Canadian School Dumps Credit, Adds Debit to Pay for Tuitions

  University of British Columbia students can pay their tuition by having their bank accounts debited through a Web site set up by the Interac Association, Canada's debit network.
  University officials signed the debit agreement with Interac after ending a five-year policy allowing Canadian-born students to pay their tuition with credit cards. Foreign or international students may still use credit cards to pay their tuitions.
  The Vancouver, British Columbia-based university stopped accepting credit cards in June because the school ultimately was paying millions in interchange to issuers that it could not afford, says Brian Silzer, associate vice president of enrollment services and registrar.
  "We think we dodged a bullet. With the Web site, we no longer pay interchange," Silzer says.
  Instead, the university will pay Interac an undisclosed flat fee for each transaction through the school's merchant acquirer, Victoria, British Columbia-based Beanstream Internet Commerce Inc.
  Last year, Beanstream became one of Canada's first payment providers to offer Interac Online to Canadian merchants.
  With Interac, a student logs onto Interaconline.com and selects a payment option for paying tuition, such as from an online bank account. The student then types in the university's name, the invoice number and payment amount.
  Next, the student selects his or her bank. RBC Royal Bank of Canada, Scotiabank and TD Canada Trust so far are the only participants. BMO Financial Group (Bank of Montreal) is expected to join in late November, says Barry Campbell, Interac director of business development.
  The student enters his or her debit card identification number and debit card password, confirms the payment information and sends the payment.
  The Web site has been a success, Campbell says. Though he would not disclose specific data, Campbell says the highest dollar volume in Interac Online's three-year history occurred on July 18, the second day the Web site was available to the university's students.
  The site is operational at all times. There is a C$5,000 (US$4,734) payment limit.
  Interac signed the university as a client a year after establishing a flat fee for online payments for universities and government agencies, Campbell says.
  "Interac Online provides consumers with the flexibility to pay for purchases made over the Internet through a direct debit to their bank account," says Chris Koide, Beanstream's chief operating officer. "This method gives merchants access to a larger pool of potential customers who either do not possess a credit card or are looking for innovative payment alternatives."
  Beanstream pays Emergis Inc., a Montreal-based Interac member, to provide gateway services and to authorize and settle the university's transactions, Campbell says.
  Emergis pays an undisclosed fee to Acxsys Corp., owner of InteracOnline.
  University officials signed a contract with Interac after determining the cost of accepting credit cards was expensive and getting more so, Silzer says.
  "We were paying C$2.5 million annually in interchange, and the cost was projected to go even higher," Silzer says.
  The university will spend the money saved from not paying credit card interchange on educational programs for its graduate and undergraduate students housed on campuses in Vancouver and Kelowna, British Columbia.
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