Capturing rogues: Why disparate payment points are a problem for higher ed campuses

Within a higher education institution, there are multiple clubs, organizations, and departments — each with the ability to sell something, whether it’s a t-shirt, an event ticket, or a burger. “Rogue payment points” refers to when these various groups take payments in different ways, leading to a lack of transparency, the potential for fraud or mishandling of funds, and a lot of work for campus treasurers.

Oftentimes, these different groups are simply searching for the easiest way to take payments, and unintentionally wind up using multiple unauthorized POS systems. But following the assumed path of least resistance can cost institutions in other ways.

Why do rogue payment points occur on higher ed campuses?

Rogue payment points happen because higher ed institutions have vast and complex campus economies; it can be a challenge to centralize. Just think about it, payments can be made in person, over the phone, online, or through point of sale systems across campus. Then think of all of the different purchases these institutions facilitate: tuition, dining, housing, campus merchandise, parking, and so much more. Without thorough oversight, any one of these payment points could unintentionally stray from the institution’s best practices.

I sat down with Kala Mulder, director of client success at TouchNet, to discuss this issue. Let’s explore our key takeaways and insights, including four specific challenges of rogue payment points.  

Challenge 1: Lack of transparency

The lack of transparency from rogue payments can have dire consequences for higher ed institutions. Club fundraising is one example where a lack of transparency can occur. Students looking for quick and easy ways to raise funds for their organization will opt for a system that is cheap to purchase and quick to implement, like card readers that can connect to their mobile devices. In fact, sometimes a club member already owns a payment system like this and will lend it to the club without realizing the risks associated around compliance and reconciliation for the institution. And how will they transfer the funds they raise to the proper account that is overseen by the college or university?

Sharing more on this example from her time working in higher ed business offices, Kala said, “When a club sponsor would bring a single check to the business office for a deposit, we’d ask questions: What type of fundraising were you doing? Do you know this doesn’t meet protocol? We don’t have the ability to provide oversight in that situation, so at any point in the fundraising process, things can turn sour.”

If you take this situation and multiply it by the number of clubs an institution has, or apply it to other departments within the college or university, it is clear how a lack of transparency can become a massive problem.

Challenge 2: Potential for fraud or mishandling funds

What happens when the bad actors take advantage of a lack of transparency? The institution is vulnerable to theft, fraud, and the mishandling of funds. Without checks and balances across merchant setups, one bad actor can be extremely powerful. 

“There have been instances of employees stealing thousands of dollars from parking ticket money and library fines,” said Kala. “Without the right protections in place, there is nothing to keep bad actors from trying — or succeeding — in stealing from the institution.”

This is why it is important for institutions to have a tight grip on all payment points, a unified view of their transactions, and a straightforward way to facilitate reconciliation. The right technology protects colleges and universities from these bad actors. It can also make the handling of in-person payments more straightforward and centralized, protecting against unintentional human error.

Challenge 3: Compliance issues

Remaining in compliance with local, state, and federal regulations is critical for every institution, and rogue payment points make this a challenge. Kala recommended having a clear compliance process and policy, including a checklist of every payment device on campus. Having a meticulous inventory of existing payment points on campus makes spotting rogues much easier. She also recommended regularly examining POS terminals or devices to ensure the device hasn’t been tampered with.

It’s also critical for business offices to think through worst case scenarios and establish plans for disaster recovery and incident response. Ask yourself, what are the adjacent systems that touch this data? What other accounting systems or inventory systems are being updated, and what's the status of those? That's where the majority of the documentation is for POS compliance questionnaires because that's where a lot of the risk lies.

Challenge 4: More work, more money

Even if there are relatively few rogue payment points on your campus, the problems they pose can be numerous. Think of each unique merchant setup — consisting of a payment point, gateway, processor, and bank account — also as a unique reconciliation setup. If 90% of the campus dollars flow through a consistent setup of merchant systems, but there are three additional, separate, and unique systems that handle the last 10% of campus volume, that last “little bit” can significantly multiply the accounting workload.

Rogue payment points also literally cost your institution money. Transaction fees can be steep — if vendors provide cheap or even free hardware with a fast activation, then to make a profit, they must apply high transaction fees for every dollar accepted. While these fees are part of the cost of running a small business like a food truck, many campus merchants need to work towards better visibility. That can be achieved by using POS systems that tie into existing campus solutions for a more competitive processing rate.

How you can combat rogue payment points on your campus

One of the best ways you can avoid the pitfalls associated with rogue payment points is to implement a unified payments platform that can work for campus organizations and merchants alike. With TouchNet, you can add Genius — Global Payments’ new point of sale system — to your commerce platform approach.

Whether you are in search of a small, handheld device to take quick payments or a full-service POS system, Genius has you covered. Our hardware is built to last and easy to get started, meaning you won’t waste time on implementation or waste money replacing faulty card readers. Enjoy additional savings through lower processing fees and streamline workflows by using a single payment system. With high-levels of security and compliance built in, you can rest easy knowing that the simplicity of your payment ecosystem won’t come at the expense of security.

Interested in learning more? Check out our one-pager or request a demo to see Genius in action.