- Why TransferMate
In a sentence: Transact Campus was looking for a white-label solution that would allow their university clients to offer a seamless, transparent and cost-effective way for international students to pay for tuition.
Transact by the Numbers:
|12 million||$45 billion||1,750||38+ years|
|Students served||Transactions facilitated||Education institutions partnered with||Of higher education focus|
Times have changed a lot since Transact Campus started specializing in the higher education market 38 years ago. It wouldn’t be until nearly a decade later that student campus ID cards were introduced in the US, and a digitally integrated campus was just an ambition for education administrators.
Transact has been at the forefront of the dramatic change we see today in how students engage and interact with their campus and the university itself.
They were the first to work with Apple and Google to integrate a contactless student ID credential on smartphones and watches so with a tap of their phone, students can make purchases or securely access dorms and classrooms.
Transact helped pioneer campus commerce through point-of-sale and mobile ordering. On top of that, Transact Integrated Payments solutions – focused around tuition and fees – was aimed at making campus payments a seamless experience for the students and their families.
The challenge for Transact was bringing this frictionless and transparent experience of tuition payments to international students wanting to study in the U.S. Previously, international students would have to leave the Transact ecosystem to make a payment, meaning the data was split between two systems – both for the student and the the school administrator.
“The payment would initiate through our system, but we would then have to hand it off to a second provider” said Laura McLaughlin, Executive Vice President, Transact. “So, we wouldn’t know if the payment actually went through. It meant a lot of follow-up with the second provider asking for reports and manually reviewing spreadsheets to confirm the payment was processed. Basically, a lot of reviewing and reconciliation.”
What’s more, the old system meant international student payments were subject to high banking fees and significant FX (foreign exchange) charges – something Transact wanted to eliminate for the students.
Utlizing TransferMate’s global payments infrastructure and technology, Transact is able to co-create a fully integrated international payments solution. Through API integrations, TransferMate sat in the background as a white-label solution. For the students, this mean they no longer had to register and use two separate systems to make a payment. This meant a lot of positive changes for the Transact team.
“It’s really painful to have to reconcile payments from two different systems and there is a lot of follow-up involved. Sometimes, because the systems weren’t fully integrated, the student would overpay which causes its own administrative challenges. It could become a painful process. And we thought, “We’re in the payment space. This is what we do. We facilitate over $45 million dollars annually. How can we make this process easier for our clients?”
So, Transact engaged with TransferMate to create a bespoke API integration that would solve these issues around international student payments. The result was ‘Transact International Payments’ which provides Transact’s university partners a streamlined way to accept international tuition payments in multiple currencies.
“The building and implementation of the API solution went really well. We learned together as we went, and we both had to develop things on each side to make it work. In order for us to succeed, we needed to have a trusted partnership, be transparent with each other, and agree fully on the timeframe for implementation. I think it was a great partnership because we both had the singular focus on getting this up and running, making it really attractive and seamless, and solving those pain points for our clients.”
The backbone to the system was the global payments infrastructure TransferMate had built up over many years. By obtaining banking licenses in over 90 countries, they allowed the Transact International Payments solution to process payments from 201 countries and 141 currencies.
Leveraging this infrastructure, the API integration was built to match Transact’s system and the requirements of their finance team, making the whole process seamless for all stakeholders – from the students to the universities and for Transact itself.
And, because this global payments infrastructure didn’t use the traditional banking system to process international student payments, which often means the money travels between several different banks and third-party entities (each charging a fee), the cost to the students of making the payment was significantly reduced.
As the money moved through a single system, this also meant transparency for everybody was increased dramatically. The student, university and Transact could see when a payment was made, when it was accepted, and any steps in between.
“I think we have taken the friction out of the process for our university clients and have made it a lot easier to see transparent payments through a singular system. We now fully understand and can track where that payment is, and when it’s coming in. And transparency extends to the students and their parents, particularly in making it easier to what their options are, and not have a disparate experience between multiple systems. I also would say that the economics have been beneficial for students.”
The Transact International Payments solution has been welcomed enthusiastically by the university community, solving some long-held problems in the tuition payments process.
“It’s clearly evidenced that we’ve solved a real pain point because, even though we’re in relatively early days, we have over 100 schools signed up for the Transact International Payments solution and only in a few short months. Our clients clearly see the value and benefit to themselves and their students.”
While the breadth of the challenges was significant – by delivering a more transparent, cost-effective, secure, and seamless experience for campus operations and students – all the objectives have been met through the partnership.
