Campus ID News
Card, mobile credential, payment and security

Card system vendors refine off campus offerings

Chris Corum   ||   May 31, 2007  ||   , ,

Students enjoy added flexibility and institutions benefit from new revenues

Andy Williams, Contributing Editor

In the drive for more bucks–and don’t kid yourself, nearly every college and university needs more money, particularly in today’s tax revolt environment–one overlooked revenue stream could be as near as the pizza joint next door to the college.

Off campus card usage is becoming more common among campuses, particularly since campus card companies have overcome one of the major obstacles: the institution’s perceived loss of on-campus revenue. The fear of ‘robbing Peter to pay Paul’ kept many colleges from pursuing off-campus programs … But fear seems to have largely subsided.

All those interviewed agreed on one thing: Allowing students to use their cards off-campus enhances the student experience.

“One of the things we did last spring and last summer was to interview a variety of presidents, provosts, and vice presidents, and followed that up with a survey, trying to find out what are the key issues among universities,” said Tom Bell, vice president, industry relations, for Blackboard, which produces the campus card program BbOne™, is part of the Blackboard Commerce Suite™.

“The number one issue was the student experience and how to improve it,” Mr. Bell said. “Number two was accountability to your customer, the student, staff, private entities who may be evaluating your campus (such as accrediting agencies).”

And number three? You guessed it. “Colleges are looking for new sources of revenue. That’s something we run into all the time,” said Mr. Bell

Obviously numbers one and three are closely related when it comes to off-campus card use.

“The number one thing from my road show when I visited 27 schools, was that students wanted off campus use,” said Shawn McCarthy, managing director, Off Campus Advantage, now a subsidiary of campus card provider CBORD. “It’s out there enough so they’re all hearing about it and they see the value of it. They don’t want to carry a lot of extra things (in their wallets), they love the way it works on campus with vending, laundry, so they want everything on one card,” he added.

Jeff Zander, vice president of General Meters, which manufactures and supports the campus card program known as the University OneCard System, said it only makes sense for merchants to “capitalize on this captive market, students from nearby campuses who are increasingly asking to use their University OneCard at off campus at restaurants, movie theaters, pharmacies, taxi services, hair salons and more. Students are going off campus, they can spend the money wherever they want and campuses are recognizing this fact. They’re also aware there’s money to be made here,” said Mr. Zander.

“Students are getting more savvy with payment products, it’s something they expect,” said Pedro Marzo, Blackboard’s BbOne director, “and they’re pushing the university to do it.”

Does on-campus revenue drop?

Mr. Marzo says in the past, the discussion about off campus use was different. “We had to first and foremost sell the concept because they were initially skeptical.” The biggest fear, of course was would it pillage on-campus sales, particularly at dining facilities and bookstores.

Losing on campus revenue “was valid at one point,” said Mr. Zander. “But they’re adults and they’re going off campus so why not make some money off them? If they put money on that card, they’re going to want to use that card wherever they can.” It’s the old ‘if you can’t beat them, join them’ mentality, he adds.

“That loss of on campus revenue argument is going away more and more, because on campus spending is going up,” said Mr. McCarthy. “It ups the amount of money deposited into those discretionary accounts and parents love it (that they’re able to) place a defined amount of money into a discretionary account.”

Mr. Marzo agrees. “We’ve been following this data and we’ve found that when a university goes off campus, they actually see an increase in on-campus spending because there’s more money in the system,” he said. “Most of them do not see a (negative) impact in on campus sales. On average, on campus spending increases 25% because there’s more money in the system. If students have money on the card, they’ll still spend it on campus because it’s more convenient.”

Percentage-wise, Mr. Marzo estimates that for every dollar a parent deposits in his child’s account, less than a third goes for off campus purchases.

He said many universities have two purses on their campus cards, one for dining and another “called flexible funds. Most of the time, only flexible funds can be used off campus but they also can be used on-campus” while the dining purse is limited to on-campus use only.

