German publication Rhein Zeitung recently published a new article on the management of the Ring°card. Their source material comes via the German National Audit Office.

We touched on this story a couple of weeks ago via a YouTube clip. It’s difficult not to inject personal opinion into this story; the Ring°card is essentially poorly executed payment system based on a concept that was not all that great to begin with. Add to that reports of gross mismanagement and well, frustration and despair soon become overwhelming emotions.

Thanks once again to Frank form Amadeus Photography for acting as translator. You can read the full transcript of the Rhein Zeitung article at Frank’s website. After the break, though, we have included of the key paragraphs.

If you have experience using the Ring°card we’d love to hear your thoughts in the comments section as well.

Ring Drama: The case of the CST – Kai Richter really cashed in at the Ring.

Published 26 February 2011

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What led to this aberration? The original business idea seemed as simple as clever: the Nurburgring should be run cash-free. To do this, every visitor did – and still does – get a so-called “ringcard”, a prepaid card that can be topped up and acts as currency and entry ticket at the Nurburgring. Advantages for the Ring operators: No labour intensive cashier systems or having deal with small change every day: a sleek, automated system that also records visitor numbers.

Investment in ticket machines and required software would soon pay for itself, the ring-leaders thought in 2007. Especially since they were anticipating a huge number of visitors. The advantages for visitors to the Ring: virtually none. For operators of such non-cash payment systems often have ugly ulterior motives. They calculate that visitors won’t use up the whole balance on their cards and that any remaining amount will simply lapse. The Ring operators were brazenly building on this effect, as the secret draft of the audit report shows – but more on that later.

No feasibility or viability studies: When the CST was founded, it was estimated that the whole cash-free payment system would cost up to 5 million Euros to put in place. Nevertheless, neither the technical feasibility nor the economic benefits were considered. So far, pre-paid systems like this one were mainly used in football stadiums – such as in Kaiserslautern, a venue that can not be compared with the Nurburgring. A costly birth defect: The Audit Office recommends to abolish the card system again. Even if things go well, the system will generate losses of up to 9.29 million Euros until 2014.

Questionable business practices with remaining funds: In October 2009, one-and-a-half years after the CST was founded, the supervisory board of the Nürburgring GmbH received a business plan for the first time, ie, a record of profitability. The plan did not only – highly unrealisticically – project that 1.5 million cards will be given out during every fiscal year, but it was also calculated that 40% of customers would forfeit a remaining balance of on average 2.75 euros per card – but visitors can claim back the amounts over a period of four years.

Chaotic reservations: Although Richter’s company Mediinvest was responsible for business acquisition, and received 54.000 Euros for this during 2009 alone, an additional accountant and another public accountant were hired by Richter himself in 2009. Unauthorized charges for this until September 2010: around 71 000 euros. In addition, the accounting was so chaotic that many transactions were posted twice. About 190.000 Euro were booked as “Gone Astray”, while just under 150.000 Euro were booked under “Incorrect Account”.

And even worse: The CST could have saved 720.000 Euros if the management had ordered only 500.000 payment cards in 2008, as recommended by Payment Solutions AG, instead of the 1.5 million cards that were ordered for use with the system. Only a fraction of the 1.5 million cards were actually used.

Read the full transcript HERE.