At any given time, about 40,000 people have a cash balance on their BuckID. With that much money floating around, one might expect most campus businesses to accept the card. But for at least one merchant, the cost seems to outweigh the benefits.
“It’s always surprised me that McDonald’s doesn’t accept BuckID,” said Andrew Heaton, a junior in human resources. “They’re the only restaurant near campus I know of that won’t take it.”
David Anthony, director of BuckID services at Ohio State, says McDonald’s refusal to accept the card is a reflection on their management.
“The McDonald’s on High Street accepted it for a period of time back in the very beginning of the program, then that restaurant changed ownership and the new ownership said they weren’t concerned about convenience for students and that they felt they had the market locked.”
Anthony said that choice is a mistake
“A direct competitor of McDonald’s, Wendy’s, has several locations and they all do very well.”
One manager of a popular Ohio State restaurant agrees with Anthony’s assessment.
“We’re on a campus, and accepting the card attracts a lot of business from students and the interchange rate is fair. The BuckID office is very good at their job,” said Joe Santatitca, general manager of Raising Cane’s on High Street.
Off-campus merchants began accepting BuckID in 1994, and since then Ohio State has kept the same interchange rate for those who wish to accept the card.
Interchange rates describe the percentage fee that the merchant pays a customer’s bank when a purchase is made with a card. In the case of the BuckID, the bank is OSU and the interchange rate is 4 percent.
Anthony insists that this rate is more than fair.
“Four percent is very comparable to what merchants pay to accept Visa or MasterCard or any other credit card,” he said. “Compared to comparable programs at other universities, we’re on the low end of what campus card programs charge merchants. There are many universities that have extremely high rates.”
According to each company’s Web site, Visa and MasterCard’s current interchange rate for restaurants accepting their debit card is 1.19 percent, less than one-third of what OSU charges.
Anthony defends the disparity by pointing out that while Visa or MasterCard can spread their expenses over hundreds of thousands of merchants around the world, OSU’s pool is considerably smaller.
OSU has over 250 off-campus merchants, less than Visa or MasterCard, but still the largest of any college card program in the country. Anthony points to their relationship with these merchants as proof of the BuckID’s value.
“The best evidence is the long-term relationships that we’ve had with merchants,” he said. “We don’t see merchants stop taking BuckID once they start. So I think that speaks values about the extra business that they receive from OSU students.”
McDonald’s management declined to comment and attempts to reach a national representative were unsuccessful.
Richard Oviatt can be reached at [email protected].