“We needed to ensure we had the international reach for this to be effective for students. With TransferMate’s global footprint, we were able to not only offer the service to the top 10 countries with students coming to the United States, but countries with smaller populations as well. The cost factor was critical for us too. We needed to be sure that the service was really competitive and the most economical choice. Finally, we really wanted to work with somebody that we felt we could have a true strategy partner, not just a– we weren’t looking for a vendor. It was really important for us that we worked together, that there was longevity in the relationship, that there was trust in that relationship, and that we had ease of working together.”
“I definitely would recommend TransferMate. They are easy to work with, transparent on how things are going, and from a project management perspective, we’ve had unbelievable support in getting things done. At the end of the process, we’ve been able to build something great that will benefit students and universities alike – you can see that from the take-up.”Laura McLaughlin, Executive Vice President, Transact
To join the 100+ universities that have taken advantage of the Transact International Payments solution, click here to request a custom demo.
In a sentence: American College Dublin were spending too much time tracking and managing payments – they needed a system that would bring significant time savings for the finance team. They got even more.
The American College Dublin (ACD) is located in the birthplace of Oscar Wilde. Across the street, a statue of the great writer sits relaxing on a giant stone, looking across to where he spent his youth. In the tradition of their former resident, American College Dublin is primarily a liberal arts college.
Rather than being a place for Americans to study in Dublin, the ethos behind the university was to bring that liberal arts style education to the students of Ireland. Over the years, it’s grown both in size and reputation, and has indeed become a place for international students to come to Ireland and study. In recent years, Buzzfeed listed it as one of the top-five best places to study abroad.
The challenge for American College Dublin when it came to their accounting process was two-fold; 1) tracking and managing payments from across the world, and 2) their strategic plan to expand globally.
Simply tracking the payments was a struggle, leading to significant administration time being spent on tracking the source of payments and where they were in the banking system. Secondly, the cost to the students of making the payments often led to a shortfall in the amount received into the ACD account, leading to further time being spent on follow-up with the student and also adding complexity to the reconciliation process.
“Our student body essentially breaks down into a third Irish, a third American, and a third from the rest of the world’ says Rowland Crawte, Director of Administration, American College Dublin. ‘A lot of the pain came down to tracking the payments. We’d spend an awful amount of time figuring out where payments came from, who was sending them, and for what. You’d have situations where you have a student whose uncle’s company is paying for them, or something along those lines. Trying to figure that all out from very little information was very, very difficult and time consuming.”
Another challenge came as American College Dublin was expanding its presence across the world, opening up a new college in Bulgaria. This meant the finance team needed a simple and cost-effective way to make and receive payments for the school.
“We also have a truly international faculty coming in to the school – composers from Japan, America, Italy, South Africa, and many more – which meant we had to set-up an easy way to pay these people, and not to be too concerned about where they were coming from. We wanted to focus on the quality, not the process.”
The final challenge was the visa process for students – usually requiring proof of payment of the tuition to be granted. In the past, as the process was slow and time-consuming, any delays there would also mean a delay in the visa application for students. This again led to more administrative support being required to manage all the issues (and complaints) coming from these delays.
With TransferMate’s platform, American College Dublin were soon up and running with all the requirements they needed to solve their issues.
“Everything was very simple. TransferMate already knew how the approach works with international students so it was just a case of giving them our regulatory information needed to set-up the account. The actual technical implementation was utterly painless. It was basically 24 hours and we were switched over.”
The system itself made tracking and managing international payments so efficient that American College Dublin started using it to process domestic payments as well.
“It was so great having that one place where all the information lay. So, if somebody says “Oh, I’ve paid” I can simply log-in and within a few seconds I can see if they have. It’s no longer a case of me having to go in to look through one bank account or check the US bank account or anything like that – I just go into one system. It’s become our one true source! We’re not just using this for international students, we’re using this for all our payments. And it’ll make our lives a lot easier.”
The cost-effectiveness of the system was also welcomed by the team. As TransferMate’s payment rails don’t use the traditional banking system (where payments go through many intermediaries, each taking a fee for their services), and instead utilize the payment rails they have built themselves, the banking and FX fees were much lower.
“The old system was hitting our bottom line – there’s no question about that. We had tried many, many ways of doing this before TransferMate and we thought we had gotten the best rates we possible could. It was only when the TransferMate team explained how they operated that the penny dropped that there was this whole new way of doing this. At first, the decision was made on the basis of this – cost – but it’s really been the time savings that have made such a difference to how we work, and to our bottom line.”
The systems success in Bulgaria has also encouraged the team to further expand internationally.
“We have a couple of plans for courses that are aimed internationally. This system, again, allows us that option. That just wouldn’t have been that simple before.”