Added Mr. Bell: “As the parent of a college student, I love the idea of depositing money to my student’s account rather than sending them a check for $200. I then have some idea of how it’s going to be spent.”

“Parents feel better about making deposits into a closed loop declining account,” said Mr. Marzo.
“We’ve seen schools that compete in the same market, the one with the off campus program is seen as more favorable in the eyes of students and parents,” said Mr. Marzo.

Making the move off campus

Colleges who tried to manage off campus programs in many cases found themselves “a victim of their own success,” said Mr. McCarthy. Colleges would end up with 75 to 100 merchants but it became a nightmare to settle with each merchant. They quickly realized they didn’t want to be in this business, he added.

Niles Dally, vice president, sales and marketing, for NuVision Networks’ One Card System, remembers the first time one of its schools installed an off campus program. “It was 15 years ago, a small school, which had this idea to put a card reader in a local pizza place. The cardholder would call up the pizza joint and read off the ID number off his card, it would clear his account and the pizza was delivered. Everything worked fine at first but in the first week, the thing crashed. Actually, the concept crashed. It was taking four to five hours to get a pizza because they were so busy.” But the college and the merchant made money, lots of it, he said, since the school was keeping a 20% commission.

Things have quieted down since then, or gotten more organized and sophisticated. Now, Mr. Dally estimates off campus usage has grown some 200%.

CBORD and its Off Campus Advantage subsidiary offer central processing

CBORD recently purchased a company specializing in off-campus use, Off Campus Advantage (OCA), which had been serving many of CBORD’s customers that had formerly been users of Diebold’s Gold offering (CBORD acquired Diebold’s Card Systems Division in 2005).

“What we found interesting was they (OCA) had a central processing technology solution which is what we were developing,” said Mr. McCarthy. So, instead of continuing with development of the central processing part, CBORD went a step better and bought the company, which is now a CBORD subsidiary.

“Up to this point, all the campuses needed to connect through a dial-up (if they had off-campus functionality),” said Mr. McCarthy. “Now that’s alleviated with the OCA technology which connects all the campuses with a secure connection.”

Mr. McCarthy sees CBORD and OCA as the “bridge” between merchants and the college.

“There’s been a tremendous reaction from schools because the schools want this in a hurry,” he said. There’s no cost to the campus, it provides them a revenue stream and “we’ll take care of everything. They just have to monitor the reporting features,” he added. “If they wanted to recruit their own merchants, we’re open to that, but it’s a soup and nuts operation.”

“We would sell them specific readers that they could take off campus. But when they started getting out there and realized what it took, they realized they needed a better solution,” said Mr. McCarthy.

CBORD is in the process of creating a national merchant network that its colleges to tap into wherever they are.

General Meters offers campuses the ability to self-manage or outsource the program

In General Meters’ case, the university can also buy the reader and operate the off campus program on their own. “Some campuses buy our readers direct and solicit merchants themselves and they make all the money,” said Mr. Zander. “And then we have some campuses tell us they don’t want to get involved at all. We sell it to the merchant directly.”

“In most cases the merchants don’t purchase the readers, they rent them from the campus or from us,” adds Mr. Zander. “One university gave a reader to the merchant and every time the university card was swiped through, the college took 25 cents, whether it was a dollar sale or a one hundred dollar sale.” That college, he said, turned a tidy profit. “There are a lot of ways a campus can make money.”

“There are many different ways the program can work, but it’s up to the campus to tell General Meters what they prefer. Unless the campus card office gives us their blessing, we don’t do it without their approval,” he added.

He said that when colleges let General Meters do everything, “we gamble. If the merchant leases it, we bundle a lease agreement so it covers our expenses … and we split the profits with the campus and/or the merchant.” He said General Meters has created an entire division dedicated to off campus merchant programs (in cases where the campus doesn’t have the time, personnel and/or resources to pursue such a program but wants help in developing one). This program is known as 1Card Advantage. In this example GMC will handle everything right down to connecting the terminal in the merchant location then sharing profits with the campus and/or merchant based on the variety of agreement options offered by GMC.

