Mississippi State students using the MoneyMate service may have noticed that some of their favorite off-campus restaurants have recently stopped using the prepaid card system.Students have traditionally been encouraged to use MoneyMate, which has been in existence on campus since the mid 1980s.
In 2002, the MSU Student Association successfully campaigned to have the prepaid card system expanded to off-campus restaurants and businesses. Before 2002, students could only use MoneyMate on-campus.
Recently, local restaurants have discontinued MoneyMate as a form of payment.
Senior Ryan Esrael said he believes he is one of few people left on campus who actually uses the MoneyMate system.
Esrael, who came to MSU in 2004, said he remembers the days when a student who used MoneyMate instead of cash or credit had a variety of off-campus dining options.
“Not anymore,” Esrael said. “Only a handful of restaurants will accept it these days, and it seems like every fall when I get back to school a few more places have stopped taking MoneyMate. Since the Union has been closed, it’s really tough to use the MoneyMate system.”
Popular food destinations like Stromboli’s and Bulldog Deli are among the long list of restaurants that have decided to drop the MoneyMate system in recent years.
Stromboli’s owner Tim Turman said the restaurant stopped accepting MoneyMate because rising food costs called for changes.
“I started taking MoneyMate in 2004 because I felt like it would be an incentive for students to come in, and it was,” he said. “But with rising food costs due to rising fuel costs, in order to stay competitive, you have to make some changes.”
Turman said businesses that accept MoneyMate as payment lose almost 20 percent of the purchase price to three separate taxes.
On top of a 7 percent state sales tax and a 2 percent city of Starkville restaurant tax, an additional 10 percent of all MoneyMate purchases go to the MoneyMate parent company, Blackboard Inc, he said.
Blackboard Inc. provides MSU with its MoneyMate services.
Any business that agrees to accept the student oriented service is subject to a 10 percent tax on all MoneyMate purchases.
“I’ve lost some business because I stopped taking MoneyMate, but when it all adds up you have to make the decisions that will keep you in business,” Turman said.
Similarly, Bulldog Deli has stopped accepting MoneyMate, even though the restaurant was a supporter of the system.
David Greenhaw, assistant manager for Bulldog Deli, said the deli was one of MoneyMate’s biggest supporters.
“Our management tried to contact the university to see if anything could be done to fix the problem,” he said. “The university referred him to Blackboard, and Blackboard referred him to the university, so we discontinued the service.”
Mike Rackley, head of Information Technology Services at MSU, explained Blackboard’s business relationship with the
university.
“When MSU decided to take the MoneyMate system off-campus in 2002, Blackboard was hired by the university to operate the system,” Rackley said.
MSU currently pays Blackboard Inc. $5,000 a year for its services and does make a small profit from the card system, he said.
“Blackboard makes 8 percent from every purchase. Of that 8 percent MSU gets a 35 percent share,” Rackley said. “It’s not much; our total revenue last year was about $8,000.”
When the system went off campus in 2002, 20 to 22 restaurants accepted MoneyMate, he said. In 2007, the number is still the same, just with different restaurants.
Rackley said the number of students who use MoneyMate on campus is drastically different then the amount who use it off campus, which could account for part of the problem.
“In ’05, 10,636 people used MoneyMate on campus while 2,233 used MoneyMate off campus,” he said. “In ’06 the numbers were 10,383 and 2,318. For 07′ the numbers are tracking about the same.”
Blackboard wants the MoneyMate system to be successful, Rackley said.
“We have had a lot of businesses get out, but a lot of new ones have come on,” he said. “Of course you hate to lose popular eateries like Stromboli’s and Bulldog Deli.”
Rackley said any decision to lower the 8 percent cost for local businesses would have to be a collaborative decision between the university and Blackboard Inc.
“Both MSU and Blackboard would have to be in on that decision, but if they lowered that percent they would stand to lose money.