For visa applications, it hasn’t just sped up the process for students and made it easier for all parties, it’s helped the university proactively protect themselves against money-laundering schemes – a common threat when it comes to international tuition payments.
“It’s really helped us tighten up the security side. Before, we had requests from people saying, “Oh, can you transfer that back to my cousin in the UK?”, or something similar. With TransferMate, it’s very, very clear – you pay from this bank account, you are refunded to that bank account. Before we were chasing up on these things, now we’ve eliminated all that.”
It wasn’t just the finance team that benefited from the TransferMate system, it was the whole college.
“It’s increased the revenue of the college by about 3%, just purely on the savings we make on bank charges and credit card charges.”
The amount of time saved by the finance team was also very significant.
“In terms of processing time; I would say per payment we’ve probably knocked 20 to 30% off the amount of time that we would normally have spent chasing up those things.”
With the TransferMate system in place, the American College Dublin have added revenue to the bottom-line, saved substantial administration time on the payments process, enhanced the student experience, saved the students money, and added greater protection against fraud and money-laundering.
“I’d wholeheartedly recommend TransferMate. Besides the time and cost savings, and the better student experience it helps us deliver, the customer service is impeccable. If I have any issues – and there haven’t been many – there’s always a response. If anyone is thinking about it, I’d say start the conversation as soon as possible.”
Rowland Crawte, Director of Administration, American College Dublin
If you’d like to learn how TransferMate can save your university time and money when processing payments, get in touch with the team here.
There are countless areas that fintech has revolutionized how organisations make and accept payments, particularly cross-border ones (including U.S. student loan payments). The problem isn’t accessing these solutions, or using them, it’s hearing about them.
One niche that falls into this category is non-U.S. universities processing U.S. student loan payments – typically via a private lender, a public federal loan, or an army veteran loan. In our latest webinar, ‘The Faster Way to Process U.S. Student Loans’, our experts Aoife Walsh and Jonathan Church talked about how new solutions could save universities time, money and administration time by leveraging these methods, while also enhancing the student experience in the process.
Here, we break down the big takeaways from that session. To watch the full session, click here.
The traditional way of processing U.S. student loans via the correspondence banking system is cumbersome, expensive (for university and student), and time-consuming. As Jonathan Church explained, it’s based on centuries old infrastructure, especially when it comes to processing cheques.
No matter what lengths a non-U.S. university has gone to make the process easier, such as moving away from cheques and setting up U.S. bank accounts, they will still come up against problems. Aoife Walsh explains in more detail about why it’s such a difficult web to untangle.
Because of the infrastructure built by fintech’s over the last couple of decades, non-U.S. universities now have a genuine alternative to the traditional correspondence banking system. By utilising these local rails set-up by fintech’s, they can now process U.S. student loan payments quicker, at a lower cost and more transparently.
Much like the process itself, getting set-up with this new way of doing things is quick and easy. As Aoife Walsh explains, it’s a matter of taking a few simple steps and you’re ready to make processing U.S. student loans as a non-U.S. university faster and more cost-effective than ever before.
To find out how TransferMate can transform how you process U.S. student loans, click here.
Criminals are always looking for an angle. If they can find one that works again and again, they won’t just keep going at the same rate, they’ll pile on and ramp it up. When it comes to money-laundering schemes, using universities to launder ill-gotten gains has become evermore common as rules tighten up elsewhere.
Reports are emerging from around the world that illustrate the true scale of the problem. As this scale becomes more apparent, it is likely to seep into the public conscious, leaving universities that don’t have strong anti-money laundering policies and procedures in place open to transformative new legislation.
For universities that don’t take a proactive approach, they may find themselves waking up one day in the unenviable position of realizing a sizeable chunk of their revenue is from illegitimate sources.
The refund scheme is a classic of its type and works particularly well in the university financial ecosystem where refunds are common. It allows for a criminal to pay for tuition fees (or other associated university costs such as accommodation etc.) before canceling their proposed education and then requesting a refund from the university – thereby ‘washing’ the money through the university. The criminal will often recruit students to act as a “money-mules”, and the refund may be re-directed to the Criminal.
A 2019 report in Canada by the British Columbia Attorney General found many instances of this scheme. Agents and third parties were also commonly used as accomplices, collecting the refund on behalf of the ‘student’.
A sideline is wildly overpaying for fees and then requesting a refund for the surplus.
The same Canadian report found that in once case a student who was only required to pay a $150 dollar charge arrived at the college with $9,000 in a duffel bag and asked to deposit all of it with the college. They would then be able to withdraw the money later in the form of a check from the university, which on the surface would be a ‘clean’ source of money.
