Campus Technology

Inside the Card Programs

How do the campus card vendors see their plans? This sampler of snapshots is a good place to start your program search.

CardSmith (www.card-smith.com)
Founded in 2003 to provide hosted card solutions. Managed by people who worked at AT&T from 1995 to 2000, when AT&T was a system provider of card systems to higher education. Currently has six higher ed clients and two are private high school clients. Target market consists of small to mid-size schools for which the cost and challenge to own and operate a card system is not practical, schools of any size with a limited card program, and schools with multiple campuses.

Revenue model. “With everything included, the cost of having CardSmith host and turnkey-manage a card program is typically between $30,000 and $50,000 annually,” according to Brian Farley, VP for Business

Development. “As far as off-campus revenue g'es, if you can reach $500,000 to $1 million a year in discretionary sales, then you will have a successful program. At that level, an institution can expect to earn $20,000 to $30,000 per year toward the cost of the card program, just from off-campus merchant revenue. Other revenue opportunities include increased sales at the bookstore; campus dining, vending, and other auxiliary services; cost recovery from print and copy operations; float on prepaid funds on deposit; administrative and lost card fees; etc.” Farley adds: “A card program generally is not a huge money-maker on its own, but a CardSmith program can create positive cash flow for an institution and deliver a high-value service for students and parents.”

Advice. “Some schools worry that spreading the card off campus will be a threat to their dining operations and providers,” says Farley. We’ve proven that you can benefit your on-campus dining operations with a well-run card program. Done right, the card program lifts all boats, on-campus and off.”

CBORD (www.cbord.com)
In the card business for 30 years. Acquired Diebold Card Systems in 2005. Currently, over six million students use CBORD cards. Maintains two product lines, Odyssey PCS and CS Gold.

Revenue Model. From Bruce Lane, executive VP: “How much d'es a card system cost? There is no pat answer. How much of the elephant do you want to cover? For off-campus transactions, schools charge merchants 10 percent or more. They are used to paying maybe 1 to 2 percent to Visa. So over time, that rate will have to come down.”

Reasons to have a card program. “A well-evolved, well-developed campus card system is increasingly an expected part of student life,” says Lane. “Kids are savvy. They hear the talk among older siblings and friends. The card program is one of the things they expect to hear about on the campus tour. It is one of the things that can keep a school in the game or distinguish it. Schools where it is largely about selling stuff think first about making money. But other schools are more interested in offering a large range of services and privileges managed by a card swipe. Those are the campuses where service comes first.”

Advice. “The three legs of a card program are students, parents, and administrators. If it d'esn’t benefit all three, it won’t last.”

Blackboard (www.blackboard.com)
Founded in 1997. Entered the campus card market in 2001 by acquiring CampusWide Access Solutions (formerly an AT&T business) and Special Teams, a division of College Enterprises Inc. In 2003, Blackboard purchased SA Cash, which became BbOne, Blackboard’s off-campus solution. Blackboard offers the Blackboard Transaction System for dining, commerce, and access. Provides support for off-campus transactions through the BbOne service, and supports online transactions via the Blackboard Community system.

Revenue Model. “On a campus with 20,000 people, off-campus enterprises might add $40,000 in revenues to the bottom line,” says Tom Bell, VP, Commerce Industry Relations. “You can also earn interest on the float. If you have initial deposits of $4 million and keep them for a few months, you can earn $30,000 to $50,000 in interest.”

Management Tool. “From the CFO standpoint, the typical academic calendar only gives you about three full months a year to generate revenue,” says Bell. “Getting good reporting and being able to make quick decisions is extremely important.”

Advice. “At first, card programs were an afterthought—you might find a server located next to the deep fryer. But card systems have evolved from a dining services utility into a campuswide solution. A place like Penn State sees 20 million transactions per year. If that d'esn’t qualify as an enterprise-level issue that deserves the attention of the CFO and the CEO, then I don’t know what would.”