He said more campuses are realizing the potentials of buying these terminals and managing them themselves. “But we still have a lot of clients who want us to do it all.”

General Meters’ merchants can be paid daily, weekly or monthly, said Mr. Zander. The General Meters system can generate a dollar amount (of sales) and a check is sent to the merchant. “Or we can do an electronic transfer where General Meters can transfer the value to the merchant’s online account. The most efficient way is for the campus to cut the check and we confirm the balance.”

The card readers are manufactured by General Meters and are easy to install at just about any merchant location, he said. “We make a variety of readers that talk over a variety of phone lines. At the very minimum if you only have a phone line to conduct Visa and MasterCard charges, you can attach our reader to the same phone line,” said Mr. Zander.

NuVision offers web-based off campus purchases

NuVision rents colleges its card readers “or we can ship directly to the merchant,” said Mr. Dally. “In most instances, a card can’t go through a national clearing system because they still don’t have ISO numbers. So another device is necessary.”

Another option for NuVision’s college customers is “our web portal, a campus center. It has a shopper built into it and allows a cardholder to log on to the campus center and actually place an order for items at a merchant location. That’s usually done with merchants delivering a product, like pizza, or picking up an order (e.g. an off campus bookstore). It’s not designed for those locations where a cardholder needs to present his card,” said Mr. Dally.

NuVision’s software is built into the card reader. “Just put a card reader on a merchant’s table top, and plug it in. It attaches to a phone line, has a modem built in as well as our web portal,” Mr. Dally added.

Blackboard views merchant settlement as key to program success

With Blackboard’s BBOne offering, Mr. Marzo notes, “merchants can get reimbursed daily. We extract transaction details from our POS devices and debit the funds from the university account and deposit 100% of the funds back to the merchant. We’ve modeled the service after credit card best practices.”

Monthly, he explained, Blackboard accounts for the money in the various merchant transactions and debit the merchant for his fees, which includes fixed rates, the percentages which vary by merchant and by each university. For example, gas stations, with lower margins, would pay a much lower fee then say a restaurant, said Mr. Marzo. Those collections are shared with the universities.

As to the money that can be made, and the reasons for implementing an off-campus program, it depends on the university’s population total, discretionary deposits and the campuses’ physical location, said Blackboard’s Bell. “I know of many colleges that significantly support their ID operation with their off campus revenue. On other campuses, campus revenue helps fund projects, such as access and activity control that improve the student experience but are not direct revenue-generators. For other universities, off-campus is simply a cost-saving opportunity. I know of campuses that want to extend their off campus capabilities so they don’t have to open a dining facility during late night hours that can be difficult to staff and control.”

Getting merchants to buy in … and keeping others out

The philosophy behind recruiting merchants is simple. Get students as customers now and they may stay with you for a long while after they graduate. “We all know there’s a soda war that’s going on,” explained Mr. Dally. “Whatever soda you drink then you’ll probably drink for the rest of your life. The same holds for McDonald’s, Burger King, etc. For them to give 10 percent away for the ability to have the student use his debit account at their restaurant” is a good deal for them.

“What’s nice in a campus community is that it’s fairly easy to define merchants that have a good value for the students, such as food, pharmacies and health and beauty,” said Mr. McCarthy of CBORD. “We work with colleges to define what merchants they want. Colleges say parents have entrusted us to build a trusted merchant community to meet the students’ needs.”
“For merchants, they tap into a pool of funds they wouldn’t normally have access to,” added Blackboard’s Mr. Marzo. “When we approach merchants, we lead with the access channels they’re going to have available to them, like emails, posters and flyers that (go out to students). Some schools consider going off campus because the merchants are knocking at the door. It’s a push and pull situation,” he added.

In Blackboard’s case, the company solicits the merchants. “Every merchant we approach is pre-approved by the institution,” said Mr. Marzo. “We think of it like working with an architect in designing a house. You wouldn’t design a room without consulting the client. We wouldn’t, for example, add an off campus bookstore because there’s an on-campus bookstore.”

