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

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.

Complicating matters were the high expectations card service directors had of banking relationships. "Between 1995 and 2000, many campus card offices were looking to banks to fund their programs," explains Vetter. They wanted the financial institution to pay fees outright to the campus card office. "It was difficult for the banks to write any type of business plan to support this when they didn't have any history to go on," she says. Banking executives had to cover costs somehow, so they passed them on to the students in the form of account surcharges. Students quickly saw through the setup and balked at opening accounts that charged higher fees than the banks back home, or even those off campus.

Those first IHE-bank relationships "didn't work at all," says Verier. But campus card program directors have since found the right formula. For starters, the basic percentages on commissions and surcharges have been reduced to make the models competitive with other traditional banking relationships. Many financial institutions now view campus card relationships as "customer lifecycle" investments. They know that if treated well, the college students who sign on at 18 will be customers for life--returning for car loans, mortgages, and investment opportunities.

Many schools are now going forward with these programs, but are rethinking their expectations. The key lies in devising a program that makes good business sense for all parties, while providing students with something they truly need and want.

Rec Center Goes Biometric

Thanks to biometrics, some IHEs are actually doing away with campus ID cards, at least for some functions. For example, a student heading to the new $13 million Recreation and Wellness Center at Orlando's University of Central Florida, need not worry about where to stash a plastic card while jogging on the treadmill. Access to the center is not card-based, but relies on biometric technology that identifies each visiting student by his or her fingerprint.

Rick Falco, coordinator of Business and Technology at UCF, knows he's ahead the pack, installing this technology. Falco and his staff opted for a fingerprint recognition system from Identix (www.identix.com), C*cure800 software from Software House International (www.shi.com), and Siemens AG network technology (www.siemens.com). System integration has taken more than a year, with the network and software installed first; biometric readers installed in the fall of 2002. The system became fully operational in January 2003, but already, the rec center staff and the university staff are seeing benefits.

To begin with, the campus card office is receiving fewer requests to replace damaged cards. "In the past, students wouldn't bother storing their ID cards in a locker when they came to work out," says Falco. Instead, he explains, they would tuck them in a sock, then accidentally step on them; or leave them on the pool deck while swimming and let them get wet. Because each card contains both a magnetic strip and a smart chip, replacement costs run UCF an estimated $10 per. The new technology changed all that. What's more, a reduction in support staff turned out to be an additional benefit: The four student employees who man the main desk checking ID cards, will soon be cut to two.

Still, transitions to ultra-high-tech systems don't always come easily. "We had quite a few bumps in the road," says Falco. At first, students resisted the change. "There was an uproar; they didn't want their fingerprints on file. They felt it was too 'Big Brother;" recalls Falco. So the rec center staff launched an education effort, telling students about the new system's benefits and proving that it was perfectly safe. Ironically, the installation delay enhanced the effort: For the first few months, the center had to rely on a mixed system--some card readers and some biometric readers--so students were able to use the old card-swipe system while witnessing the new system in action. They were also able to spy the shorter lines for entering the facility--a benefit that was not lost on them.

But there were other snags, especially with the software. The readers had to take a template of each fingerprint placed on them, and then upload the information to a software system. Almost immediately, Falco could see that the biometric system software could not handle the volume. About 12,000 of UCF's 39,000 students regularly visit the rec center, and there was simply not enough memory built into the software and the system to handle the amount of input. Memory needed to be upgraded, presenting another challenge: Although biometrics are new to the campus, military and government installations have been in place for some time, and those clients took precedence. The school had to wait eight months for the software vendor to make the proper upgrades--always one of the risks of being an early adopter.

Now that the bugs are worked out at the rec center, and the biometric readers are fully operational, UCF students may be seeing similar readers in the business school. There is talk of using such technology to monitor students when they take exams, verifying that an individual showing up for an exam is actually a student enrolled in the class.

But UCF not alone in its foray into cutting-edge identification technology. The University of Georgia, for one, has for years been using hand-geometry readers from Recognition Systems (www.handreader.com) to speed entrance into dining halls. Most recently, Johnson & Wales College's Denver campus added the same vendor's hand-geometry readers to control student access to dorms and dorm rooms. The readers will also monitor access to computer labs, food service, the campus library, and the athletic field.

Still, growth will be slow, and cost is the reason. In UCF's case, each of the four biometric readers cost $1,200; the four optical turnstiles needed cost a whopping $74,500; the system's panel was $2,460; the server that maintains the databases came to $6,150; new alarms were close to $1,000; and software licensing and upgrade costs are expected to be $2,000 annually. But system installation proved to be the most expensive budget item for UCF: Remodeling the facility to accommodate the biometric system, and installing the related cabling cost $136,900. In addition, the university must pay $18,500 per year on a five-year maintenance contract.

