Despite a post-pandemic slowdown of international students from key countries like China and South Korea, global outbound student volumes are still expected to grow at an average rate of 4 – 4.5% per year until 2030. This demonstrates that many Education institutions continue to operate as international businesses. And while strategies for managing international student payments are discussed regularly, the challenges that education institutions experience with their outbound international payments are less talked about.
Student recruitment agent commissions, international research projects, scholarships, library subscriptions, capital expenditure for large value equipment purchases, marketing, advertising, student refunds, overseas travel and conference registration expenses are all activities that require the navigation of international payments. Institutions need peace of mind that these payments will be delivered accurately and on time, given their fundamental role in developing strong relationships with vendors, partners, students, and employees.
Understanding outbound international payments
The management of outbound international payments comes with plenty of challenges, which are becoming more complex as the payment landscape evolves. Fraud protection and regulatory compliance are growing obligations that create additional work for finance teams. While manual payment processing can lead to errors and bounce-backs. Delivery times can be slow and elusive, with limited visibility into fees and charges added by different banks enroute. On top of this, currency fluctuation can lead to surprise costs that disrupt cash flow and send budgets off course.
What should your education institution look for in a cross-border payments provider? Here are some key aspects to consider when looking for a partner to help you manage international payments more efficiently.
1. Support for compliance and security
International payments are a prime target for cyber criminals and data breaches due to a key challenge, which is navigating the complex web of regulatory requirements across different jurisdictions. Every country’s banking system has its own set of regulations including Anti Money Laundering (AML) laws and Know-your-Customer (KYC) requirements to combat things like fraud and terrorist financing.
Compliance is more than a matter of legal necessity. It also has significant cost implications for Education institutions, in terms of the time and resources required to stay ahead of evolving regulations and maintaining operational procedures that enforce compliance. Failure to comply with this multitude of laws and regulations can result in hefty fines, reputational damage and loss of trust amongst vendors, employees, partners and students
Your institution needs an experienced payments partner with the necessary licensing to meet your needs, help you protect your business, and manage compliance without overheads. This partner must have a comprehensive and pressure-tested Global Risk and Compliance Program that holistically addresses potential risks such as anti-money laundering, counter terrorist financing, fraud, sanctions, and conduct.
At Convera, we hold over 60 financial service licenses around the world and proactively engage with regulators to remain aligned with requirements, expectations, and industry standards. Our payment platform provides secure and compliant outbound international payments without the hassle of opening and managing overseas bank accounts. Every outbound payment you make undergoes real-time and post transactional monitoring for fraud and sanctions violations, anti-money laundering, and counter-terrorist financing (AML/CTF) so you can navigate international markets with confidence.
2. Flexible integration capabilities
Are you manually transferring outbound international payments data into your ERP system? Doubling up on data entry is time that could be better spent on more strategic tasks, not to mention prone to human errors. Reduce administrative burdens by ensuring that payments provider offers a platform that can easily be integrated with your ERP system so you can automatically reconcile outgoing transactions.
Convera’s payment platform offers convenient integration with a wide range of ERP systems including Workday, TechOne, Agresso, Oracle, SAP and Sage. With a fully integrated platform, your institution can also easily review outbound payments data, identify trends and compile meaningful reports that help you make informed decisions. Ultimately, integration allows you to streamline the payments process which frees up resources to focus on more strategic priorities.
3. Guiding the right payment method for your transaction
International business has evolved significantly over time so that today there are numerous methods of transferring funds across borders, each with its own unique characteristics, benefits, and drawbacks. It’s easy to feel overwhelmed by the options available to businesses, but some of the more traditional international payment methods include ACH (Automated Clearing House), RTGS (Real-Time Gross Settlement) and Telegraphic Transfers.
ACH payments, known as SEPA in Europe, are electronic transfers typically processed in daily batches which take a few business days to settle. As such, they may not be suitable for time-sensitive international transactions, but they are more cost-effective than other methods when it comes to high-volume, low-value transactions.
RTGS payments typically settle within a few hours which makes them ideal for time-critical international transactions. They are a more expensive option, however they’re also secure and irreversible once initiated, minimizing the risk of payment fraud or disputes.
