Why the education sector needs smart payment solutions
This year, higher education market share is expected to be over USD 800 billion globally and expected to reach over USD 2 trillion by 2033. With many moving parts - between tuition and fees, loans, scholarships, salaries and more - the sector faces many unique money movement challenges when it comes to managing liquidity, debt and cash flow.
Education continues to be big business. This year, the higher education market share is expected to be over USD 800 billion globally and expected to reach over USD 2 trillion by 2033. With many moving parts - between tuition and fees, loans, scholarships, salaries and more – the sector faces many unique money movement challenges when it comes to managing liquidity, debt and cash flow. In South Africa, over half a million students owe funds to education institutions, with one major institution reporting over R3 billion in outstanding fees.
Funding goes beyond covering tuition, however. Across all education levels, payments are at the heart of facilitating and accessing ancillary resources that enhance the learning experience. Examples include parents topping up school wallets that their kids can use at a tuckshop, students purchasing textbooks and learning devices on campus, and international students receiving funds from home or paying for their tuition from a local bank account.
These needs can present challenges often aggravated by antiquated, manual treasury and accounting systems. To stay on top of things, institutions, schools, and financing partners need smart payments solutions to streamline operations and provide high-quality, reliable services.
Problem-solving across all learning levels
How Stitch can support traditional learning institutions
Stitch makes it easier to manage school-related payments by enabling institutions to:
- Simplify monthly and termly fees with recurring payments, enabling parents to subscribe or unsubscribe whenever they want
- Ensure disbursements are made on time with automated Payouts, available 24/7,365
Primary and secondary schools
Over time, primary and secondary institutions have increased their payment requirements and complexity. Smarter solutions have become a compulsory service to facilitate growing transactions that vary in urgency, volume and value. These include things like:
- Regular tuition and school fees
- Fees for extracurricular activities and programmes
- Automated salary disbursements for staff
- Payments to uniform and textbook suppliers
- Transactions with tuckshop vendors
- Funds from donations and fundraisers
- Funds for students to use day to day at school
In parallel, parents and stakeholders have become more digitally savvy, requiring schools to adapt to more digital, flexible and streamlined payment and money movement options.
For example, sending children to school with cash to pay for lunch, civvies or cake day raises safety concerns for both parents and the school. Additionally, valuable time is diverted from teaching as teachers need to reconcile the payments manually. As a result, schools have adopted payment apps like Karri to facilitate these payments between parents and their schools.
Solutions like these offer secure ways for parents to pay for their kids while maintaining control and oversight of their money. The same goes for regular recurring fee and tuition payments.
How Stitch can support e-wallet solutions in education
- Help parents to pay regular fees securely with Debit Order / DebiCheck collections, as well as alternative methods like Card, Pay by bank and Manual EFT
- Top up student wallets using Card, Pay by bank or other methods
Universities and higher education institutions
Universities can look like small economies. They receive funding from government grants, private institutions, and tuition fees. These funds are used to develop academic programs and provide the necessary ‘public’ services like research, housing and other campus facilities.
On the expense side, universities financially support students in the form of scholarships, bursaries or allowances. And similar to national treasuries, they also handle a variety of internal transactions, including vendor payments, payroll for staff and operational costs like utilities.
As such, universities have complex payment requirements that can be challenging to manage effectively, especially when working with outdated systems, manual procedures and siloed data centres.
How Stitch can support higher education institutions
Stitch simplifies processing and reconciliation for back office and finance teams by helping them:
- Reconcile all transactions through a central dashboard
- Get real time notifications when funds are settled, regardless of the source or payment method
- Take the hassle out of audits with automated and daily reporting
Enabling flexibility and control in financing
Lending partners
Lending institutions support students' academic journeys, from funding tuition to enabling daily living. Platforms like Fundi provide loans to address a diverse set of needs, including device and accommodation loans. In addition to providing student loans, the National Student Financial Aid Scheme (NSFAS) disburses allowances that can be used to cover living and learning expenses. Managing the disbursements of these funds to all the appropriate accounts requires an advanced payment platform that can handle the complexity.
When repayments on loans are made, the scale of these transactions make it a challenge for institutions to allocate and track them efficiently and accurately. In addition, lending institutions need to be flexible about how the loans are repaid by supporting both recurring collections and alternative payment methods for once off payments. A robust payment solution can help lending institutions simplify their operations and improve their repayment rates, allowing more resources to focus on supporting students’ academic success.
Stitch can help lending institutions:
- Disburse funds at scale with automated Payouts, available 24/7, 365
- Accept and reconcile one-off repayments via Pay by bank, card or manual EFT
- Simplify regular collections with DebiCheck, Debit Orders and hassle-free recurring Payments
Repayment partners
Repayment partners act as intermediaries between the lending institution and the students. They make it easier for students to repay their loans while handling the administrative burden on behalf of the lenders.
For the students, repayment partners make payments easier by offering:
- Tailored repayment plans and
- Flexible payment options
Lenders choose a repayment partner to:
- Access real-time tracking and detailed reports and
- Identify delinquencies early
Stitch can help repayment partners to:
- Manage and route transactions to universities and lenders across geographies with a robust payment orchestration platform, Stitch PayOS.
- Give students the freedom to choose how they’d like to pay, with flexible options such as:
- Create custom payment plans with recurring payments and gain clarity on cashflow with confirmed collection dates and amounts
Critical in the ecosystem is supporting foreign nationals and students studying abroad with cross-border repayments. In cases where students cannot settle their loans from an account based in the institution's country, or their local account has insufficient funds, payments need to be made from a foreign bank account. These transactions come with regulatory and compliance requirements that delay payments and foreign exchange rates that increase the cost of sending money.
Cross-border payment partners like Klasha and Flywire address these gaps by providing easy cross-border payment solutions that simplify international payments. To achieve this, they need local partners to collect and disburse into local bank accounts quickly and efficiently.
How Stitch can simplify local settlement in South Africa
Stitch can enable institutions to receive funds from South Africa and settle them into a local bank account through seamless local payouts.
Work smart, not hard
Managing funds in the education sector requires accurate and transparent payments to be executed reliably, at high speed. Contact Stitch to see how our payments platform can improve your finance operations and enhance service delivery.
Improve your finance operations and enhance service delivery
