More than ID: ATM services, off-campus shopping—even high-tech biometric systems—are enhancing campus card programs - Campus Card Trends

University Business, Feb, 2003 by Jean Marie Angelo

What campus card program manager doesn't dream of a self-supporting card program--one that is so well marketed, it pays for itself or even turns a profit? How about an ID "card" that isn't a card at all, but is designed to cut down on card replacement costs and staffing needs, saving do[tars in the process? While ID card program managers maintain that it is service to students that drives their planning strategies, there's no denying that the revenue generated by providing such services can be mighty welcome during tight economic times. Still, today's savvy students know a good deal when they see it--and they recognize programs designed to benefit card partners instead of users. The trick is to create a win-win-win card program, say the managers: one that adds needed services for users, entices program partners, and enhances the bottom line of the institution, all, at the same time.

Bank and Go

Most college students will tell you that banking can be a real hassle if you live on campus or spend most of your week there. National. or regional bank branches and their ATMs are often located miles from campus, and on-site college banking partnerships seem to come and go with annoying frequency. Ask any campus denizen to paint an ideal campus banking scenario and she'll probably ask, "Why can't my campus ID card function like an ATM or debit card?"

At the University of South Florida in Tampa, it does; the school has simply tied the card service office to its own credit union. The student card office supplies the "customers" (students and staff) and the plastic cards; the USF Federal Credit Union provides the banking services.

After all, says Delma Rodriguez, coordinator of the USFCard Center, in 1994 there were already 6,000 student members of the USF's Credit Union. "It just made sense to expand that relationship."

So today, card officials sell students on the ATM/ID card model when they arrive at orientation. Students can sign up at any time, says Rodriguez, but the school pushes the convenience of loading all available applications onto the campus card before students begin attending classes. The promotional approach is working, says the program's coordinator. Of the 6,737 students who came to the three fall semester orientation sessions in the summer of 2002, about half were "non-traditional students" transferring from other schools, or returning to higher education as adults. "These students already come to us with a banking relationship," Rodriguez explains. But 498 of the traditional incoming students opened an account with the credit union and had ATM services loaded onto their campus cards, she says. That's about 15 percent of those attendees; not a bad response for an initial marketing attempt, she offers.

To enable the banking function, USF students simply open an account with the university's credit union when they get carded, says the coordinator. (The logo of the credit union is clearly displayed on the card.) The university receives $1 from the credit union for every new account opened and linked to the USFCard program. Rodriguez estimates this payment generates $500 to $750 per semester for her office. In addition, the credit union pays the university card program a flat fee of $2,100 per month--a tidy $25,200 annually. (The flat fee replaces another type of arrangement, wherein the card office receives a small commission on the value of each retail transaction conducted with the ATM card.) But the bulk of the program's revenue comes from a 1 percent payment the credit union makes to the card office on the total value of the checking and savings accounts opened by students and staff. In Q4 2001, this payment came to a respectable $10,200.

The program is profitable for USF, says Rodriguez. "It has helped us keep our card costs down." The revenue covers the costs to place staffers at four small banking service locations throughout campus, and the $10 fee the university initially charges students for the card has remained the same since 1995.

What's more, the USF Credit Union is one of about 50 other credit unions nationwide that have agreed to allow members to use each other's ATM terminals without charging additional transaction fees. Having such an agreement in peace is important in wooing students and their parents to open accounts, notes Teresa McDougall, assistant vice president of USF's Federal Credit Union. "Parents of college students don't want to see them getting dollared to death," she says. By creating a banking relationship with the on-campus credit union, Rodriguez ensured that all students could use more than 800 ATMs located throughout the state--80 of which are located in the greater Tampa Bay area. The relationship also allows USF Card holders to make debit-based purchases at grocery and department stores, and other national retailers.

For IHEs, forming relationships with financial institutions and carrying their logos on campus cards has only recently become more common, observes Cindy Vetter, director of the UNC Card Program at the University of Northern Colorado, and the chair of the National Association of Campus Card Users. That's a turnaround from as recently as 2000, when slapping bank logos on campus cards was definitely a trend that had come and gone. A slew of banking mergers and acquisitions made it too expensive to keep up with printing and reprinting campus cards.