 14443 standard. The tags and readers were manufactured for PlayPass by a third-party manufacturer in China.

Before spending money, a user selected a prepaid amount for his or her PayPal account, specifically for the Low Festival, as well as a replenishment amount of €20 ($26) or €50 ($64) at a time. That replenishment was triggered automatically once the prepaid balance fell below €5 ($6.44). Only the 3,500 attendees who were enrolled as "VIP members" were allowed to link PayPal payment functionality to their wristbands. VIP members paid more for their tickets but gained exclusive access to a swimming pool and VIP bars. At the end of the event, any remaining balance in the attendee's account was forwarded automatically to his or her PayPal account, Nayar explains, "so they didn't lose any money."

Low Festival installed fixed RFID readers at all entrance gates, as well as at sales terminals within the event's seven bar areas, where a total of 38 readers had been installed. At the gates, the wristbands of 25,000 attendees were initially interrogated. Then, as users entered and exited through the gates throughout the festival, staff members employed handheld units (also supplied by PlayPass) to read the tags and ensure that they were valid for entrance on that particular day.

At the bars, festival workers used the sales terminal to input the type and quantity of products being purchased, and a user then placed his or her wristband (similar in size and appearance to a watch) against the terminal's RFID reader. The reader captured the bracelet's ID number and forwarded that information to the PlayPass software, which accessed the individual's PayPal dedicated account and deducted the purchase price.

Upon the festival's conclusion, all users were asked to complete a satisfaction survey. Of those who answered the survey, 85 percent said they preferred the PayPal RFID system to making traditional payments via cash or credit cards at festivals. PayPal has launched several other RFID solutions based on the Low Festival's success. "Looking ahead," Nayar states, "we currently have a similar system live in two super-luxury resorts on the Spanish island of Ibiza." The company is now considering installing an RFID solution for cruise lines and at soccer stadiums, he adds.