While we live in a largely digital economy, paying for university in cash is not as uncommon as you think.
An investigation by the UK Times in 2021 found that UK universities had accepted £52 million ($65 million USD) in cash for tuition fees. In a separate investigation in the same year found that UK universities (and boarding schools) estimated that there were £30 million ($42 million USD) worth of questionable payments made from West Africa.
Put simply, these cash payments are open for allowing fraudsters to money-launder proceeds from crime or bribery. While cash payments aren’t generally allowed for high-value purchases, such as houses, in the UK at least they are allowed to be used for tuition fees, which can be substantial in themselves.
In the UK and across Europe, a university receiving cash payments of €10,000 or more in single or linked transactions in exchange for goods or services may be classed as a “High Value Dealer” which may result in the need to report such transactions to the authorities.
“TransferMate Education works with universities around the world to reduce their exposure to cash-based payments while providing the student with several alternative payment mechanisms, and coupled with an industry-leading compliance system to detect real risk in real time” said Simon McFeely, Chief Risk & Compliance Officer at TransferMate.
Another potential for universities to be caught up in money-laundering schemes is allowing third-parties pay for a student’s tuition fees.
While this is not illegal (think of a generous benefactor hearing a person’s story and deciding to help them out) it again opens up the possibility of fraud and vulnerable students to act as money-mules. Corrupt officials – both in the public and private sphere – can also use the tuition fee to facilitate a bribe rather than directly accepting the money.
In countries where public officials earn relatively low amounts compared to tuition fees in major world universities, real red flags must be raised when third parties are paying for their children’s education.
While not a scheme in and of itself, universities need to include the potential for internal collaboration with fraudsters in their thinking. The schemes mentioned above can be carried out with the university as an unwitting stooge, or as part of a more elaborate scheme.
Secondly, ‘turning a blind eye’ can be just as dangerous in the long run.
If universities allow for fraud to happen by simply ignoring the issue and not proactively preventing or investigating it, they may well be caught out through changes in the law. This would mean an abrupt shortfall of revenue and becoming an existential threat to the institutions very existence, and this isn’t including the very real reputational risk they might suffer if money-laundering activities were found to be rife within their financial system.
As always, there is no silver bullet or impenetrable shield that prevents fraud. Once one obstacle is put up, fraudsters generally will find a way to circumvent it in some way. However, there are concrete steps universities can take to prevent from being used in money-laundering schemes.
An overall policy and philosophy for university leaders is to actively seek out proposed legislation around the world and implement it before it becomes a reality. While the laws may never tighten around university payments like they do around other institutions more closely associated with the financial sector, it is likely that they will be under more severe scrutiny than they currently are at some point down the road.
And there are existing laws. For example, in the United Kingdom, a university has a duty under the Proceeds of Crime Act 2002 to notify the relevant authorities if it suspects that its processes or services are being used to launder money obtained through criminal activity, and it is required by law to have a robust Anti-Money Laundering program in place.
No university wants to support criminal activity in any manner, nor be in the headlines, so from a brand and reputational standpoint, it makes good sense move away from cash-based payments not only to streamline the admission process but also to ensure that risk exposure is reduced through the use of a carefully selected payment partner.
Having a robust payment system with AML and fraud checks is one of the key (and cost-effective) ways universities can protect themselves against criminal activities in their payment processes.
Modern payment systems use the latest technologies to detect and prevent fraud before they go through the system. They also have the advantage of having a larger global footprint than many of even the largest banks, meaning they have embedded local rules in their systems when payments pass through certain countries.
“Our systems have very stringent checks on potential fraudulent payments’ said Simon McFeely, Chief Risk & Compliance Officer at TransferMate. ‘Universities can track payments end-to-end, know that they are checked against international sanctions lists, will be notified if any payment contravenes the AML checks we have embedded in the system, and have the highest standards of data security. Additionally, our sophisticated screening and monitoring technology applies to the student and the payer of the fees; we believe a first in the industry to do so.”
One of the best ways to deter a criminal scheme is to only refund cancelled tuition payments to their original source. In essence, this leaves the criminals back at square one.
Refunding to a different bank account, for example, can be another step in the criminal layering their ill-gotten gains and integrating it into the legitimate financial system.
However, there are genuine reasons why a refund may need to go back to another bank account, so it’s important to use a system with specific in-built rules that target criminal typologies to weed-out potential bad-actors.
Culture will always play a role in tackling money-laundering. Regular training will allow the financial team to spot obvious cases of potential fraud and raise concerns with more opaque cases.
