Annual global education spend is estimated to be in excess of $4.7 trillion. But with many schools and universities remaining closed throughout 2020, learning has shifted to a hybrid model. As a result, those hundreds of billions of dollars spent on in-person education may move elsewhere.
While other industries struggled during the pandemic, education technology, or “edtech,” enjoyed its second largest half-year growth in global venture capital funding during the first half of 2020. The first six months of the pandemic saw $4.5B of edtech investment, and experts predict the industry will reach a total value of $404B by 2025, a CAGR of 16.3%.
With the market changing at such a fast pace, education providers that embark on digital transformation journeys may be well placed to grow their incomes and enhance their services. Here, we look at how payment technologies can enable both education institutions and edtech companies to provide better learning experiences for their students and learners.
Optimizing payments for education institutions
How has the market changed for education institutions?
Since the early days of the COVID-19 pandemic, students have been taking courses from their own homes. Digital transformation became a necessity practically overnight.
Educators were forced to rapidly adapt and put a number of quick fixes in place to allow teaching and learning to continue. Many prominent institutions, including Ivy League universities in the United States, have quickly adopted online education and blended learning, often through massive open online courses and video conferencing platforms such as Zoom.
Now, leading educators are considering how to turn these quick fixes into permanent changes that add value for their students.
How can institutions ensure a simple payment experience for international students?
While cross-border travel is limited, greater availability of online courses will likely lead to a rise in international students. A smooth cross-border payment experience is fundamental to maintaining user satisfaction – and these students will often expect to be able to use their preferred payment method – so consider offering a wide range of payment options and currencies. Payment methods are often the last barrier to enrolment, so it’s vital to empower students to transact in their preferred way.
Once borders reopen, institutions’ payment strategies for international students will remain important, but for different reasons. International payments are often subject to cumbersome payment processes as well as high processing and foreign exchange fees, so universities, schools and colleges should work with a provider that can deliver a frictionless experience at the lowest cost.
How can institutions use payments to enhance their digital transformation?
Allowing students to choose how they pay can help secure enrollments and provide a better student experience. For example, by personalizing installment options to make the cost of education more manageable, you can make your courses more attractive to individual students and widen your customer base to include people who may have otherwise considered the cost prohibitive.
When students are permitted to return to in-person learning, universities, colleges and schools are expected to offer smart and contactless campuses that can enhance the digital experience for students. On-campus businesses can also improve their students’ experiences by reducing wait times, reducing unnecessary paper use, and ensuring that their payment methods are compatible with the preferences of modern students.
Allowing students to pay using their unique ID can also help enhance their learning experience by empowering them to access campus facilities quickly, easily and securely.
Enhancing payments for edtech providers
How can payments help edtech businesses grow?
As e-learning and edtech providers continue to grow, it will become increasingly important to consider offering a range of different business models. By allowing customers to pay via subscription, recurring payment, consumption-based fee or even via B2B payment models, you can attract different types of learners and help your business fulfill its potential.
Intelligent payment solutions can also provide insights into how people prefer to pay and consume your content. In turn, you can use this data to shape your future offerings and improve user acquisition and retention.
How else can payments benefit edtech providers?
If you employ teachers or tutors, you will need a way to pay them for their services – quickly and without hassle or unexpected costs. After all, your goal should be to keep your educators happy and encourage them to continue providing high-quality content and services.
Consider using disbursement solutions that can make transferring payments quick and easy whether you’re sending money to a local or international recipient. If you are sending money across borders, these solutions will limit the exchange costs, too. Available through Worldpay from FIS, Bankout and FastAccess are effective whether the recipient is using a bank account or digital wallet.
Should edtech providers be looking beyond traditional payment methods?
Alternative payment methods (APMs) are becoming more popular across the globe, and this is critical if you are looking to expand internationally. The likes of PayPal, Apple Pay or Alipay see extensive use in e-commerce and at the point of sale.
The use of digital/mobile wallets is also growing in many markets. Worldpay projections reveal that digital wallets will likely account for 51.7% of e-commerce payment volumes by 2024, with slight declines in credit cards (to 20.8%) and debit cards (to 12%).
Learners looking to make quick secure payments will likely look to APMs and digital wallets when shopping for courses. By allowing mobile users the ability to pay with their saved payment details via an APM or digital wallet, you could accelerate purchases and get more paying customers “through the door.”
Think Worldpay from FIS
We understand that education providers have specific needs and broad audiences.
We can provide support for your continuing digital transformation, setting you up with the payments tools that could help you grow your business.
Worldpay from FIS can enable you to take payments via more than 300 global APMs, making it easier to reach and receive payment from an international student audience. And with our competitive rates, transferring and receiving money from across the world can be cost-effective. We can also provide options for multiple payment tools and business models, such as subscriptions and recurrent billing.
To learn more about learner payment preferences and regional trends, read our Power your Payments for Education report.