Handy Cash on Campus

College and university students almost always need cash. And when they do, they want to obtain it as easily as possible. That sometimes means a trip to the bank or finding a compatible ATM machine, which isn’t always easy or convenient.

Traditionally, ATM machines on campuses have been operated by banks, which determined both the surcharge fee for using the ATM and the location(s) of the machine in concert with college administrative personnel. The downside for students with this arrangement centered on the surcharge fee and the requirement that they must either have an account at the bank or be a member of the bank’s network. Failure to meet either requirement meant the student was out of luck when it came to obtaining cash.

Like many components of college life, both the availability and operation of ATM machines are changing -- to the benefit of students and business owners.

Here Come the ATMs

An increasing number of ATM providers are entering the market based on advances in equipment and business opportunities. These independent operations may be part of a number of bank and/or other service networks, which means that students are more likely to have access to a network to which they belong. In other words, a student may not have to open a local account; the one at his or her home bank may work perfectly.

Tom Hale, national accounts manager for Euless, Texas-based International Merchant Services, one of the nation’s largest independent ATM providers, notes that the ATM industry saw a major change in the mid-1990s. “The opportunity for independent, rather than bank-operated ATMs, became truly viable when friction-feed ATMs were introduced,”he explains. “Rather than requiring new bills, the friction-feed machine can use old bills, which created a whole new ballgame.”

According to Hale, business owners or an institution now have the option of installing an ATM near the business or college bookstore. “In essence, the ATM becomes another cash register,” says Hale. “The business or higher education operator deposits money from their store into the machine when it needs filling. Since conservative estimates show that 20 percent of the money withdrawn from a nearby ATM goes back into adjacent retail operations, it’s a winning situation for the student and the business operator -- more purchases.”

Who Does What?

Hale notes that, when considering the installation of an independently, nonbank-operated ATM, there are several factors to consider -- all related to service and/or cost.

One option is for the college or university to lease the machine and to load it with money whenever necessary. Someone from the university, usually from the business office or the institution’s bookstore, loads the machine and tracks the amount deposited; machine maintenance is handled by the ATM provider.

The second scenario involves operation by an outside entity, such as the ATM provider. But certain factors may make this option less attractive. Most ATM providers have a predetermined estimate of ATM users that will result from the projected traffic flow. If the estimated traffic is below the amount required for the ATM’s operation and/or to make a profit, the ATM provider may decline to install the machine. Even if they do, the cost of having the ATM company supervise, load and service the machine may make this option unattractive.

“Higher education institutions and businesses located on their campuses will achieve the highest amount of profitability and availability when an individual on-site loads the machine, and when an independent ATM provider is responsible for all service,”Hale states. “As with any business, you want to maximize service and revenue. Minimizing the responsibilities of an outside ATM service provider is the best route to achieve that goal.”

Pay as You Go

Immaculata College, Immaculata, Pa., included the cost for books and other course materials in a student’s tuition payment for many years. When the college elected to drop this cost from tuition, it wanted to provide a cost-effective and efficient way for students to access cash for their purchase. Enter the ATM.

The college opted to lease an ATM machine (they will eventually purchase the device) and install it outside the campus bookstore. “We believed that having our own ATM would provide a greater service to our students, which was our primary goal,”states Eileen Rothrock, executive assistant to Immaculata’s treasurer, Tom Ford. “We can provide our students a higher level of convenience at a lower cost than using a bank’s ATM. And, because of the broad network that we’re connected to, a student is rarely turned down for a withdrawal.”

Immaculata charges a $1 surcharge fee, 50 cents less than the national average of $1.50 per transaction. “Our goal is to break even on the ATM’s operation,”notes Rothrock. “It isn’t about making money, it’s about giving our students another ATM option that is more economical and also convenient.”

Rothrock is in charge of the ATM’s operation, including the loading of cash in the machine. She checks the machine daily and estimates that she deposits $6,000 in $10 bills every week. The college averages 400 transactions per week, with more student users at the start of a semester.

“Our experience with the ATM has been very positive,”Rothrock states. “Loading it is easy, our students are very happy, and Barnes and Noble, the operator of our bookstore, has been pleased.”

Dan Knittle, manager of the Barnes & Noble Immaculata College Store agrees. “We’ve noticed that a number of students will come into the bookstore, find something they want, and then go outside to the ATM to withdraw cash for their purchase,”he says. “If they had to go farther away to obtain cash from an ATM, it’s likely that we would lose a sale. The college’s ATM operation has positively impacted our operation.”