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Campus Cards >> The Revenue / Service Balance

2/28/2006

By John Savarese

More than ever before, campuses are finding imaginative ways to generate revenue from campus cards to offset the costs of providing convenience and service.

Ten years ago, students at the University of Vermont had to carry separate ID cards, meal cards, and athletic cards. Today, the single CATcard combines all of these functions, plus library privileges, an optional declining balance program called CAT$cratch, access to computer labs, use of vending machines without quarters, and even a ride on the campus or city buses. Still, UVM is one of many schools that have felt the need to explore whether a comprehensive campus card program is indeed a money-maker or an ongoing expense.

Reaching Beyond the Campus

The University of Vermont CATcard, based on CBORD’s CS Gold system (www.cbord.com), brought convenience and added value to students’ daily lives, and efficiencies to the university’s operations. But operating the card program also costs money. As a state institution, UVM was not permitted to charge students for their initial card, nor is the card operation supported out of the general university budget. So when the CATcard program needed to find ways to support itself and to pay back its $250,000 seed-money loan from the university, it began to look off campus for revenue sources.

“I had some excess capacity in the system that I thought I could parlay into revenue,” remembers Mark McKenna, the program director of the CATcard Service Center. By helping nearby St. Michael’s College (VT) get its card program off the ground, and later doing the same for Champlain College (VT), McKenna was able to be a good neighbor and at the same time spread out the costs of all three institutions’ card programs. UVM provided its sister institutions with consulting and expertise to set up their card programs, and then acted as an application host, relieving them of the responsibility of running their own servers and managing their own software systems. In effect, the two client colleges are able to access UVM’s card office expertise and are sharing hardware facilities (including redundant servers, disaster recovery measures, data backup, spare parts, and other expensive resources). The clients operate the front ends of their own programs, so students and faculty are not even aware that the card operations are actually being hosted at another location entirely.

EXPANDING CAMPUS CARD services need not be costly; services can pay for themselves.

St. Michael’s and Champlain pay UVM about a dollar a month per campus patron (students, faculty, vendors, etc.). That amount just covers UVM’s actual costs to support the outside campuses, while providing revenue that keeps the shared hardware and software infrastructure up to date at a pace that none of the individual campuses might be able to afford to do on their own.

Another important source of added revenue for UVM comes from a different off-campus source: the local merchants in Burlington who depend on students to help their businesses thrive. UVM students can use their campus cards as a form of payment (called CAT$cratch) at local restaurants, fast food shops, grocery chains, video stores, bowling alleys, or any of the 120 businesses that have readers to swipe the UVM card. If a student gets in a fender bender, she can use her CAT$cratch to have her car fixed at one of three local auto repair shops, hire a lawyer, even pay a fine to the Burlington Police Department.

The local merchants pay UVM’s CATcard Service Center a sliding fee of 3.25 to 9 percent on the transactions, based on their annual sales via the CATcard, and taking into account how frequently they wish to receive their payments. That fee is more than most merchants pay to accept bank credit card payments (usually around 2 to 2.5 percent), but they get more than just a way to accept payments for goods and services. The UVM card program promotes its member merchants on its Web site, gives out goodie bags of products at the beginning of the semester, and gives businesses more access to students on campus than they otherwise would have.

By institutional policy, UVM’s CATcard Service Center must break even every year. Even so, there has been enough revenue to plow back into the program, making it stronger and more resilient. And about those loans: The card program paid back its initial five-year loan in four years, and repaid a second upgrade loan in three years. Now UVM is actively talking to more Vermont institutions, to get them to sign on with its campus card operations program.