Sentinel reports that MyMagic+ executive vice president Nick Franklin will be leaving in July

[COProgressFan]

Exactly. Thank you.

But it won't be just for resort guests, it will be for every visitor. It won't be a necessity, but guests will be strongly encouraged through incentives (small discounts, free Magic "Bandit" or extra FastPasses) to link their MBs to their credit cards or bank accounts.

It's coming my friends. Very, very soon.

Well, without giving free Magic bands to non-resort guests, why would anyone want to do so? Would the promise of a tiny discount by linking a credit card really make me shell out $12.95 for each guest in my party to buy a Magic Band?

Then there's this:

The plans to add credit cards to MagicBands got scrapped. Annual Passholders were supposed to have that feature. The financial institutions that Disney approached overwhelmingly said no thank you.

It may be in Disney's interest to have guests charge everything on a band, but its certainly not in the credit card companies' interest.

 

[BigTxEars]

You would be surprised. Disassociating cash from the purchase does help to drive more sales. This is the same reason why casinos use chips instead of cash. People tend to buy more on credit, either thinking they will just pay it off later, or that it's no big deal.

And WDW actually does a great job of driving down charges. This is one of the reasons why they would love everyone to pay via magic band. There are typically 2 fees associated with a CC transaction. I believe they are called the interchange fee and the transaction fee. The interchange fee is a set charge per transaction just to run the card. The transaction fee is a percentage of the total transaction when it gets approved. Figure something like $.05-.10 plus 1-3%. This is why lots of places try to discourage you from charging a pack of gum as the fees eat up their entire profit. But since WDW can tack all the transactions together and run them at once, they save a fortune on fees. They have been doing this for ages with room charges, and if they can extend it to non resort guests with the magic bands, it's more profit. Figure 5-10 swipes a day at a nickle a swipe, adds up really fast.

I sadly know the business end cost, $25,835 in the last three months at mine in credit card fees as you said.

Who knows if credit was not an option if those sales would have occurred or not. I would guess some would some would not.

Not sure if you have ever been to a gun show but those dealers always post the gun price as cash and the sign would say add 4% for credit card. I guess that's one way around it.

Either way cash nor credit ate going anywhere anytime soon. What would be nice is if linking the MB, phone app and the ability to preload the MB with X dollars and the system sends an alert to the guest daily to monitor balance remaining during the week. That would help budgeting as well, plus who's going to leave $ on their MB when they leave WDW? Everybody wins

 

[Soarin' Over Pgh]

I prefer to buy disney gift cards and rack up fuel perks at my local gas station. Money is set aside for disney, and cents off every gallon of gas help as well.

I don't think I used my debit card once when I was at wdw. Cash at the bars, but I think that's it.

 

[Ignohippo]

The plans to add credit cards to MagicBands got scrapped. Annual Passholders were supposed to have that feature. The financial institutions that Disney approached overwhelmingly said no thank you.

I'm not sure where you heard that information, but that is not at all what I understand.

First, it would be up to the business, not the credit card company.
Second, it's no different than syncing your credit card info to your hotel room key.
Third, what credit card company would say "no, don't link your new tech to our card. We'd much rather people use cash or other methods to pay"?

 

[Ignohippo]

Well, without giving free Magic bands to non-resort guests, why would anyone want to do so? Would the promise of a tiny discount by linking a credit card really make me shell out $12.95 for each guest in my party to buy a Magic Band?

As I understand it, the Magic Band would be given in place of admission tickets. The cost of the Magic Band is minimal (especially with as many as Disney is producing).

 

[Ignohippo]

You would be surprised. Disassociating cash from the purchase does help to drive more sales. This is the same reason why casinos use chips instead of cash. People tend to buy more on credit, either thinking they will just pay it off later, or that it's no big deal.

And WDW actually does a great job of driving down charges. This is one of the reasons why they would love everyone to pay via magic band. There are typically 2 fees associated with a CC transaction. I believe they are called the interchange fee and the transaction fee. The interchange fee is a set charge per transaction just to run the card. The transaction fee is a percentage of the total transaction when it gets approved. Figure something like $.05-.10 plus 1-3%. This is why lots of places try to discourage you from charging a pack of gum as the fees eat up their entire profit. But since WDW can tack all the transactions together and run them at once, they save a fortune on fees. They have been doing this for ages with room charges, and if they can extend it to non resort guests with the magic bands, it's more profit. Figure 5-10 swipes a day at a nickle a swipe, adds up really fast.

Very well said.

And it doesn't take very many swipes (per guest, per day) to make an enormous, enormous amount of money. Like I said earlier, if each guest just spends 5% more each day, that's hundreds of millions of dollars in profits every year without the Mouse having to do a single thing.

 

[Jeffxz]

I'm not sure where you heard that information, but that is not at all what I understand.

