Educational institutions have dealt with significant headwinds in the past few years. Pandemic lockdowns and travel restrictions, followed by a slew of geopolitical issues, including wars and inflation, have significantly disrupted the trajectory of international student mobility.
Now, with changing demographics affecting overseas college attendance, universities must adapt to shifting demand: 60% of international students consider alternative payment methods (APMs) important. So how can universities keep up — and what does the new era of student mobility mean for APMs?
Dino Leo, Convera’s Head of Education for the EU spoke to Naz Ali, Convera’s Global Head of Market Insights, Graham Smith, IODM’s Head of Business Development for the UK, and Keith Adams, the Assistant Director of Finance at the London School of Economics to break down the challenges institutions face and the opportunities within.
The impact of emerging markets
“Every single month, a million people turn 18 [in India],” states Naz Ali. They look for further education opportunities, and wealth creation is a predictor of how many of these students can afford to go overseas. The London School of Economics (LSE) is seeing this boom play out in real time.
International students are very important to LSE, explains Keith Adams. Seventy percent of students are from outside the UK. While its largest market is China, they’ve seen significant growth in the Indian market, which has nearly doubled in the last two to three years.
These demographic changes are also responsible for a growing preference for alternative payment methods. And other emerging markets are rising swiftly: Vietnam, Nigeria, Kenya, and Venezuela. This is great news for diversity, but an additional challenge for schools, such as LSE, where everyone has their own preferred APM.
LSE, for example, has students from 143 countries. For a Chinese student, the preferred payment method might be Alipay, while an Indian student might prefer Paytm. MoMo Pay is the most popular alternative in Vietnam.
With such a wide spectrum, how do you provide a slick and seamless, user-friendly payment experience that meets the needs of students and universities?
Meeting the challenge with technology
There is a common theme across universities in the UK, explains Smith. Finance resources are low, the number of students is high, and delinquency rates can also be quite high. This is often due to a lack of clear payment instructions, insufficient communication, or inflexible payment systems. There is a clear need for a solution that takes the pressure and workload off finance teams.
“The easier you make it for students, the less chance there is that they’ll pay late or get confused, and therefore, everyone is happy,” says Smith, adding that automation can play a big part in easing the burden on university finance departments.
Students from different communities have different expectations of their payment journeys. In some cases, parents are paying tuition fees — wires or checks might be what they are used to. Automated communications can help finance departments focus on different groups of students to help meet their expectations or give them clearer guidelines based on their previous experiences.
Expectations for payment plans have also risen since the pandemic, so universities must adapt to meet that demand as well.
Ultimately, institutions seek a product that can accommodate all these alternative payment methods within a regulated, fully licensed application to process payments quickly and easily. The London School of Economics has partnered with Convera and done just that, utilizing GlobalPay for Students (GPfS) to transform its finance system.
Want more insights on the topics shaping the future of cross-border payments? Tune in to Converge, with new episodes every Wednesday.
