The COVID-19 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 with them, payment solutions for education.
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.
For higher learning institutions such as colleges and universities, going digital is essential. Today’s students are more comfortable using digital payment methods than previous ones. 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. This 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 payment processing for education. Although we’re not ready for an entirely cashless society yet, people are using more diverse payment methods than before.
The global e-learning market was valued at just under 400 billion USD in 2022, and is expected to grow at a compound annual growth rate of 14% between 2023 and 2032. Not only that, but over 5.2 billion people worldwide use digital payments. These two stats foreshadow a future where most education takes place online, and so will payment processing for the educational sector.
Since the COVID-19 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 cheaper than 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 provides 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 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 timely payments 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. With a modern system, schools can send loan disbursements, set up automatic billing, and even send payment reminders.
How Education is Adapting to the World of Digital Payments
Until recently, 70% of students reported 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 to process payments for the education sector:
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 by integrating with digital wallets.
Buy-now-pay-later tuition plans
In an effort to make college education more accessible, companies like Meratas are bringing buy-now-pay-later (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.
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 using their preferred payment option.
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 rarely 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 other household names. This makes high-level education 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 methods to pay for education 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 will be accepted almost everywhere, just like a credit card.
Until then, there are numerous ways that organizations can make education more accessible to students by offering new ways to pay.
Gravity Payments is a payment services provider that provides modern, online payment services for schools and educational institutions. Get in touch to learn how we can help your educational institution accept digital payments.