First, it would be up to the business, not the credit card company.
Second, it's no different than syncing your credit card info to your hotel room key.
Third, what credit card company would say "no, don't link your new tech to our card. We'd much rather people use cash or other methods to pay"?

If this was scrapped, I'd assume it has to do with risk management. Disney could probably do this without the blessing of the Credit Card providers, but there is a higher risk with non hotel guests.

With off-site guests or APs you run the higher risk of someone assigning a card to the band and then deactivating the card (not necessarily with the intent to defraud Disney, but cards get canceled for all kinds of reasons). Then the guest could use the magicband all day to purchase goods and Disney would not be aware of the invalid charges until they tried to run the charges that night. It would be much harder to track down these guests to resolve the issue.

With hotel guests you can verify that the card is valid and pre-auth a charge when a guest checks in, you can also charge all expenses to this card everyday, and also have a reasonable expectation to be able to resolve any issues with a guest staying at your hotel. The card is only valid for charging during the stay so worrying about canceled or expired cards wouldn't be a very big problem.

My guess is that Disney decided that the projected increased revenue isn't worth the extra risk of trying to make the system work in this way.

 

[seascape]

As I understand it, the Magic Band would be given in place of admission tickets. The cost of the Magic Band is minimal (especially with as many as Disney is producing).

What is the manufacturing costs of the magic bands to Disney. I have heard many people are buying extra ones to match their outfits. If the cost for a band is only a dollar or two and they sell them for 12.95 that would be about 10.00 profit per band. Sell a few million a year and we're talking some real profits in them. Also the savings from all those pesky small charges at least food and wine and flower and garden and the combined savings and profits directly from the band's could be near 100 million a year. Not bad for direct profits without even taking into account the increased spending and attendance.

 

[GymLeaderPhil]

I'm not sure where you heard that information, but that is not at all what I understand.

First, it would be up to the business, not the credit card company.
Second, it's no different than syncing your credit card info to your hotel room key.
Third, what credit card company would say "no, don't link your new tech to our card. We'd much rather people use cash or other methods to pay"?

Actually, Guests who stay at a Disney Resort have the option at check in to add room charging privileges to their media. Disney requires a credit card on file to post the activity to and there is a limit depending upon what level of resort they are staying at. In essence, Disney is extending a line of credit in good faith that by check out day or if they hit the limit that the Guest will be able to take care of all the room charges they've piled up.

Disney didn't want that risk associated with placing a Credit Card onto a MagicBand. They wanted the blessing of those financial institutions to have the Guest link it themselves (which is already a struggle as it is with tickets) and be able to utilize it with a four digit pin. The United States is woefully antiquated when it comes to forms of payment (personal or travelers checks/cheques being a great example) compared with other countries who have the ability to utilize their cell phone, near field RF chips, and other processes to make payments. The United States have been slow to adapt to these methods because of the liability of fraud associated.

Another issue is that MagicBands do not have anything printed on them like a credit card does. No identifying card issuer like Visa. No name of the cardholder. No expiration date. There is no way to verify that the person who is using a credit card on a MagicBand is the actual person outside of the four digit pin. Credit Card companies in the United States require that their merchants verify the signature that is used when making the purchase matches the one on the back of the card or they request photo identification if it is unsigned or does not match. Online merchants have to capture even more information to verify ownership.

 

[BigTxEars]

Actually, Guests who stay at a Disney Resort have the option at check in to add room charging privileges to their media. Disney requires a credit card on file to post the activity to and there is a limit depending upon what level of resort they are staying at. In essence, Disney is extending a line of credit in good faith that by check out day or if they hit the limit that the Guest will be able to take care of all the room charges they've piled up.

Disney didn't want that risk associated with placing a Credit Card onto a MagicBand. They wanted the blessing of those financial institutions to have the Guest link it themselves (which is already a struggle as it is with tickets) and be able to utilize it with a four digit pin. The United States is woefully antiquated when it comes to forms of payment (personal or travelers checks/cheques being a great example) compared with other countries who have the ability to utilize their cell phone, near field RF chips, and other processes to make payments. The United States have been slow to adapt to these methods because of the liability of fraud associated.

Another issue is that MagicBands do not have anything printed on them like a credit card does. No identifying card issuer like Visa. No name of the cardholder. No expiration date. There is no way to verify that the person who is using a credit card on a MagicBand is the actual person outside of the four digit pin. Credit Card companies in the United States require that their merchants verify the signature that is used when making the purchase matches the one on the back of the card or they request photo identification if it is unsigned or does not match. Online merchants have to capture even more information to verify ownership.