In general, ignorance of the law is not a defense, and this is particularly true in financial crimes. Allowing a culture of turning a blind eye to money laundering can leave the university vulnerable to not only reputational risks, but legal ones too.
When you see how vulnerable universities are to money-laundering schemes, it becomes plain that more needs to be done. Without a proactive approach, these schemes will build to such a scale where the very existence of universities will be put at risk.
While criminals are good at finding angles, there should be few better institutions than a university to see those angles and counteract them with new and innovative solutions. After all, isn’t that what education is all about?
If you want to talk to our experts and discover how TransferMate’s solutions can protect your university from money laundering and fraudulent schemes, click here.
There are many ways cultures mark the beginning of adulthood. From religious ceremonies to a traditional rite of passage to a significant birthday, being designated a ‘grown-up’ is usually marked by an event rather than experience.
The real moments we become adults, however, is when we interact with the real-world on our own, and few are as impactful as when we experience the twisted logic of bureaucracy for the first time.
For U.S. students looking to study abroad, paying for their tuition through a private, federal, or veteran loan may well be one of those occasions. The labyrinthian process that a U.S. student loan cheque goes through is quite remarkable – travelling several thousand miles back and forth across oceans, passing through multiple hands and, unfortunately, losing value along the way.
We’ve talked before about the traditional correspondent banking infrastructure versus the modern payment rails being built today, and processing U.S. student loan payments is another area where the old system leads to more complications than is necessary.
We’ll specifically focus on cheques for this part, as it highlights the extremes payments have to go through, but even universities that have moved away from it and set-up a U.S. Dollar bank account still require elements like EIN and DUNS numbers, which is just one more layer of complexity to deal with.
Speaking of complexity, be prepared to read this next paragraph twice.
In the traditional way, a U.S. student can apply for a student loan to study abroad from three main places – private companies (such as Sallie Mae), federal loans, and army veteran loans. Once successful, the loan approver sends the cheque or bank transfer for tuition fees to the non-U.S. university in U.S. dollars. The non-U.S. university then converts that cheque into their local currency, sending it back to a U.S. bank for clearance, sometimes even needing to go to the specific branch, where it’s converted back to dollars before being sent back again to a local bank where the money is again converted into the local currency, such as Euros, British Pounds, Australian dollars, or whatever local currency is needed. At this point, the non-U.S. university must reconcile the payment as the amount is now different because of the bank charges the payment has incurred along the way, as well as the FX commissions charged during each conversion.
This leads to:
What’s more, it’s a slow process – often taking weeks and even months – leaving both university and student in the dark while the payment is making its way through this circuitous route. This can mean problems are only identified at the last minute, leading to more anxiety and stress for all parties.
This is essentially a result of a banking infrastructure built up over centuries that is not conducive to modern needs. As a result, banks themselves are now working with fintech companies to provide faster, simpler, and more cost-effective solutions.
The modern method of processing U.S. student loan payments bypasses many of the steps used in the traditional way. It utilizes modern payment rails and infrastructure to cut-out much of the complexity and expense of the old way, and significantly reduces processing time.
Here’s how it works.
The non-U.S. university sets-up a U.S. bank account with a fintech provider. Even if the non-U.S. university has to go through the KYC (Know your Customer) and onboarding process, this can be done within a few days. If they are already a client, it can literally be less than a minute to set-up a U.S. bank account. Then, the U.S. loan company pays directly into the non-U.S. universities U.S. bank account. The University can then draw down their local currency from that account.
This has significant benefits:
The reason this is all possible is that fintech’s, such as TransferMate, have acquired regulatory banking licenses across the world, allowing them to circumvent many of the third-party handlers that you’re required to pass through via the traditional banking network.
This means that less institutions handle the money (and therefore there are less charges and fees), the payment flow is transparent because you have full visibility over the payment path, and the time it takes is significantly reduced.
A core attribute of any ambitious university student is the desire to change the system they’re about to enter. Whatever issue they focus on, it’s how it can be changed that excites them the most. Unfortunately, systems have an innate ability to beat people down to the point where they not only accept it, but they also become active in propping it up through their working lives.
Making a tuition payment – particularly an international one – can be one of those first experiences of a system that will lead to a desire to change it. Fortunately, it’s already been done. It’s now a matter of implementing this new way so it becomes the norm.
And maybe, just maybe, we can put off becoming an adult just a little while longer.
TransferMate hosted a webinar, ‘The Faster Way to Process U.S. student loans‘, on Thursday, May 5th, 2022. You can register here to watch the on-demand recording.
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