The ETH-card also a credit card?
“Pay with the ETH card / student ID” is an issue that keeps recurring periodically.
Recently, there was a related article in Polykum (German) (“Die Schande der Mensa“, Nr. 4, 2013/2014, page 37) and currently the possibility of using the ETH card as credit card is being considered on behalf of the Catering Commission. The reason for all this is the hope that card payment at especially equipped cafeterias will expedite the checkout process and reduce waiting times at the cash.
The card is only one element of a payment system
Construction and operation of a payment system requires additional components besides the card as well as an active administration. Enterprise cards can be used as payment in so-called closed systems (in our case within the ETH Zurich) only.
Closed payment system – what does this mean?
A closed system uses its own currency (let’s call them “ETH -francs”) for transactions. Conversion of real money into “ETH-francs” takes place at charging stations. The card or more precisely the card carrier’s account is credited with cash. The account can be kept in a database or on the card itself. At payment, the corresponding amount is charged to the account of the card owner while the recipient receives equivalent credit.
Since the recipient cannot use “ETH -francs” outside the system, he must periodically convert them into real money. This is usually done by reimbursement via a postal or bank account. The required real money comes from the charging stations.
Clearing and its costs
The cash flow strategy outlined here is called clearing. The operating costs for emptying charging stations, creating accounts, infrastructure maintenance, controlling and safety measures are significant and must obviously be compensated.
Why are the IT Services skeptical of an ETH specific solution?
The operating costs mentioned above are one reason why the IT Services (ITS) are wary of this solution. Conversion of cash registers and running the entire merchandise management with all its related logistics (maintenance of item stocks, rebates and value added tax, etc.) on an ETH system are additional factors which make this kind of solution less attractive.
Accelerated Payment Processing – the better way
Accelerated payment of small or infinitesimal amounts (without PIN-code entry or signature) is currently possible by means of standard contactless readable credit or debit cards. A broad application of this payment method would probably reduce cafeteria queues to a similar extent as the use of student ID cards. In addition, the trend towards use of mobile phones (“mobile payment”) is growing rapidly.
Conclusion
Our skepticism regarding use of the ETH card as means of payment is based less on technical but rather on organizational issues. Shall the ETH assume bank functions? Given the developments cited above and the fact that the public payment system “CASH – Pay the easy way” (with several million card carriers) has been discontinued late 2013 due to lack of profitability, we tend to say “No” to this solution.
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