In July of 2014, the University of Kentucky (Lexington) announced that they would no longer absorb credit card processing fees for payment of tuition and direct educational expenses and would begin charging a convenience fee on all credit and debit card transactions to off set those costs.

The University contracted with VPS to handle credit (and debit card) payments via the online student portal and on-site VPS- supplied POS terminals. UK Student Account Services (SAS) continues to process all check payments internally.

“Moving to a new payment model, we were very sensitive to the effect this would have on parents and students,” says University of Kentucky Director of Treasury & Merchant Card Services, Kevin Sisler. Implementing a high-cost credit card option, in the context of rising tuition rates—that is, rates that rise every year— was something UK was determined to avoid.

“We wanted to be at 2.25%,” says Sisler, a fee arrived at by surveying peer group institutions and other institutions in the state, whose rates ranged significantly above the target 2.25%.

“We evaluated several e-payment processing companies. Although many had great services and were widely used throughout the higher education industry, not one of them was willing to offer a fee less than 2.75%. Except VPS. And they eagerly met our target.”

Parents and students who chose the credit card option paid 50 basis points less in fees than they would have with a processor other than VPS. Still, and not unexpectedly, large numbers of bill-paying parents and students chose zero-fee payment options: echeck, check, money order.

Beyond the numbers, Sisler notes the, “across the board positive nature of the partnership with VPS, from evaluation to a smooth and successful implementation with easy integration with the student payment portal, installation of the POS terminals, and day to day operations and support.”