Drawing from insights from a Center for Digital Education* (CDE) webinar,[1] this paper outlines ways higher education leaders can provide enhanced payment options for today’s students while ensuring transactions remain secure.
“Students are used to having everything on their phones,” says Peter Scharnell, head of payments product management for Transact Campus. “If they can’t make payments on phones or tablets, we’re missing the mark.”
CHANGING PAYMENT PREFERENCES
The global mobile payment market generated $1.97 trillion in 2021,[2] and some 3.5 billion people now use mobile payment apps.[3] Among the younger users most likely to be on campus, virtually all — 92 percent — expect to be able to use their mobile devices to make payments.[4]
"Students want to live in a 24/7 world — not just in terms of access to resources, but how they pay their bills," says CDE Senior Fellow Jim Jorstad.
For colleges and universities, that means providing a range of options that fall under the umbrella of enhanced payments. This includes mobile-first options for students and the ability for parents to pay from home. Institutions must be able to manage cashiering, their own payment cards, and processes for international payments and dynamic billing. This is in addition to payments made to on- and off-campus businesses such as retail outlets and service providers.
FOCUS ON THE USER EXPERIENCE
Managing this wide range of use cases with limited IT staff requires standardizing a single solution that can integrate with existing institutional technology such as enterprise resource planning (ERP) systems and payment processors. Solutions must also address compliance, including the Payment Card Industry (PCI) Data Security Standard, and issue 1099 forms. Most importantly, institutions can’t afford to overlook a concern that directly relates to students.
“What is the end user experience like?” Jorstad says.
Getting user experience right and expanding payment options can yield significant benefits for institutions. Integration with ERPs and other systems can improve reconciliation and yield insights from data that can improve student services and operational efficiencies. And for colleges and universities focused on attracting and retaining students, enhanced payment options are important for a much simpler reason.
“We’ve got to go where the kids are,” says Ben Johnson, director of student financial systems at Ball State University, which is enhancing payment options throughout the institution.
STRATEGIES FOR SUCCESS
Institutions seeking to enhance payment options must understand changing payment trends and the capabilities of technology providers and partners. Among the strategies:
Use student input for priorities. The best way to understand what services students want is to ask them.
Develop multiple payment options for each use case. For example, on-campus payments should integrate with mobile and in-person options. And institutions should consider providing their own payment options for international students and families who use foreign currencies.
Choose partners who understand campus needs. Technology providers should offer the functionality to meet a wide range of institutional needs, including mobile usage, PCI compliance, scalability and integration into ERPs and other financial systems. This will help simplify reconciliation and generate insights to inform decisions.
Understand security offerings. Along with PCI compliance, providers should offer end-to-end encryption or tokenization of credit card transactions and other sensitive data. Tokenization, for example, replaces credit card numbers with de-identified data.
Find opportunities to integrate additional student services. This can include on-campus vendors, parking and laundry services.
Educate students and parents on new payment options. QR codes, for example, can be an easy way to highlight mobile payment options. It’s also important to educate students on setting up parents or guardians as authorized payers. At Ball State, for example, officials provide a detailed overview of that process during student orientation.
STAY OPEN TO POSSIBILITIES
Given the rapid evolution of payments, institutions should focus on continued opportunities to enhance payment options. Some colleges and universities have explored accepting cryptocurrency as a long-term option, while many others are looking at popular peer-to-peer payment services such as PayPal and Venmo.
Remaining responsive to changing payment preferences will become increasingly important as colleges and universities attract more international students, along with students whose families don’t use banks and rely on alternative payment methods.
Above all, it’s vital to pay attention to what students want.
“I don’t carry around cash or checks. I haven’t in years, and students don’t either,” Johnson says.
AT BALL STATE, NO MORE TRIPS TO THE ATM
Currently, when students at Ball State University in Indiana try to make in-person payments with a credit card, they’re sent to a nearby ATM. The Indiana university isn’t set up to accept in-person credit card payments, but that will soon change as part of a broader enhanced payments solution.
The solution, which replaced multiple systems that worked with two separate payment processors, already handles mobile transactions, campus cards, in-person cash payments, departmental deposits, savings plan payments and 37,000 other types of campus provider transactions. Soon, Ball State will be equipped to handle international payments, payment plans and billing statement modifications — eliminating the need to visit ATMs. And with the increase in enhanced options, in-person demand has already declined significantly.
“Pre-pandemic, we would have lines at the beginning of the semester,” Johnson says. “Now students only come with questions.”
1 https://webinars.govtech.com/Keep-Operations-Seamless-With-Enhanced-Payment-Options-141375.html
2 https://www.globenewswire.com/en/news-release/2022/06/22/2467233/0/en/Mobile-Payment-Market-Size-Worth-USD-11-83-Trillion-in-2028-29-1-CAGR.html, https://moneytransfers.com/news/content/mobile-payment-statistics
3 https://www.prnewswire.com/news-releases/mobile-wallets-showing-strong-post-covid-growth-rising-to-5-6-billion-in-circulation-by-2027--301673904.html
4 https://twitter.com/visanewseurope/status/933334259598811136
*Note: The Center for Digital Education and Government Technology are both a part of e.Republic.
