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The power of plastic: a key forecaster shares his vision for the campus card. Are you ready for the changes? (Trend report: campus cards).

Now that colleges and universities are tying cards to Web pages that track on- and off-campus purchases, the campus ID card is becoming an e-card, says campus card analyst Bob Huber. He should know: As president of Robert Huber Associates, and primary resource for the company's related Web site, allcampuscard.com, he tracks card use and new applications. His current forecast covers the following trends to watch:

The industry is experiencing a new wave of vendor turnover, says Huber. There are at least several dozen card vendors in a field that, just a decade ago, consisted of three major suppliers. The majority of these vendors have introduced new systems during the past two to three years. The number of options is "dizzying," he says, adding that he expects more companies to follow the lead of CyberMark (www.cybermark.com), a chip card company that is handing off its higher education business to ITC Systems (www.itcsystems.com). More ID card vendors will either merge or exit the higher ed industry altogether in the coming months, adds Huber, which is why administrators have to grill vendors about long-term plans and how they are building their systems. This may prevent the initiation of a relationship doomed to fail.

There'll be more "system shopping" as vendors set higher prices. It is especially important to analyze maintenance costs, says Huber; they may soon cost more. Currently, in the card industry, annual maintenance costs usually amount to 15 percent of the value of a system. But the percentage is rising dramatically for some card clients. Blackboard clients told University Business that they are already seeing maintenance cost increases. The University of Delaware, which has been paying Blackboard $23,500 annually for maintenance on its ID card system (approximately 425 readers) will be paying twice or even three times its usual annual ante this year, says Earl Davis, coordinator of the university's card system. "Blackboard explained in writing that the company must increase maintenance costs because it needs to spend more on R&D of the ID card products," he says. Blackboard purchased its campus ID card system from AT&T just two years ago, and management says it is just now bringing maintenance costs in line with where they should have been, prior to the acquisition of the business from AT&T. Still, says Huber, Blackboard clients are experiencing sticker shock.

More schools will consider "self-maintenance" for cost savings. Duke University in North Carolina (purveyor of the DukeCard) and Indiana's Purdue University (which issues the OneCard) are two schools already maintaining some of their own campus-card readers, Huber reports. Schools of this size are supporting 100 to 200 system-wide card readers for security access, vending machine sales, and other applications. "They buy some readers and install them themselves, but pay the vendor to teach them how to fix the technology," he discloses. At one time, says the analyst, vendors fought this trend because they only saw the downside: less revenue coming in from service contracts. But, he points out, they've since realized they can reduce the size of their own maintenance staffs or outside contractors by helping campus clients become more independent.

Campus-card deposits via the Web will explode. Now that students and their parents are comfortable with online banking, they're requesting some type of electronic relationship to the campus card system, says Huber. Several schools, he says, have blazed the trail for the e-card, which allows students to move money online from a traditional bank account into a campus-card account. Quinnipiac University (Hamden, CT) has just such a setup for its Q-Card, through www.qcardonline.com. Via the link (added to the campus-card system earlier this year), parents can make deposits to campus-card accounts, and students can review their spending activity and balances. Quinnipiac has seen a marked decrease in foot traffic at the bursar's office, says John Meriano, director of Administrative Services at the school. Now, students make only about 200 in-person deposits monthly at the bursar's office, while about 5,000 to 6,000 transactions are made each month online and at a kiosk on campus known as a "value transfer station." "At certain times of the year, there was a line out the door at the bursar's office," recalls Meriano. "At the beginning of each semester, for instance, students would be cramming money into accounts to cover book fees and other costs." Those student queues have since evaporated, he says.

Emory University (Atlanta) and Skidmore College (NY) have recently set up similar Web sites that serve campus card users, says Huber. But the proliferation of the campus e-card won't drive any sort of trend to turn the campus ID card into a true banking ATM card, he says.

