FOCUS: Cash or credit?

The University is developing a debit card system that could make carrying cash a distant memory Using the PennCard for laundry, vending and copy machines may seem like a foreign concept for University students. But a "cashless campus" centered around the PennCard may become a reality in the near future. The idea of bringing a debit card system to campus especially appeals to those students with security concerns about carrying more than a few dollars in their pockets in the West Philadelphia area. This was part of the motivation for the initial idea behind the PennCard debit system, which was first proposed six years ago. The debit card would allow students to make purchases on and off campus using their PennCards. And after many recent negotiations, it looks as though the first phase of this project could begin in the fall. The debit card plan would allow students to put money on their PennCards at the beginning of the year and subtract purchases from the total. The University is slated to have at least six buildings hooked up to an on-line computer debit system by next fall, affording students access to vending and laundry machines, Penn Student Agencies commissaries and copy machines. This first step will include Steinberg-Dietrich Hall, Vance Hall, Graduate Towers A and B, Van Pelt Library and the Law Library. n A committee of 43 students and faculty members, headed by Vice President of Finance Frank Claus, initially explored the debit card idea in 1990 while discussing other improvements to University services and programs. In 1991, four Undergraduate Assembly leaders and three Penn administrators visited Duke University to examine its advanced debit and security card system. That system has been a major influence on the development of a debit card project at Penn. Duke's system is linked by computer to the dining facilities, residences, vending machines and off-campus merchants, freeing students from carrying virtually any cash on campus -- and boosting campus security. According to Duke junior Jason Goode, the Duke card has two different systems built into it, one for food services and another called the "Flex" account, which links laundry machines, copy machines, the Duke bookstore and on-campus retailers to the system. Using the Flex system also allows students to order from the local Subway, Domino's Pizza and Pizza Hut and put the purchase on their Duke cards, Goode said. He added that students may also purchase alcohol at on-campus restaurants on the system. Goode credits Duke's Flex debit system as being "the most flexible and easiest to use out of all the other systems I've seen at other universities." "It basically eliminates the need to carry any cash on campus," he said. But several obstacles have prevented Penn from proceeding more quickly on the installation of a similar system, including safety and cost issues. The University is working on measures to implement a debit card system at the lowest possible cost, according to Director of Student Financial Services Operations John De Long. Security measures must also be considered for the new cash card system. The University has decided to install an on-line computer debit system as opposed to an off-line system to ensure security. The on-line debit system will eventually include machines in buildings across campus, wiring them into a University computer system, which will enhance the security of the card. The PennCards themselves will have no real value and therefore should not be a target of theft, according to De Long. If a student loses his or her card, the money on the card will not be lost, as it would be with an off-line computer system. "It will cost a little more and take a bit longer to install, but the safety benefits are worth it," De Long said, adding that the Penn system will be more complex than Duke's. De Long's department is also in the process of recruiting vendors who will allow students to pay with their PennCards, and thus must be wired into the system. n According to Claus, the Dining Services meal plan set-up has caused other delays for the debit card system. Since Dining Services meals are not a la carte, students must purchase a set number of meals. Many other universities allow students to deposit an unlimited amount of money into their account so they can allocate their meals as they desire. But Claus says that this sort of system is beyond the University's abilities. Chats and The Book Store already employ a system that allows students to charge purchases to their bursar accounts using their PennCards. The Book Store recently lowered its minimum charge requirement from $25 to $10. And at Chats, students also have the option of placing money in a debit account each semester. The University is currently researching the possibility of working out contracts with off-campus retail companies and restaurants that would allow students to pay with their PennCards. But since the University is a non-profit corporation, it must find a financial institution to be the intermediary in the debit card proposal, according to De Long. Federal tax regulations prevent non-profit corporations from holding large deposits of money. The University of Pennsylvania Student Federal Credit Union has expressed interest in working with the University to implement the off-campus debit card system, according to UPSFCU Executive Vice President Jack Basavaiah, an Engineering and Wharton junior. And Engineering and Wharton junior Rajeev Shah, UPSFCU president and CEO, said he believes the credit union -- the largest and oldest student credit union in the country -- has the technology, resources and necessary manpower to implement a successful debit card program. "The only side of the coin we can't compete with in relation to a commercial bank is the advertising," he added. Claus credits UPSFCU as being a "very sound business," adding that he believes a University partnership with the credit union would be very beneficial to the debit card proposal. Three Wharton students have also launched their own project, called "CampusCa$h." Its main focus is the incorporation of local off-campus restaurants, photo-copying stores and retail outlets into a similar system as the one the University is proposing. "Right now, security is our biggest issue," said 1995 Wharton graduate and co-founder of the Creative Software Company Michael Agha. "The restaurants don't want to attract crime by staying open late and the system with which students will pay must also be secure." Keeping costs low is also a priority of the group, said Engineering and Wharton senior Raja Gupta. "Our goal is to find a program that would allocate the best benefits to students and would be as costless to the community as possible," he added. Wharton senior Scott Kurland said that in the interim, the group's development will depend on how quickly and inexpensively a debit card system can be installed. n Students have responded favorably to the debit card proposal so far, citing everything from the practicality of using PennCards for purchases to the safety in carrying less cash. College sophomore Melissa Freiling said she thought it was a great idea. "It'll be especially useful for photo-copy machines, since I often forget my copy card -- and we always have to carry our PennCards anyway," she said. Wharton freshman Bradley Coburn said he is familiar with many other colleges that used the system. "It's much more convenient and safe not having to carry a lot of money around," he added. And Wharton junior Terrance Mendez said the debit card is much better than dealing with the constant search for quarters, adding that it will also serve as a very convenient method of payment at the commissaries. Claus said that despite the fact the debit card has been discussed for more than five years, he believes the University's plan is moving "very fast." "Phase one is already in motion and students will be able to start reaping the benefits of the debit system by next fall," he said. And according to De Long, Student Financial Services will soon start planning for the next phase, which will wire another group of buildings into the system, including the dormitories and higher-volume buildings.