Festipay, the cashless payment service for music festivals, said it expects to see a 27% year-on-year increase in transactions after introducing an open-loop contactless card during 2016.

Powered by Prepaid Financial Services (PFS), the UK e-money issuer and financial technology specialist, Festipay predicts that it will process more than seven million transactions by the end of this year's festival season, which is well up on the 5.5 million recorded in 2015.

The open-loop contactless prepaid MasterCard solution was introduced for Hungary’s Sziget festival, but allowed users to make transactions in other locations.

The closed-loop version was also in operation for attendees who opted for a solution that worked exclusively within Sziget festival, with any unspent funds being reimbursed after the festival ended.

Laszlo Marki, chief executive at Festipay, said: “Being able to give festival attendees the choice of an open-loop product to be used during and after Sziget was a great way to introduce a prepaid solution to millennials in Hungary. For us, the solution is also great from a branding perspective, as the Festipay cards are valid for two years from their issue date.

"The popularity of open-loop cards meant that many attendees did not require reimbursement for unspent cash loaded onto the cards, but for those who were using the closed-loop product, the agile technology platform PFS provides significantly reduced the amount of time taken to process refunds. As 100 per cent cashless festivals increase in popularity, having a robust and fast reimbursement system in place was a crucial factor for us."

PFS said it is now in the process of helping other festivals to roll out open-loop prepaid solutions to prevent issues with reimbursement after events have ended.

Noel Moran, PFS’s chief executive, said: "The open-loop solution we provided at Sziget was a great success, and Festipay will continue to generate revenue from this programme long after the festival has ended. The introduction of open-loop cards coupled with the streamlined reimbursement process for unspent funds demonstrates how easily this could be rolled out to every festival or event anywhere in Europe without any friction.”