Embedded finance for higher education is gaining momentum, especially with the rise of EdTech. Many colleges and universities are still adjusting to the aftermath of Covid. These schools are pursuing digital transformation initiatives meant to make the entire education experience more seamless from start to finish.
Payments transformation is an especially large undertaking, with numerous moving pieces that require adherence to many compliance requirements. Many colleges are dealing with outdated payments infrastructures. Others are trying to plot the best path forward toward innovation. PYMNTS’ data reports that more than 8 in 10 financial leaders at four-year universities are interested in offering tailored, flexible payment plans that meet individual student needs.
As students increasingly expect convenient, frictionless experiences, embedded finance may begin to play a bigger role in higher ed payments.
What are Embedded Payments?
Embedded payments fall under the larger umbrella of “embedded finance”, which is essentially the ability of non-financial companies to offer financial services. The point is for non-financial companies to provide frictionless payments experiences to their customers on their own platforms (websites, apps, etc.)
Higher education institutions are behind the curve when it comes to offering these types of innovative payments experiences, but they are catching up. For example, many universities have started to move to mobile student IDs. These IDs enable students to use smartphones, wearables, and other devices to make purchases and access campus buildings.
Other ways colleges and universities can make big moves in this area is to allow students to keep track of tuition payments and other financial information via online portals and apps.
Embedded Payments are Part of the Overall Digital Customer Experience
As with every industry, higher ed must continue to evolve payments and digital experiences to meet the needs of consumers. It’s a part of both attracting and retaining students and the overall value proposition. Digital payments are table stakes but schools should view this as an iterative exercise in improving experiences continuously. The goal should be to remove friction, add speed, and increase convenience at every touch point. Not only does this keep students, staff, and parents satisfied but it can enhance operational efficiencies.
As remote and virtual learning options have taken off in the wake of the pandemic, there are increased opportunities for universities and the EdTech sector to embrace embedded payments.
Regardless of the learning architecture of a school, the responsibility to optimize payments exists beyond just tuition payments. Students in hybrid settings must consider room and board fees, library costs, textbook purchases, on- and off-campus dining options, and more. Schools must carefully consider how to facilitate these payments, whether that includes third-party systems, in-house payment interfaces, or a hybrid approach.
The bottom line is that frictionless payment experiences are tightly coupled with a positive consumer experience. Schools must work to close the gap between the evolving expectations that students and families have around payments. This means rethinking the digital payments experiences they deliver for tuition, dining hall, books, events, and other payments.
If you’re considering how embedded payments fit into your strategy, contact Arrow Payments today for a free consultation. Our seasoned team of higher education payments experts can answer your questions and help you take the first step toward seamless digital payments experiences.