You can learn more about the different methods available for outbound international payments, including EFTs and TTs on this blog post. Suffice to say there are numerous pros and cons to every available method. Overcome the daunting task of choosing the right method for each payment you make, by choosing a partner that works to understand your institution and its requirements, to advise accordingly.
4. Global reach and currency support
It’s essential to assess the size and reach of any potential payment provider’s global network, and their ability to meet your currency requirements now and into the future. A reputable provider should have a broad network of banking partners worldwide and the ability to make global payments look like local payments.
Although it may not seem necessary, this feature can help with the cost and speed of international payment processing by minimizing the number of third-party financial institutions that your funds travel through. The more parties involved in the transaction, the more fees are likely to be deducted along the way.
An extensive financial network also means the provider can facilitate payments in a wide range of currencies into local bank accounts. Whether your business transacts in major pairs or emerging currencies, this will ensure you know the cost of your payments in advance and assist with mitigating the effect of currency risk.
Convera partners with 60+ banks and maintains over 500 bank accounts around the world. We help 30,000 businesses send and receive over 140 currencies across 200 countries and territories.
5. Currency risk management expertise
Constantly shifting exchange rates can often cause uncertainty about the true cost of an outbound international payment. Let’s say your institution needs to purchase a piece of equipment from overseas. You secure budget for this expense based on the current exchange rate, only to find that the invoice will cost more than you anticipated because your home currency has weakened since your initial request. Sometimes, outbound international payments can cost more than anticipated simply due to shifts in currency values that take place between the time a transaction is initiated and when it is settled.
The best way to mitigate the impact of currency risk on your institution is to work with a team of fx specialists to develop a risk management strategy that meets your unique needs. Convera offers a complete range of financial instruments that can help manage currency risk, such as forward contracts or currency options which enables you to lock in exchange rates for a set period, so you can budget and forecast more accurately*.
6. Customer support and service level
There’s a lot to consider when it comes to outbound international payments; from understanding intermediary bank fees and SWIFT codes, to choosing the right payment method and staying across rapidly evolving changing currency markets. It’s critical that you have confidence in your payment provider’s ability to provide accurate and timely support.
Convera is committed to meeting the service level agreements we establish with customers, ensuring that payments reach their beneficiaries without distracting you from your core responsibilities. Your institution will receive from an account manager dedicated to your institution, who is familiar with the Education sector and will invest time understanding the unique requirements of your institution.
7. Reputation and reliability
When you’re sending significant sums of money overseas, you must trust your payment provider completely. Make sure to research their reputation and reliability, and experience with the unique requirements of Education institutions.
With more than 40 years’ experience as a leading payments provider, Convera currently services over 1000 Education institutions, including 8 of the top 10 globally ranked schools. Convera holds 60 financial service licenses, partners with more than 60 banks and maintains over 500 bank accounts around the world. We have proven technology, network, and sector experience to help treasury and finance leaders successfully thread the needle between fraud, compliance, and customer experience for international payments.
Thrive with the right outbound international payments provider
From fraud prevention to compliance, automation and managing the impact of currency fluctuation on your budgets, there’s a lot to consider when choosing an international payments provider. Research is key to finding the right fit for your institution’s needs. Contact our team of education specialists today for a discussion about your requirements, and how Convera can help streamline your outbound payments.
*Convera is the issuer of the products discussed herein and would be a counterparty to any transaction you undertake with Convera. This brochure is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Convera or its affiliates to any registration or licensing requirement within such jurisdiction. Customers may be required to meet certain eligibility requirements in order to enter into foreign exchange transactions with Convera. Claims regarding the products discussed and other information set out herein are general in nature and do not take into account your specific objectives, financial situation, or needs. This brochure does not constitute financial advice or a financial recommendation. You should use your independent judgment and consult with your own independent advisors in evaluating whether to enter into a transaction with Convera. Convera has based the opinions expressed herein on information generally available to the public. Convera makes no warranty concerning the accuracy of this information and specifically disclaims any liability whatsoever for any loss arising from hedging decisions based on the opinions expressed and information contained herein. Such information and opinions are for general information only and are not intended to present advice with respect to matters reviewed and commented upon.
Want more insights on the topics shaping the future of cross-border payments? Tune in to Converge, with new episodes every Wednesday.
Plus, register for the Daily Market Update to get the latest currency news and FX analysis from our experts directly to your inbox.
