Global educational innovators are constantly on the lookout for inventions that can improve the quality and delivery of education globally. The most recent trend is the adoption of fintech solution in educational institutions and EduTech. This innovation is widely adopted by modern tertiary institutions abroad especially for immigrant students.
One of the highest factors behind immigration in developed countries is Education. More international students are traveling across nations and continents to expand their knowledge, improve their experiences, and build meaningful networks. This has placed more demand on the educational sector globally. Also, there’s a large cost gap that either the student or the school has to provide. The fact remains that international education is highly expensive.
To control this overhaul, several brands have built Educational Technology firms which help distance learners gain meaningful learning experiences from their primary location.
However, just like with every initiative, there are different aspects of Edutech that need to be moderated, enhanced and further developed. While Edutech attempts to reduce the level of immigration to developed cities for educational opportunities, the number of immigrant students continues to rise. In most cases, particularly with traditional educational institutions, there are several payment issues such as lost fees due to exchange rate fluctuations when accepting payments from students, immediate billing and invoicing of students fees, costs associated with establishing and funding a local bank account for the student, settling account discrepancies, delayed financial transactions, etc.
This is why institutions must be willing to adopt smart solutions to create more financial inclusion for international students by bridging the gap in access to finance and optimizing financial management systems. This is the gap that Virtual Cards and fintech promises to close in educational institutions.
Importance of Fintech Solution in Educational Institutions
- Smooth reconciliation: One of the challenges in large educational institutions is reconciling payments from a large number of students’ accounts. By incorporating modern accounting software solutions into school platforms or issuing customized virtual cards to facilitate payments, Fintech can improve this experience and save school admin extra time used in reconciling payments across several students.
Virtual cards are very reliable, secure and allow for transparency in record keeping. It can be used to compute accurate records of individual student profiles to the platform for outgoing payments for services. This way payments are received in the same local currency with enhanced security that card payments provide.
Unlike physical cards, this virtual card provides a unique 16 digit card number for every transaction, thereby reducing the possibility of fraud. This innovation allows the educational institutions to control spending through this card, by simply setting limits on transaction amount, location and validity period for the learner.
- Exchange Rate Fluctuations; One of the considerations educational institutions must make when receiving international students is their exchange rate and monetary policies. This greatly impacts how they can adapt to the institution’s payment system. Already, the fluctuating exchange rates payments from students from different parts of the world puts the institution at a risk of receiving less value of money than expected. Educational institutions can apply various strategies such as hedging, timing outgoing payments and setting prices in multiple currencies to compensate against this risk. While each of these options demand careful research and consideration, setting prices in multiple currencies is an effort that hedges the institution against unequal fees. It also requires consideration of transaction fees and also the financial regulations local to the student in their home country as well as the location where the funds are being received.
- Navigating local financial systems:
One of the challenges international students could face in settling into a new school is trying to use the banking system of their host country. They could feel knocked over by endless procedures and protocols. Most times, this struggle isn’t even necessary or worth the pain, especially if the length of study is for a year or less.
In this light, most international schools provide a mini financial service to cover for this gap by providing prepaid cards. Depending on the school’s regulations, this card becomes a popular choice for making payments online even out-of-campus.
Students have the ability to withdraw cash, transfer funds and make online transactions within the limit allowed by the school.
Conclusion
In the world of payments, there are several instances where the movement of money encounters a huge friction as people move from place to place. Therefore educational institutions must be flexible and open minded in adopting innovative payment structures. One of the most common structures as posited many times in this article is the adoption of a prepaid virtual card.
For international students, it guarantees access to finance with no need for a credit check or a credit history in their host country. Students can further enjoy greater security in not needing to carry cash around, they are able to make payments for particular needs as time goes on. Using other Fintech features offered by their institution and card provider, students can budget their day to day expenses, and place spending control.
On the other hand, adopting smart e-payment features and virtual cards helps administrators save time in reconciling fee payments for thousands of students. It also reduces administrative overhead for maintaining a working accounting system. Through BaaS, institutions can now effectively manage their financial structure while also improving the livelihood of several international students in the school.
However, creating online wallets, automating virtual cards is not the immediate responsibility of an educational institution, so it is necessary that these educational organizations establish partnerships with Fintech brands who can create tailored financial services to match the objective of the institution. Looking to adopt a smart payment system in your organization? Let’s help you.
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