Children pay with plastic at school cafeteria
``OK, you can go ahead,'' Linda Johnson tells the young boy in the school cafeteria serving line, waving him along past her small personal computer. The youngster is determinedly balancing a tray laden with a hot meal of rice and stew, a banana, two pieces of bread, and a pint of milk. With a grin, he quickly strides off to a table to join his classmates.
The cafeteria is located at Newark's Mount Vernon Elementary School, which has some 1,000 students. During this particular lunch segment, Ms. Johnson, a cashier, will move more than 300 children through her cafeteria line in just 13 minutes.
Mount Vernon is one of two schools in Newark participating in a unique test program involving a prepaid automated card service for school lunches. The system is simple: Each child has his or her own debit card, somewhat similar to a credit card. As the child enters the lunch line, the card is inserted into a machine that uses an infrared light to ``read'' the information on it.
And the card, appropriately for youngsters, can be inserted into the machine in any direction - forward, backward, or even upside down. Though the children don't know it, the card can even be squashed, mangled, or put through the wash and still be read.
Once read, one of three lights, similar to traffic control lights, flashes on for the child: A green light means the child's school meal account is up to date and that the lunch has been paid for; a yellow light means there is enough in the account for today, but the account will probably be short of funds the next day; a red light means the account does not have enough money in it for today's lunch.
At Mount Vernon, children with red lights and no pocket money are usually let through the lunch line, but the parents will have to square the account at some time in the future, Johnson says.
``I like getting green lights,'' says a small girl who, with two of her girlfriends, is quickly moving through the serving line which stretches down the hall.
The system being used at Mount Vernon School is a ``direct debit'' program developed by Prepaid Card Services Inc. (PCS), a privately held company in Pearl River, N.Y. The system is thought to be the first step in a technological revolution in lunch programs for millions of American schoolchildren, from preschool through college. Moreover, some computer experts believe the concept could be applied to a wide range of personal transactions, and could affect the way children shop at retail outlets hooked into a computer system. Also, debit card systems, which take the money directly out of a checking or savings account instead of sending a credit card bill to be paid later, could be used for most corporate and institutional lunch programs.
Using personal computers from International Business Machines Corporation and NCR Corporation, PCS has been marketing its data-card system to various schools for about two years, says Michael Luckman, marketing director for PCS. Programs have been installed or are being set up in some 20 major areas, including Chicago; Philadelphia; Dade County, Florida; New York; Denver; Salt Lake City; and Newark.
PCS's principal shareholder is Abraham Halpern, a real estate developer. Mr. Halpern originally designed the debit card technology to automate laundry rooms in his buildings. Company officials believe sales for 1988 will reach $500,000. But by 1989, Mr. Luckman says, sales could jump to the $5 million range. He believes the entire debit-card market within the food industry may be worth upwards of $1 billion annually.
Next year PCS will join with Dayton, Ohio-based NCR to market its program and equipment around the United States by way of NCR's extensive sales and maintenance network.
The need for a computerized school lunch program has become increasingly apparent to school officials, Luckman says. The US Department of Agriculture subsidizes lunches at 90,000 public and not-for-profit private schools around the country at a total cost to taxpayers of close to $4 billion. But following disclosures in recent years of waste and fraud in some school systems, the government has tightened its reporting procedures. Schools must now keep detailed records on students who receive free or subsidized lunches. A computerized program does that, he says.
``We like the system because we've got a permanent record of all our transactions,'' says Bill Wilson, vice-principal of Mount Vernon school. Moreover, the program eliminates the stigma of receiving a subsidized lunch, since the children never know who is, or is not, getting a free meal. All the children see are account numbers.
``It's a tremendous time saver,'' says Luann Maycock, who coordinates the computer food program for Salt Lake City schools. So far, five of the schools are on line, ``although eventually we hope to have all of our 42 food sites hooked up,'' Ms. Maycock says. ``What's nice about the program is that you don't have to hand count the children, identifying who is on free lunch, who is on a reduced-cost, who is just visiting.''
``We haven't heard of anyone doing anything quite like this,'' says Andrea Gordon, a writer with POS News, a Chicago publication that covers ``point of sale'' transactions.
Prepaid Card Services, Ms. Gordon says, ``has really caught on to something. This eliminates the need for a second or third party, such as a banking institution [in the case of a credit card].'' Gordon says that she does not know how well such a system would work on a college campus, as now envisioned by PCS, or in a retail application, but she does note that ``cash stations'' involving automated teller machine systems are now popular on some college campuses.
Luckman estimates that the typical cost for an elementary school for the system is about $6,500; for a high school, about $10,000. But that means, he says, that the cost works out to about $1.50 for each student each year for a five-year period.