When we linked our MB to my credit card we choose a PIN number to go along with it. So in theory the MB is al we would need in the parks. NO cash, no cards nada....now we will be taking cash anyways. I linked my Disney Visa to it, not sure if the 10% will occur with just the band or if I will need the Disney Visa in hand. Either way I never go anywhere with out my wallet so no big deal.

 

[BigTxEars]

Very well said.

And it doesn't take very many swipes (per guest, per day) to make an enormous, enormous amount of money. Like I said earlier, if each guest just spends 5% more each day, that's hundreds of millions of dollars in profits every year without the Mouse having to do a single thing.

I think WDW is great example of this, lots of very small purchases (food, drinks small toys etc) as well as large purchases (tickets, rooms etc) so I can see lots of credit card use and lots of cash by the same guest. Who knows the balance of the two resort wide.

The balance of profit vs cost is what I find interesting, like your example above. If sales are up 5% due to wider credit card usage what is the increase in credit card fees for the park? Smaller merchants seem to pay around 4% for credit card fees, I would imagine Disney can leverage that to the 2% range per transaction. I don't know what they have work out with Chase for the Disney Visa but I would imagine it's a pretty sweet deal. Lord know what they pay for some of their overseas guest credit usage.

American Express about 6 years ago got into a huge war with Wal-Mart over their fees. Wal-Mart wanted a better deal AE said no and issues arose with WM not taking their cards for a time. Now WM caries a number of items from AE like Bluebird and a newer service exculsively. I guess they got back into bed together.

I think debit cards are still the future, a combo of the ease of cash and credit cards combined. Lower cost for the business and no interest for the customer. Seems like a great balance to me.

 

[flynnibus]

When we linked our MB to my credit card we choose a PIN number to go along with it. So in theory the MB is al we would need in the parks. NO cash, no cards nada....now we will be taking cash anyways. I linked my Disney Visa to it, not sure if the 10% will occur with just the band or if I will need the Disney Visa in hand. Either way I never go anywhere with out my wallet so no big deal.

No, you linked your MB to your room account.. which you authorized to be charged to your credit card when you handed them your card, signed, etc. It's a technicality, but an important one.. and that's what @GymLeaderPhil is trying to articulate.

Your room account is able to be charged by the credit card within the terms and protections setup between Disney and their merchant bank because they meet the criteria for checking the card, signature, etc.

The magic band doesn't charge to your credit card - it charges to your room account. Where the liability on transactions is handled between you and Disney.

 

[GoofGoof]

What business would prefer a customer use a CC over cash? None that I know of as those CC fees the business pays each and every time a CC is used add up and add up quickly. Not even Mickey has the leverage to do away with those charges.

There is a charge to the business, but they want the extra sales.

Almost every get out of debt system tells people one of the first steps they need to take is to get rid of their credit cards. Shred them and never use them. Why? Besides the high interest rates, it's a proven fact that people will spend more on credit than they would if they used actual cash. Another example is casinos. Why use chips instead of cash? People will bet more when it's just chips. And the best part for businesses is that it's subconscious. Almost everyone will say, "my spending won't change with credit vs cash" but studies show that's not the case at all.

 

[CDavid]

Very well said.

And it doesn't take very many swipes (per guest, per day) to make an enormous, enormous amount of money. Like I said earlier, if each guest just spends 5% more each day, that's hundreds of millions of dollars in profits every year without the Mouse having to do a single thing.

I have to wonder just how much more guests really will spend over the long term. Granted, people spend more freely when they aren't directly using cash, but we've been doing that for many years using Disney's Key to the World card or own own credit and debit cards. Once the novelty factor of the bands wears off, how much more will people spend because they're swiping a band than they previously spent by swiping a card?

What is the manufacturing costs of the magic bands to Disney. I have heard many people are buying extra ones to match their outfits. If the cost for a band is only a dollar or two and they sell them for 12.95 that would be about 10.00 profit per band.

On these forums, I've read the bands cost "a couple dollars" and that they cost $5 to $6. I'm possibly inclined to believe the higher price since it is more precise, but either cost is much more expensive than the cards used previously (and worse still if new bands are mailed for each resort stay).

Besides the high interest rates, it's a proven fact that people will spend more on credit than they would if they used actual cash. Another example is casinos. Why use chips instead of cash? People will bet more when it's just chips. And the best part for businesses is that it's subconscious. Almost everyone will say, "my spending won't change with credit vs cash" but studies show that's not the case at all.

Part of that is due to convenience and the fact that 'it's not cash' (like chips), but part is also due to just having more money to spend. If you leave home for WDW with $2,000 cash or debit, then that's all you're spending - period. But if you leave home with a credit card having budgeted spending the same $2,000, it is now possible (and indeed quite easy) to go over budget. With cash that can't happen.

 

[BigTxEars]

There is a charge to the business, but they want the extra sales.

