Blackboard Inc. and PE Systems LLC have formed a partnership to help colleges and universities seeks ways to reduce their costs to accept credit and debit card payments, Washington, D.C.-based Blackboard announced Nov. 15.
Under the agreement, Blackboard will refer its Blackboard Transact users to PE Systems, a Spokane, Wash.-based payment-processing consultancy. PE Systems also will refer schools to Blackboard that need to “add, augment or replace current gateway and payment ecosystems within current campuswide systems,” Robert Skattum, PE Systems chief operating officer, tells PaymentsSource.
Blackboard Transact enables colleges and universities to facilitate identification card issuance, on-campus, off-campus and online commerce and cashless payment processing for dining areas, bookstores, vending machines, laundry, copy and print services and parking services.
It also enables the schools to monitor all campus activity through an integrated door access control, video surveillance and mass-notification capabilities such as campus-wide e-mails.
PE Systems uses an automated analytical process to analyze and fees associated with payment card acceptance, especially interchange, which represents the major portion of costs for schools accepting card payments, Joe Bizzarro, CEO of PE Systems, tells PaymentsSource.
Acquirers pay interchange to card issuers and pass the expense along to their merchant customers as part of the discount rate, which also includes other costs associated with card acceptance, such as processing and other fees.
PE Systems works with the schools “to identify, evaluate and propose cost-reduction opportunities,” using historical payment-processing data and details from their processing statements, Skattum explains. It then produces recommendations on ways to reduce card-acceptance costs, Skattum says.
Cost-saving opportunities may include better interchange management, corrections to the school’s industry classification, corrections to the level of data being collected and submitted, software changes or upgrades, and process and procedural changes, he says.
PE Systems charges schools on a pay-for-performance basis, Skattum says. If the company’s recommendations do not result in reduced costs, the school pays nothing.
The option for colleges and universities to lower card-processing costs is especially important in today’s economic environment because most schools do not get as much funding from the government, Bill McCracken, CEO of Atlanta-based financial-services research firm Synergistics Research Corp., tells PaymentsSource.
Additionally, many schools lose money when students pay their tuition using a credit card, Adil Moussa, an analyst for Boston-based Aite Group LLC, tells PaymentsSource.
Typically, “a credit card payment costs a school about 2%, which multiplied by the thousands of students paying by card ends up becoming a heavy expensive for the school,” Moussa explains.
However, working with a consultant may help identify areas where the school can save money, McCracken contends.
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