Peter Livingston, chairman of Stark/livingston, higher ed consultants (www.starklivingston.com), cautions that some schools have been there, done that, and haven't realized great gains. Bank names and policies change too quickly to allow for large numbers of IHEs to keep track of them, he explains, adding that years back, certain national banks and local credit unions entered partnerships with campus-card programs, then changed their minds about linking accounts to campus-card accounts. Those institutions balked at serving the student accounts, which tend to be maintained at lower balances than other accounts. The about-face only created logistical headaches for card administrators, he says.

It's wiser to market the campus card and what it can do. Students have a lot on their minds, which is why they need reminding that their campus card is good for buying books at the bookstore, or a pizza at the fast-food vendor on campus, says Huber. More card administrators are following the lead of schools such as Ohio State, which advertises the benefits of its campus card in college newspaper ads and in promotional brochures available at information tables in the student union.

There's revenue in those transactions. With more card activity comes more account deposits, which means more revenue for the campus-card program. Huber points out that a card program can earn interest--albeit modest interest--on the money parents and students deposit into a program's interest-bearing general-ledger bank account. (These are the funds students draw on when they use their campus cards.)

But there's other revenue to be realized in transaction costs, the analyst says. Local merchants who accept the campus ID card for payment should pay commission to the school for the sale. Duke University, for one, has arranged for 15 commercial vendors to accept its campus card for payment. Students can use the card at the campus McDonald's, but can also use it to pay for food delivery from the Domino's Pizza and Subway. Each sale yields a 20 percent commission to Duke's Auxiliary Service Office. With annual pizza and sub deliveries totaling $1.9 million, commission revenues could add up to $380,000, say school officials.

The campus ID cord will be used to open more doors. Administrators are understandably far more conscious of campus security than they were a year ago. They are paying much more attention to who gets in and out of administration buildings, which means that a student's campus ID card may be used for daily access to many more places than just a residence hall, predicts Huber. More campuses are expected to install electronic access readers at campus library entrances, student unions, and recreation centers, he says.

Wireless apps will emerge. So far, there's talk about wireless apps, but nothing concrete, says Huber. Still, the day may be coming when schools install wireless devices to help with micro-security issues. Students, for example, might gain entrance to their dorm rooms by swiping a card that's read by a wireless reader located on the same floor. Access to the campus bus system might be set up in the same way, with a swipe that's read by a wireless device placed on the bus.

The magnetic-stripe cord remains king of the campus, at least for now. Its popularity is driven by economic realities, says Huber, for it remains cheaper to produce than a chip card (a.k.a "smart card"). Sure, chip cards with student data stored within can lessen the burden on a campus-card system and may help reduce administrative costs, says the analyst, but the cost to produce a chip card is still about $7 versus 75 cents for the mag card, says Huber; that's why the mag card's still king.

CAMPUS-CARD VENDORS BY APPLICATION TYPE
Multi-application card systems
Blackboard Inc. (www.blackboard.com)
CBORD Group (www.cbord.com)
Diebold Systems (www.diebold.com)
General Meters Corporation (www.1card.com)
NPD & Associates/NuVision (www.collegeid.com)

Multi-function card access systems, for vending
machines or security access
Debitek/Ingenico (www.debitek.com)
Digital Access Control (www.dacinc.com)
ITC Systems (www.itcsvstems.com)
SchlumbergerSema (www.slb.com)

Single-function card access systems, security
American Magnetics (www.magstripe.com)
Andover Controls (www.andovercontrols.com)
Best Access Systems (www.bestaccess.com)
Casio-Rusco/GE (www.casi-rusco.com)
Diebold Security (www.diebold.com)
Honeywell/GE (www.honeywell.com)
Identicard (www.indenticard.com)
Kaba-Ilco (www.kaba-ilco.com)
Locknetics/Ingersoll-Rand (www.locknetics.com)
Mosler/Diebold (www.mosler.com)
Sensormamtic/Tyco (www.sensormatic.com)
Simplex/Grinnell (www.simplexgrinnell.com)
Synergistics (www.synergisticsinc.com)
Tesa Entry Systems (www.tesalocks.com)
VingCard (www.vingcard.com)

Source: Robert Huber Associates
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Author:Angelo, Jean Marie
Publication:University Business
Date:Jul 1, 2002
Words:1547
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