The pandemic saw many higher education institutions (HEIs) invest in digital technology to enable lectures and distant learning. Indeed, by 2026, it's predicted that the eLearning market will reach 167.5 billion US Dollars.
But, while there has been a rush to deliver online services, non-educational digital investment has been neglected. According to McKinsey, by failing to modernize and streamline administrative functions—including their payments— it is more difficult for universities to fulfill their academic missions.
Joanne Gray, Senior Sales Manager and Ben Harris, Business Development Representative at Checkout.com discuss how an HEI can gain a competitive advantage in a shifting market By digitizing its payments.
Legacy payments are letting HEIs down
Many HEIs are still locked into manual settlement processes or else are offering limited payment choices for their customers. By doing so, they’re failing to deliver the convenience, speed, security and transparency that their stakeholders have come to expect when paying for goods and services online.
Legacy processes—like manual card payment receipts, processing cash and cheque collection—are not only slow and inefficient, but they also leave HEIs more vulnerable to error and fraud. Involving more laborious record keeping, they’re also more likely to lead to under or overpayment and issues with auditing and compliance.
The payments landscape is complex and competitive
Run as commercial enterprises, today’s HEIs must be accountable and profitable. This revenue is generated through tuition, accommodation fees, library, lab and equipment costs, societies, workshops, and campus services—among other things.
In addition, payments are not just from students (and parents). Many HEIs also have corporate customers who use their research, courses, accommodation and leisure facilities. Sponsors and alumni also make regular contributions through events, merchandise, marketing initiatives and regular subscriptions.
Among all these stakeholders, payment expectations are changing. They now want clear and convenient online purchase options and secure payment processes—from anywhere and at any time and using their preferred payment methods. And that means digital payments.
These are the advantages that digitizing payments offers
There are many ways that improving payments can help HEIs and on-campus merchants thrive by making them more commercially attractive.
Here are our top four:
1. More payment choice
It’s no longer enough to accept credit and debit card payments or bank transfers. The way HE students want to pay is changing rapidly and HEIs need to keep up. We recently surveyed HE-aged consumers in the UK about their favorite payment methods and found that 50% regularly used digital wallets and 20% use buy now, pay later (BNPL). Surprisingly, more have now used crypto (43%) than cheques (24%). Offering the right payment mix, can help boost conversion rates and order values for ancillary items and add-ons.
2. Mobile-first and cashless campuses
During the pandemic there was a big drive towards cashless campuses, enabling contactless and mobile payments for everyday purchases. Many HEIs took this further with QR codes and hybrid services like buy online, collect in-store (BOPIS) and click-and-collect. But there is still much work to be done. Having providers that can optimize payments for students on the go using mobile apps is crucial.
3. International currency
Over 600 thousand international students are studying at UK HEIs. In the US, more than 300 thousand students from China alone were studying at US Universities. And in Australia, there are a wide cohort of international students from across the globe.
These students contribute to the viability of many courses and HEIs rely heavily on their contributions. Being able to offer them smooth and seamless multicurrency payments is essential. As is real-time transfer and confirmation and direct currency conversion (DCC). The right payment provider can help HEIs convert better, offer more currencies and cut payment processing costs while ensuring they reap the benefits of DCC rebates.
4. Greater flexibility and control
Digitizing payments allows HEs to deliver more customized options, including tuition and payment plans, while allowing admin functions to easily create branded reports, invoices, or other billing documents. It also reduces the effort required to handle late fees, set up recurring billing, auto-pay features, and over and underpayment reporting. Having a single integrated digital payment platform can also enhance efficiency and productivity across complex HE estates, which may have multiple channels and websites, physical POS estates, and several merchant accounts. Importantly, it provides real-time data for better decisions, access to automated reports, and full visibility of income and cash flow.
Future-proofing an institution
Payments play a major role in ensuring the commercial and operational effectiveness of HEIs. The right investments, with the right partners, can have a big impact on their ability to enhance a major part of the student and stakeholder experience.
Legacy payment platforms are no longer able to service the complex nature of digital payments in a way that can keep an organization competitive. Finding a partner with technology that supports the digital economy will help to position your institution for success now and into the future.