Almost every get out of debt system tells people one of the first steps they need to take is to get rid of their credit cards. Shred them and never use them. Why? Besides the high interest rates, it's a proven fact that people will spend more on credit than they would if they used actual cash. Another example is casinos. Why use chips instead of cash? People will bet more when it's just chips. And the best part for businesses is that it's subconscious. Almost everyone will say, "my spending won't change with credit vs cash" but studies show that's not the case at all.

Oh no doubt credit increases spending, I have lived it when I was younger

I should have been more clear, trying to type on my iPhone at work is never a good ideal. Last week I posted something from it and tried to type the word "Shot" when I got home I saw the post and it was the word "s***"

Whoops....

I just do not see WDW trying to force credit use in the parks. Is some areas it makes sense, higher cost items being sold. But in lower cost areas such as carts and such it does not. I think some one earlier posted it about the minima charge many retailers have before they will take a credit card due to fees. I think that if Disney set it up where credit was used for every purchase in the park that could hurt their bottom line. I am going to buy a soda at the parks, I would prefer to pay $4 cash, Disney would prefer me to. But if they set up the system where everything goes on credit on the MB then I am still going to buy that soda but Disney has the bottom line impact. Unless of course now I buy two sodas on credit instead of one from cash. It's a pretty complex issue at the end of the day to try and balance I think.

 

[flynnibus]

I hate it when opening a page here makes me facepalm

 

[seascape]

Oh no doubt credit increases spending, I have lived it when I was younger

I should have been more clear, trying to type on my iPhone at work is never a good ideal. Last week I posted something from it and tried to type the word "Shot" when I got home I saw the post and it was the word "s***"

Whoops....

I just do not see WDW trying to force credit use in the parks. Is some areas it makes sense, higher cost items being sold. But in lower cost areas such as carts and such it does not. I think some one earlier posted it about the minima charge many retailers have before they will take a credit card due to fees. I think that if Disney set it up where credit was used for every purchase in the park that could hurt their bottom line. I am going to buy a soda at the parks, I would prefer to pay $4 cash, Disney would prefer me to. But if they set up the system where everything goes on credit on the MB then I am still going to buy that soda but Disney has the bottom line impact. Unless of course now I buy two sodas on credit instead of one from cash. It's a pretty complex issue at the end of the day to try and balance I think.

This part of the discussion seems to indicate next gen could be working. By getting the small charges on my magic band and all the fees they would pay if the charges were separate going with my room it allows them lower fees from the credit card transactions. In my case it won't add anything to sales because I buy what I want when I am on vacation and don't worry about it. So it cones full circle and while many hate the fast pass plus those who understand the credit card fees that Disney saves and the increase spending understand it's good for Disney and will improve the bottom line.

 

[GoofGoof]

This part of the discussion seems to indicate next gen could be working. By getting the small charges on my magic band and all the fees they would pay if the charges were separate going with my room it allows them lower fees from the credit card transactions. In my case it won't add anything to sales because I buy what I want when I am on vacation and don't worry about it. So it cones full circle and while many hate the fast pass plus those who understand the credit card fees that Disney saves and the increase spending understand it's good for Disney and will improve the bottom line.

It saves Disney money and I actually prefer this as a guest too. I prefer 1 big charge from Disney at the end of my trip over 35 different charges to look at on my CC bill. It also makes me less likely to use cash for anything. I know I could always charge things to my room card before, but I generally only did that for meals. I didn't use that for a drink in the park or souvenirs. Not really sure why that is and maybe I'm just weird or something. With the band it was much easier and I found I never even hit an ATM while I was there on my last trip.

 

[omurice]

Who knows, $100 per mile for the monorail, $2 billion for next gen, it's all guesses on here IMO. Who know why this guy left, better offer, family issues, tired of working and wants to enjoy his wealth, fired, broke some company policy.....seems to me it could be a number of different reason.

I keep reading about Wall Street being concerned about next gen and it's negative financial impact on the parks. That might be true as well but the stock price sure is not showing that. Who knows.

Monorail is only $100 per mile now?!?
Woo-hoo! Let's kickstart this thing. I'll finish to Epcot resorts and Studios myself at that price

Another spur from Studios to Coronado, AK & AKL... then the other deluxe, moderates. And finally to the values.
So who will pop for monorail to Pop, and who will spring for monorail to Springs?

(Sorry to go off topic)

 

[BigTxEars]

Monorail is only $100 per mile now?!?
Woo-hoo! Let's kickstart this thing. I'll finish to Epcot resorts and Studios myself at that price

Another spur from Studios to Coronado, AK & AKL... then the other deluxe, moderates. And finally to the values.
So who will pop for monorail to Pop, and who will spring for monorail to Springs?

See now I have to break out my voodoo dolls and stick a needle in it's butt, hope it hurts!