All of this, while a magnetic strip reader ranges in cost from $150 to $500.

"For schools and universities that are state funded, it is going to be hard to get the point of general use," Vetter points out. However, once the technology is streamlined, costs will come down, and more schools will contract installations, she predicts. Chances are, fingerprint and hand-geometry readers will grow in popularity before other biometric technologies such as face readers, iris scanners, and voice recognition systems, she adds. Face readers are currently less accurate than other biometric technologies, and iris scanners and voice recognition systems are just less proven at this point.

Partner Power

Certainly, there is nothing new about a campus card office adding local merchants--on campus and off--to the list of vendors students can utilize. Duke University, for instance, is noted for such a card program, which is linked to a debit account program managed by the card office, as well.

What is new, however, are a small group of marketing companies dedicated expressly to helping campus card directors establish retail relationships with local merchants, and maintain those business liaisons. This past April, the University of Mississippi at Oxford signed on with Student Advantage (www.studentadvantage. com), one of several new card-marketing services for IHEs. SA typically hires students as local sales representatives; they, in turn, make calls on local off-campus merchants, first to attract card program partners, and later, to maintain those accounts. SA's marketing and sales effort for Ole Miss launched in April. When the program went live right before the fall semester, 28 restaurants, stores, and other local merchants, had signed on. The plan is to keep adding merchant partners, says Kathy Tidwell, manager of Contractual Services Management, so the school has signed a three-year contract with SA to forge those links. The university receives close to 10 percent on each sale transaction drawn off student debit accounts managed by her office. The merchant-partner setup is already a money maker, and will become even more profitable as more merchants come on board, says Tidwell.

Students are enticed to patronize the partners with posters (provided by Student Advantage), articles in the campus newspaper, and e-mail alerts. To kick off the program, Tidwell's office invested $12,000 in a direct-mail marketing campaign targeted at potential student-card carriers and merchants. A publicity campaign then snagged free editorial coverage in local newspapers and in the campus rag.

Regular card use is encouraged via weekly sales and specials promoted in e-mail alerts and on the card Web site, and open only to students and staffers with cards linked to the merchant-partner program. To ensure hassle-free shopping, students are encouraged to deposit money in their Ole Miss Express debit accounts, at any one of four staffed locations on campus.

So far, 6,500 students and staff members have opened accounts for on- and off-campus shopping. (Total student enrollment is close to 12,000.) Schools like Ole Miss--large institutions in small towns, maintaining their own debit accounts (as opposed to linking with nearby banks)--are ripe for off-campus vendor marketing programs, notes Vetter. (Local banks, usually small in size, cannot handle the volume of transactions that student buying brings.) In turn, small-town merchants usually welcome the merchant-partner relationship; because of their location in a college town, and their reliance on students and staff for business, they can only benefit from the purchasing advantages the program offers students and campus employees.

The key to any new campus card model, say the experts, is to think of service, first, foremost, and last.

RELATED ARTILCE: Your guide to campus card consultants and service companies.

Consultants

Robert Huber Associates
  (www.allcampuscard.com)
White Consulting (www.campusonecard.com)

Card Systems

American Magnetics (www.magstripe.com)
Andover Controls
  (www.andovercontrols.com)
Best Access Systems (www.bestaccess.com)
Blackboard Inc. (www.blackboard.com)
CBORD Group (www.cbord.com)
Casi-Rusco/GE (www.casi-rusco.com)
Debitek/Ingenico (www.debitek.com.)
Diebold Systems (www.diebold.com)
Digital Access Control (www.dacinc.com)
General Meters Corporation
  (www.1card.com)
Honewvell/GE (www.honeywell.com)
ITC Systems (www.itcsystems.com)
Identicard Systems (www.identicard.com)
Intelacard (www.intelacard.com)
Kaba Ilco (www.kaba-ilco.com)
Locknetics/Ingersoll-Rand
  (www.locknetics.com)
NPD & Associates/NuVision
  (www.collegeid.com)
Schlumberger (www.slb.com)
Sensormatic/Tyco (www.sensormatic.com)
SimplexGrinnell/Tyco
  (www.simplexgrinnell.com)
Synergistics (www.synergisticsinc.com)
Tesa Entry System (www.tesalocks.com)
Persona/VingCard/Assa Abloy
  (www.vingcard.com)

Campus Card Marketers

Higher One (www.higherone.com)
Quentrix, Inc. (www.quentrix.com)
Student Advantage
  (www.studentadvantage.com)