The pandemic pushed us all indoors and pushed our world even farther into the Digital Age. Schools and other educational institutions switched to online tools and helped shape the “new normal”. We needed new tools to help us learn and make payments online.
The online courses and e-learning market blossomed as the need for accessible education options increased due to social distancing regulations. Native to the internet, online learning lends itself to payment innovations.
Digitizing higher learning institutions such as colleges and universities is essential. Today’s students are more comfortable using digital payment methods than ever before. Recent studies show that 82% of Americans now use digital payments, up from 72% in 2016.
University-level institutions benefit from digitizing their payment systems. When colleges offer students more ways to pay, they make it easier for young adults to access higher education. It also helps attract new students from across the world.
How has the education sector adapted to the Digital Age?
Benefits of digitizing education payments
Before we take a look at how educational institutions are adopting digital payments, let’s discuss some of the benefits of digitizing education payments. Although we’re not ready for an entirely cashless society yet, people are using more diverse payment methods.
The e-learning market will double in the next four years since schools have had to adapt to distance learning. Not only that, but over 5.2 billion people worldwide use digital payments. These two stats foreshadow a future where most education transactions take place online.
Since the onset of the pandemic, online courses have become a popular way to up-skill without having to attend expensive in-person classes in an academic environment. Another reason for their popularity is the affordable and numerous payment options.
E-learning solutions have historically been much less expensive compared to college courses. Paid courses and colleges are also in competition with accessible online education programs. While higher-ed institutions are unlikely to make college more affordable any time soon, they can learn a lesson from online course platforms that provide flexible digital payment options.
Processing digital payments with a centralized payment infrastructure can provide many benefits to students and staff. Students can use digital payments to make payments towards tuition, online test prep, and paying back student loans. And recent research shows that when students have more payment options they tend to make more of their payments on time.
Schools can use digital payments in other ways. Universities can expect more payments to come in on time with digital payments. Since millions of students depend on financial aid, a speedy disbursement system is essential.
Instead of waiting weeks for that money to hit their bank account, mobile and digital payment options post payments within hours. Schools can send loan disbursements, set up automatic billing, and even send payment reminders with a modern system.
How education is adapting to the world of digital payments
Until recently, 70% of students report favoring credit cards for making online payments despite the risks. With digital payments on the rise, more payment methods are available than ever before. Modern payment methods like buy-now-pay-later, cryptocurrencies, and fintech apps are especially popular among young adults and can help students avoid costly interest rates, fees, and other charges.
Here are some ways that the education sector is incorporating digital payments into its business model:
Digital wallet integrations
Checks and bank accounts are out. Digital payments are in. The next generation of students is looking for alternative banking solutions. Online colleges and online course platforms reach students from across the world with digital wallet payment integrations. Apps like PayPal, Apple Pay, and Google Pay are a few of the most popular digital wallets that your organization can accept.
Buy-now-pay-later tuition plans
In an effort to make college education more accessible, companies like Meratas are bringing BNPL to the education space. An income share agreement, or ISA, is kind of like a loan but with a few key differences.
Instead of receiving a loan with an interest rate through the government, a bank, or an educational institution, an ISA can be secured that does not require students to make any payments until they start earning a certain amount, at which point a percentage of their income goes to the ISA or university.
Do you know how the youth are glued to their phones? Well, text-to-pay offers students a new way to manage their school accounts from their mobile phones. Studies show that 60% of people read their SMS within 5 minutes of receiving it. That means students are more likely to make their payments.
How does it work? Students will receive a text that says their payment is due. Then, they can either go to the university’s bursar office or simply tap a link to make their monthly payment.
Look for integrations that come with crucial features such as custom invoicing templates and recurring billing to get the most out of text-to-pay. Students never miss a payment with recurring billing, and schools have more revenue.
Online courses have become a popular way for students to continue their education or upskill for their careers. And now, some websites are taking the subscription-based business model to another level.
Popular online course platforms such as Udemy and Coursera offer students the opportunity to access content for a simple monthly fee. Instead of paying for each and every course, users can pay an automatically recurring fee and access as much content as they can absorb.
Groundbreaking platforms like edX offer individual courses from top universities around the world including Cornell, Harvard, and others you have definitely heard of. This makes high-level education even more accessible to those who can’t relocate, quit their jobs, or afford an ivy league education.
The education sector has transformed how we learn and how we pay for higher-level learning. On-demand online courses, subscription-based payment models, digital payments, and other innovative payment solutions are providing students with unprecedented access to education.
New payment method options offer real-time visibility for both students and for administration. With more ways to pay, higher education is more accessible to students. It can even help with back-office challenges such as tracking payments, payment reminders, late payments, and more.
To empower students in a rapidly changing world, universities and other educational institutions must accept a variety of payment methods. Eventually, digital wallets and payment integrations will be a standard payment method just like a debit card. Until then, there are numerous ways that organizations can make education more accessible to students with new ways to pay.
Nahla Davies is a software developer and tech writer. Before devoting her work full time to technical writing, she managed—among other intriguing things—to serve as a lead programmer at an Inc. 5,000 experiential branding organization whose clients include Samsung, Time Warner, Netflix, and Sony.