But for those institutions without an on-campus bookstore, giving their students access to bookstores off campus would be an ideal arrangement, he added.

All campus card companies talked to for this story agree that certain merchants are off limits such as liquor stores, tobacco, firearms, and distributors of obscene material. “Some Catholic schools are very sensitive to having pharmacies on the program because they sell family planning products,” added Mr. Marzo.

“When they think of off campus you think of fast food, but it goes beyond that. The most popular category we’ve seen is grocery stores,” said Mr. Marzo. “We’ve seen a trend in universities wanting to add health foods to complement their on campus food offerings.”

“The applications most common are restaurants first, then pharmacies. They’re making huge money. One is making $40,000 a week in sales,” said Mr. Zander.

Off campus use can also run the gamut from golf courses to housing complexes. “We have one university in the Midwest that owns a golf course and it’s part of the off campus program. And one in New England owns several off campus housing complexes. They’re thinking of allowing students the ability to pay their rent with their university IDs,” said Mr. Marzo.

“And we’re barely scratching the surface,” he said. One university has just cleared a partnership with the local major league baseball team to allow students to pay for their tickets with their campus cards.

A growing trend

“The percentage of off campus use is growing,” said Mr. Zander. “Right now, for every 10 campuses, only about three or four have off-campus programs. I expect that number to double in the next three years to between six to eight.”

Added Mr. Dally: “We implemented this because the students wanted it and colleges could make money. It’s a synergistic effect. The money is motivation for some and for others it’s providing a service to students. Mom and dad win because they don’t have to send money to the kid because there’s control over it. The kid wins because he learns to budget. The merchant wins because they get more business. Colleges win because they get more money and thus have more to spend on student services.”

“Students are incredibly interested in a variety of services,” adds Mr. Bell. “Dining services are now serving sushi. I never thought we’d get there but (choices) have expanded, and off campus has also expanded to allow students to eat where it’s most convenient for them.”

Subscribe to our weekly newsletter


Sheridan College onecard banner
Sep 21, 23 / ,

Interview: Sheridan College onecard manager details hugely successful mobile credential rollout

At the start of the fall term in 2022, the Sheridan College onecard office rolled out its new Mobile onecard. The Canadian institution serves 27,000 students across its three campuses in Ontario, so launching a project of this magnitude required careful planning and a well-orchestrated marketing effort to ensure success. CampusIDNews spoke with Aesha Brown, […]
University of Minnesota Twin Cities mascot
Sep 21, 23 /

Treasure hunt sends students in search of mascot’s lost campus card

At the University of Minnesota Twin Cities, the mission is to find Goldy’s U Card. On each of the institution’s three campuses, one of the mascot’s U Cards is hidden. Each undergraduate student that finds a card will receive a $100 reward. Finding the cards will not be easy. To help in the hunt, three […]
UX Tech event logo
Sep 19, 23 / ,

ColorID’s UX Tech event explores campus ID impact on user experience

We all want great user experiences for our cardholders and our system administrators, and advancements in technology are making this more possible than ever before. New credential and reader technologies are transforming the campus ID and with it the campus. The event is hosted and sponsored by UC Irvine, and will take place at the […]
CIDN logo reversed
The only publication dedicated to the use of campus cards, mobile credentials, identity and security technology in the education market. CampusIDNews – formerly CR80News – has served more than 6,500 subscribers for more than two decades.

Join us, @NACCUorg, and @TouchNet to explore how campus card programs can successfully navigate the sales and procurement process. Join the webinar on June 6, 2 pm EDT.

Webinar: Learn how the University of Arizona uses campus cards, mobile ordering, kiosks, lockers, and robots to revolutionize campus dining. April 7, 2-2:30 EDT. Register Now at

Load More...
CampusIDNews is published by AVISIAN Publishing
315 E. Georgia St.
Tallahassee, FL 32301[email protected]
Use our contact form to submit tips, corrections, or questions to our team.
©2023 CampusIDNews. All rights reserved.