School-ID Debit Said to Bolster Off-Campus Sales
Boyer, Meghan, American Banker
Adding debit card capabilities to student identification cards can boost sales at local merchants, according to Off-Campus Advantage LLC, an Ithaca, N.Y., company that offers closed-loop, signature-debit systems for campuses.
Shawn McCarthy, a managing director at Off-Campus Advantage, said his company's card system combines purchasing capabilities and university identification functions.
Students at participating schools can use the cards at off-campus stores and restaurants that sign up with Off-Campus Advantage.
In 2006 purchases on open-loop Visa Inc. and MasterCard Inc. cards linked to comparable campus systems totaled $400 million, but closed-loop card purchases were $13.6 billion, according to Tim Sloane, director of debit advisory service at Mercator Advisory Group in Waltham, Mass.
Mr. Sloane estimated that about 80% of U.S. colleges and universities use closed-loop cards that let students make purchases at some retailers. A small percentage of schools use open-loop cards.
Closed-loop systems work only at participating merchants; open-loop cards typically carry the logo of one of the major card brands and can be used at any merchant that accepts that brand.
Off-Campus Advantage cards are linked to accounts held by the educational institution. Students can load funds into a discretionary spending account for use on and off campus, said Mr. McCarthy, who also is president of wide-area commerce at Off-Campus Advantage's parent company, Cbord Group Inc.
Schools must use Cbord Group's campus cashless system in order to use the Off-Campus Advantage merchant system; Cbord processes the transactions.
Western Kentucky University in Bowling Green began permitting local merchants to accept student ID cards for purchases in August, and Sherry Blanton, the university's identification-center manager, said deposits in student accounts for discretionary spending were up 26. …