Paying Online

eCommerce is making tuition payment more convenient for students and parents, while saving schools valuable time and resources.

The Enterprise

IN THE ERA OF DEBIT CARDS and online bills, paying college tuition with an old-fashioned, honest-to-goodness handwritten check is quickly becoming yesterday’s news. The name of the game these days is electronic payment. This technology enables students or parents to immediately pay for tuition directly from a credit card or checking account over the internet, without ever having to pick up a pen. It’s quick. It’s painless. What’s more, it can save schools valuable time and resources processing transactions.

Striving for Efficiencies

Take Pennsylvania State University. There, students had spent years asking for convenient ways to pay for tuition, outreach programs, sports camps, and more. To meet this demand, the school recently set out to implement an advanced credit card payment solution that could integrate with its existing IBM Web- Sphere system. The solution would need to accommodate the various requirements of more than 100 departments. And equally important to Penn State officials: They needed a solution that wouldn’t break the bank.

A standard request for proposals (RFP) process led school administrators to PPI PayMover from integrated payment processing solution provider Payment Processing. The system, simple software that sits on a dedicated server behind the scenes, changed everything virtually overnight. By enabling students to pay online, the system eliminated manual processing, making payments faster, easier, and less of a cost center for the school. PPI PayMover also lowered processing fees, since departments could negotiate rates collectively.

Aaron Hofelt, an eCommerce consultant with the school’s Information Technology Services department, says there have been other benefits, as well—namely benefits to the school’s smart card program. As a result of the PPI PayMover software, the school now offers parents an online payment gateway to easily deposit money on their child’s card. Students can use the smart card to purchase books, meals, event tickets, and incidentals on campus. The cards are also accepted by more than 140 merchants in the surrounding town of State College, PA. “The integration has allowed us to offer an unbelievable level of convenience to parents and students,” says Hofelt, who adds that the school handles between 1,000 and 2,000 transactions a day, and the number of transactions has risen steadily since the electronic payment program began in the late 1990s. “It’s also allowed us to become quicker and better at handling payments, which certainly never hurts.”

Marketing a Winner

Ohio University has also experienced the benefits of ePayments. In the spring of 2005, the school converted its paper bills to the eBill system from CashNet. The new system allows for online payment via credit card or electronic check. Once the switch was made, however, Ohio officials had no idea how to get the word out to students and their parents, to encourage them to try it out. Administrators struggled for weeks to figure out a strategy. Then, it hit them: Advertise during orientation.

Last year, Bursar Sherry Downs teamed up with Assistant Bursars Carole Gilkey and Kimberly Trout to spread the word. The trio hit Ohio’s annual pre-college program and talked to parents and students about managing finances at school. They explained the billing cycle, reviewed payment deadlines, and outlined accepted methods of payment. They also created a short tutorial on the school’s payment venues—in particular, the CashNet system.

The response was overwhelming. The bulk of last year’s incoming freshman class attended the pre-college program during the last week of July and first two weeks of August, and Downs says she spoke to more than 250 families every day. This year, members from the Bursar’s office manned portable kiosks at the event and assisted students in accessing their student information via the university portal. Downs’ crew also showed students and parents how to view bills and make payments. As a result of these efforts, awareness of Ohio’s ePayment capabilities is much improved. “A lot of parents come up to me and their only question is, ‘Now I can do this all online, right?’” says Downs. “When I say, ‘Yes,’ their response is, ‘Good!’ and they walk away.”

eCommerce: What’s New, What’s Next

WE SPOKE WITH John McElroy, a business development manager for TouchNet Information Systems, about the future of ePayment technology, and the changes and challenges schools will face. McElroy is an accredited ACH (automated clearing house) professional (AAP), and brings five years of TouchNet experience and 15 years of electronic payment background to the development of key TouchNet campus commerce offerings.

What’s the latest in ePayment technology on campus? There are two payment topics prevalent on campuses today. First, campuses are now offering “PINless” debit transactions, in which consumers can use their ATM cards for web-initiated payments without entering a personal identification number [PIN]. The cost of processing payments through debit networks [such as Star, Nyce, and Pulse] is lower than through credit networks [such as Visa and MasterCard], and PINless debit offers the same fast settlement time as PIN debit transactions. The second topic is data security. Many schools don’t yet appreciate how much change they will face if they are accepting ePayments on campus.

What’s driving changes in data security? Obviously, there is a desire to protect sensitive payment information in order to satisfy industry and government regulations. There are more levels of control and review today than ever before. The issues of data security are more public, and the expectations for colleges and universities are greater. And industry requirements are growing more stringent and complex.

What d'es the future hold for payment security? The Payment Card Industry [PCI] Data Security Standard, a set of requirements developed by the PCI Security Standards Council [an independent body formed jointly by several major credit card companies], will continue to expand and incorporate all systems that touch ePayment transactions. This expansion includes a new set of Payment Applications Best Practices [currently voluntary guidelines for software vendors to create secure payment applications]. These developing guidelines will coincide with more rigorous audits and reviews from multiple levels, including system and state audits, for all campus merchants. Most campuses will move quickly to consolidate ePayments into one secure, controlled processing environment.

What can schools do now? Institutions should learn about their growing responsibilities, investigate recent changes to the industry’s compliance priorities, and turn to experts for advice and assistance. Industry conferences are also a great place to learn about key campus commerce compliance issues: For instance, TouchNet’s seventh biennial users conference, COMTEC 2006, will be held Nov. 12-15 in Kansas City, MO.

Managing Security Threats

Down the road, as more colleges and universities embrace ePayments, the biggest issue will be security. Already, schools deploying electronic payment solutions have had to redouble their efforts to protect site security and prevent credit card fraud and identity theft. As hackers become more sophisticated, these threats will only escalate. According to the Federal Trade Commission, payment providers should encourage customers to follow all of the following guidelines:

  • Use a secure browser.
  • Check the site’s privacy policy.
  • Read and understand the refund policies.
  • Keep personal information private.
  • Keep records of online transactions.
  • Review monthly credit card and bank statements.

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