Back to the Basics of Accepting Payments on Campus

When you think about the payment ecosystem on a college campus, it truly is complex. Beyond the high-value transaction of tuition and fees, students, parents, alumni, visitors, and even staff are also regularly paying for campus goods and services at a variety of merchants and locations. Transactions occur across campus at the bookstore, cafeteria, parking, ticketing, continuing education, and more, using numerous payment methods.

Designing your payment ecosystem on campus can be difficult. Institutions want to meet the expectations of students, parents, alumni, and visitors, while providing a smooth, secure payment experience. The first step is understanding the payment ecosystem and common payment terms.

Payment Ecosystem

A typical campus consists of numerous merchants who accept a variety of payment methods, using multiple payment channels, from varied locations. All of these factors make it challenging to meet student, parent, and visitor expectations. Let’s break down the campus payment ecosystem:

• Payment Methods: The ways merchants can accept payment from customers, including cash, check, credit cards, digital wallets, direct debit, Zelle, PayPal, etc.
• Payment Channels: The way merchants accept and verify payment from banks or other financial institutions. This includes online, over the phone, in person, or through the mail. Payment channels often require specific equipment or payment applications.
• Payment Locations: This is where payments are accepted on campus, including the business office, retail locations, or other departments, organizations, and clubs.

Common Payment Terms

There are a lot of different players in the payment settlement flow, and the terminology can be confusing. To help, we’ve defined the most common payment terms you should be familiar with:

• Merchant: Any entity that accepts payments in exchange for goods or services.
• Merchant Identification Number (MID): A particular account number assigned by a processor or merchant services provider.
• Acquirer: A bank or financial institution that processes payments on behalf of a merchant.
• Issuer: The account holder’s bank, which is responsible for paying the acquirer (and subsequently the merchant) for approved transactions and collecting payment from account holders.
• Payment Processor: A third party that manages the transaction process by acting as the mediator between the merchant and the financial institutions involved.
• Payment Gateway: A technology platform used to securely transfer payment information from the merchant to the acquirer.
• Authorization: A process through which the amount to be paid on a payment method is verified.
• Settlement: The process by which the acquirer and issuing banks exchange financial data and value resulting from sales transactions, cash disbursements, and merchandise credits.
• PCI Compliance: Requirements outlined by The Payment Card Industry Data Security Standard (PCI DSS) and designed to ensure that all companies that process, store, or transmit credit card information maintain a secure environment.
• Point-to-Point Encryption (P2PE): A technology standard created to secure electronic financial transactions by encrypting transaction data from the time the data is entered to the point it is received by the payment processor.
• Tokenization: The process of exchanging sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.
• Digital Wallet: A financial transaction application that runs on any connected device and securely stores your payment information and passwords in the cloud. A mobile wallet is a subset of digital wallets and is used to pay for purchases via a mobile device.

Next Steps

There’s more to payments than what we have time to cover here. If you’re new to the business office or need a payments refresher, watch our on demand webinar, The Basics: Student Finance.