According to Jay Summerall, President of campus card provider and program manager CardSmith, most U.S. colleges and universities already have campus card programs. The programs are designed to incorporate electronic student identification badges with on-campus payments; but if the systems are proprietary to the institutions or administered by the wrong service providers, they can be expensive to operate.
In the case of Southeastern Baptist Theological Seminary (primarily a graduate university dedicated to the study of Christianity and located in Wake Forest, N.C.), a third-party card system vendor was increasing its fees by 10 percent per year, said Wayne Jenks, Director of Information Technologies at SBTS. So it was as a cost cutting measure that the seminary went searching for a new campus card provider.
The school decided on CardSmith, headquartered in Doylestown, Pa., for its software as a service (SaaS) approach to campus card implementations, which minimizes SBTS' involvement in the payment process. By choosing CardSmith, the seminary will potentially save $160,000 a year.
With its old vendor, SBTS was responsible for achieving and maintaining Payment Card Industry (PCI) Data Security Standard (DSS) compliance - a task which costs $100,000 to $150,000 annually, Jenks said. Because CardSmith controls the network and is PCI DSS compliant, "off the top there's that money we're not having to spend," he added.
Jenks expects to see an additional yearly savings of $6,000 to $10,000 using CardSmith's streamlined processes. The main use of the Southeastern 1Card is expected to be for meal service on campus, followed by campus store and library copy center purchases.
The card can also be used at select, off-campus locations, such as gas stations and local restaurants. In this way, SBTS will be able to receive revenue - which CardSmith will share with the seminary through its closed-loop, private-labeled network. Jenks said the previous vendor did not offer such a potential money maker for the college.
CardSmith has been in business five years and has close to 50 high schools and universities in its portfolio. But campus cards have been around since the late 1980s, when institutions developed their own in-house systems, according to Summerall.
"Most schools, believe it or not, have a proprietary card system that they self-operate," he said. "So they have some software, a couple of racks, a little system that somebody on campus administers to make their card do what they want them to do. In our view, that's the legacy way to do this.
"The easier way to do this is to hire CardSmith, and then the school doesn't have to install anything other than terminals at the point of sale. There's no software locally. There's no systems. There's no boxes, no racks. It's a much simpler model."
Colleges using the old method may have three to four staff members dedicated to operating and maintaining the legacy systems, Summerall said, adding that a combined payroll from those staffers could push $500,000 annually. "We can deliver the service a lot more cost effectively than that," he said.
Other labor-intensive practices for colleges center on coin collecting. Campus vending machines for food, beverage and laundry facilities have been historically "very coin oriented," Summerall said. He called coin collection and verification "personnel intensive," with a posse of three people - a coin collector, a monitor of the collector and a campus cop - dispatched to make the campus rounds.
That expensive process is eliminated by the installation of integrated, card-accepting terminals, he said.
Jenks said the 1Card will be issued to approximately 2,500 students. The cards can be loaded and reloaded via www.southeastern1card.com. The site offers cardholders transaction histories and a money transfer capability. A toll-free customer support center run by CardSmith has also been set up.
Viewed from the university's perspective, CardSmith's system provides reporting on how and where the cards are being used. "If you think of [the campus] as an enterprise, you can see, well, this is how much card sales I did in my bookstore, my vending," Summerall said. "You can really see what you're doing.
"You can know if there's any lift. You can measure where you are now versus where you came. It's an integrated view of your enterprise, which you don't have if all those things are not connected by a card system."
According to Summerall, the campus card market is "huge." With approximately 3,600 two- and four-year colleges and universities in the United States, a population of about 15 million students is being served; on top of that are countless high schools throughout the country with enrollments ranging from 500 to 5,000 students, he said.
At the college level, institutions have been slow to migrate to SaaS card systems, Summerall added. The campus card market has its own association, the National Association of Campus Card Users (www.naccu.org), which represents legacy system operators who have a vested interest in not seeing SaaS providers gain traction, he claimed.
Nevertheless, Summerall believes CardSmith offers universities a straightforward and compelling business proposition. "We just go to the business officer and say you want to deliver this service," he said. "There's two ways you can do it, via A or B, and B is newer and it's a heck of a lot cheaper."
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