In higher education institutions around the world the pool of international students continues to grow. By welcoming these students to a new country there can be huge benefits for everyone involved.
Countries and cities with large education hubs benefit form a more diverse society and the students themselves are able to gain new experiences, often learn new languages and have access to world-renowned academics who specialise in the student’s subject of choice.
One of the most highly debated elements of international education is the cost. Typically we see governments and the media shining a light on the cost for individuals to access higher education, however there is less attention given to the costs that these establishments incur by accepting international students. These can include:
- Fees lost due to exchange rate fluctuations when accepting payments from students
- In the case of a study package; accommodation, food and travel
- Costs associated with establishing and funding a local bank account for the student
In the realm of payments, there are countless real-world examples of where the movement of people and therefore the movement of money encounters a huge amount of friction.
We spoke to Bruno Vecchio, Director of Business Development at SEDA College to examine each of these issues in turn and discuss the ways fintech’s are solving for the challenges facing this important industry.
Study packages
Language colleges such as SEDA College with campuses in Cork and Dublin, Ireland aim to make the experience as smooth as possible for their students by offering a range of services in addition to tuition. This could include accommodation, health insurance, airport pick-up and additional 1:1 teaching.
Once the student has made their payment to the college, there is then a need for the suppliers of these supplementary services to be paid and therefore many additional transfers of funds, managed by the college themselves.
Traditional payment mechanisms for managing suppliers could include cheque, wire transfer or digital payment gateways set-up by the supplier.
Issues when dealing with a large number of payments that correlate large numbers of students ‘accounts’, can be lack of transparency, time investment, related admin costs and difficult reconciliation.
The perfect use case for virtual cards
There is a growing opportunity for fintech’s to improve this experience through offering modern accounting software solutions or by issuing virtual cards to send payments.
Virtual cards can be used to correlate records of individual student profiles to the outgoing payments for services. Transfers happen and are received in local currency and make use of establish card payment rails. An additional benefit is the enhanced security that card payments provide.
Each virtual card generates a unique 16 digital card number which reduces the possibility of fraud compared to using the same physical card. The ability to implement card and spend controls, for example setting limits on transaction amount, location and validity period, provides an additional layer of security and reassurance for education institutions.
