Debit Volume Grows with Link to College ID Cards

Article excerpt

As students head back to school, more colleges and universities are introducing school identification cards that are linked to both open- and closed-loop debit networks.

Slippery Rock University and Truman State University have both installed such combination systems this summer for students, faculty, and staff.

Last year, open-loop cards associated with colleges and universities accounted for $400 million of transactions, and closed-loop cards accounted for $13.6 billion, according to Tim Sloane, the director of debit advisory service at Mercator Advisory Group in Waltham, Mass.

Transaction volumes for both card types have been rising at colleges and universities in recent years as more schools adopt the cards, he said.

About 80% of colleges and universities use some form of closed-loop card, he estimated; only a few have open-loop cards.

Slippery Rock University in Slippery Rock, Pa., worked with Heartland Payment Systems Inc., a Princeton, N.J., payment processor, and Central National Bank and Trust in Enid, Okla., to issue its roughly 9,500 students, faculty, and staff the contactless identification cards linked to a PIN-based, FDIC-insured prepaid account called Rock Dollars.

The system combines cards with adhesive electronic tags that can be placed on cell phones or other items, said Rita Abent, a university spokeswoman. With the electronic tags, cell phones can be used as payment devices.

The Rock Dollars accounts can be loaded through direct deposit of checks, at an on-campus automated teller machine, or by transferring funds online, Ms. Abent said, and users can view their balances online.

Truman State University in Kirksville, Mo., began issuing the identification cards to its 6,500 students, faculty, and staff in July. The cards also function as PIN debit cards if students choose to open an account with U.S. Bancorp and activate the cards' debit capabilities. U.S. Bancorp provides the banking technology, and the university distributes the cards.

At both universities, students who elect not to activate their cards' debit features can still use them for on-campus identification, building access, and checking out library books.

Truman State's open-loop, Visa U.S.A.-branded debit cards also can be used at all ATMs and merchants that accept Interlink, but Slippery Rock's prepaid account debits are only accepted at on-campus merchants, vending machines and ATMs, and at certain off-campus merchants that work with Heartland Payment Systems to accept Rock Dollars. …