Is the declining balance option for the campus card dead? That’s a question we hear sometimes from campus administrators. As campus card systems grew in popularity over the last 30 years, an important feature of the system was the declining balance account, the “payment option” for the campus card user. Students used their account to make purchases around campus and, additionally, as part of a college’s off-campus merchant program.
But over the last ten years, an increasing number of students have arrived on campus with their own bank-issued debit cards in hand. The students have their Visa/MasterCard/Discover debit cards because they can use them anywhere for any purchases, even small ones. In a recent study by Creditcard.com, over 51% of millennials prefer to use cards instead of cash for purchases under $5. What’s more, the student’s debit card is often linked to the parent’s account. When a frantic student calls home in need of funds, mom can use her bank’s mobile app to transfer $50 in a matter of seconds.
In our own user community, we have seen a decline in off-campus program participation. Students just want to use their everyday debit card. As a result, some of our clients are choosing to discontinue their off-campus program. More and more, colleges are working with their vending and laundry partners to install card readers that accept debit and credit cards. They find that when they accept bank-issued cards in addition to the campus card, revenue goes up.
Does all this mean that the campus card declining balance account is dead? Absolutely not! In fact, the idea that more and more people are embracing payment cards should be considered good news. As the aphorism goes, “A rising tide lifts all boats.” But the campus card IS changing. The declining balance account is no longer the only way to buy things around campus. It’s part of an overall campus payments environment that includes debit cards, credit cards, and cash.
Yes, campus cards have competition as a payment method. But they also have, or can have, competitive advantages that other debit cards cannot offer. Students like the convenience of a single card for credentials, access, AND payments, especially if the “card” can be their smartphone. Many parents like the idea of a limited-use payment card so Johnny can’t use their hard-earned money to buy beer or cigarettes. This feature is important to parents during the recruitment process. Also, many campuses want to limit the places where bank cards are accepted to avoid the hassles of managing PCI compliance in out-of-the-way places such as laundry rooms.
Unfortunately, campus card features on most campuses are driven by large, complex, and standalone systems. They aren’t integrated with other major campus systems. What we need to do now is unify campus card systems with ERP platforms and other major applications to increase their utility and functionality. In other words, we need to treat campus cards as an integral part of the larger campus ecosystem for both permissions and payments. Campus card systems long have been a cornerstone for positive student experiences on campus and should play a more significant role in the student success formula as we move forward.