Maximizing tender options key to upping overall sales
“There is a lot of data and many testimonials to support the idea that accepting debit and credit cards does not cannibalize student card transactions,” says Lawrence. “There is room for both cards because each of them offers its own value. Stored-value or closed-loop cards are not going away any time soon.”
There is a lot of data and many testimonials to support the idea that accepting debit and credit cards does not cannibalize student card transactions.
Campuses do not want some points of sale to accept credit and debit cards, such as low-ticket items like printing and copying, Lawrence adds. “And some campuses do not want to pay credit card interchange and processing fees, which can be as much as 3% per transaction.”
Fred Emery, director of sales for Heartland Campus Solutions, says the recent shift from closed-loop, proprietary readers to include open payment platforms that integrate campus cards with credit and debit cards should not be perceived as a threat to either campuses or campus card vendors.
“From a financial perspective, I’d say it’s six of one, a half dozen of the other,” says Emery. “The trend toward open payments does not hurt our bottom line. We always work to provide the best possible solution to meet the needs of the campus. Open payments allow students greater access and don’t limit visitors on campus.”
Sami Takieddine, director of operations for e-commerce solutions at the CBORD Group, says more and more of their partner campuses say they want both payment options. CBORD’s vending readers can now accommodate both models.
But there’s still a strong case to be made for closed-loop, declining balance accounts. “CBORD still today sells vending readers that only accept the campus card,” says Takieddine. “Because of concerns over the Payment Card Industry’s (PCI) rigorous security standards for organizations that handle branded credit or debit cards, some campuses steer clear of open loop payments.”
Takieddine says he has seen a recent resurgence in closed-loop campus cards as colleges and universities realize the transaction costs associated with credit and debit cards. “Some schools did the math and began putting more effort into encouraging their community to remain in the closed loop,” he says. “Some campuses thought they would make more money by opening transactions up to credit and debit cards, but many are realizing the fees are costing them money.”
The closed-loop versus open-loop argument continues, and the hybrid approach seems likely to prevail for the foreseeable future.
“If you ask the students about closed-loop versus open-loop payments, they’re likely to say they like open-loop,” Takieddine says. “But if you ask campus administrators, they’re likely to say closed-loop.”