Students studying abroad face multiple challenges, but one of the biggest pain points they often face is converting money into the new country’s currency. Setting up a bank account to complete the process traditionally took days, however, the development of fintechs means cross border platforms can be made faster, safer and more secure.
Analysing the covid-19 impact on students studying abroad is Tony Gao, co-founder and president at EasyTransfer, the online tuition payment services platform for international students, trusted and used by 200,000+ students and families, with over $2billion in annual transaction volume.
Speaking to The Fintech Times, Gao analyses how fintechs can work in tandem with banks to alleviate students’ stress; saving them time and in some cases money:
In the midst of the covid-19 pandemic, the 2020 academic year was one of the worst experiences in recent record for students studying abroad. Through limitations on the number of flights, visa issues, and government regulations, students desperate to complete their curriculum still had to take online courses and struggled even more with making payments to overseas universities – complicating an already complex process.
As many Chinese international students were in China at the time of the outbreak or had returned to China because of the pandemic, it was difficult for them to access their overseas bank accounts and they had to find a way to pay tuition fees from within China.
As students began to return to campuses this year, many universities have focused on providing students with more assistance and support during and post-covid-19. Foreign students – including the upwards of 700,000 Chinese students who choose to study overseas every year – also turn to private sector services to smoothen their experience living abroad. In these circumstances, developments in fintech – a tech sector relatively unaffected by the pandemic and possibly even boosted by the increased need for digital financial services – has been undoubtedly beneficial to students, offering them a safer and easier method to pay tuition fees or access funds overseas.
Two key industry leaders include China’s EasyTansfer and US-based Flywire, which help students and their parents navigate cross-border transfers through simplified procedures with strong security, ‘know your customer’ (KYC) regulations, and transparent exchange rates. Flywire, for example, eliminates operational challenges and reduces processing fees so that users can safely make domestic or cross-border payments in more than 140 currencies.
Such fintech services also, crucially, automate cross-border transfers as regulatory compliance is built into the system from the start, which means students are not required to navigate the rules of the road alone. In China, overseas transfers of $10,000 or more by individuals need to be reported at local banks, and Chinese nationals are subject to an annual foreign exchange limit of $50,000. Fintech platforms like EasyTransfer help simplify this process by automating the exemption process to bypass these quotes through collecting all the user’s credentials and proof of payment. This automation enables the platform’s users to make compliant cross-border payments without being subject to these personal quota limits and without the need to visit offline banks.
Students’ data are kept secure as payments are moved online – EasyTransfer obtained the highest level of National Information System Safety and Protection Certification for corporate institutions from China’s Ministry of Public Security and also works with the China State Administration of Foreign Exchange. The company provides AML and anti-fraud services for education payments behind internet/mobile bank apps.
Providing services to over 500,000 users and handling $2.2billion in transactional volume, EasyTransfer has at its disposal a very large and growing student/user data pool that allows for the most accurate and constantly improving machine learning capabilities to quickly verify accounts, ensure payment compliance, identify issues, and raise red flags. Uncertain, suspicious transactions are flagged to the EasyTransfer anti-fraud and compliance teams for manual review.
Through faster KYC and quicker compliance reviews, both EasyTransfer and Flywire Fintech platforms allow funds to be transferred in minutes – as opposed to traditional financial institutions, including banks and international clearing institutions like Western Union, where the manual process can take hours and at high volumes can take multiple days.
To ensure that they handle customer data properly, these fintech platforms follow some of the US’s strictest protocols like an annual Payment Card Industry Data Security Standard review and an SOC 2 audit developed by the American Institute of CPAs. The platform also employs vertical-specific insights and technology that enables organisations to optimise the payment experience for their customers while eliminating operational challenges, from invoicing to payment reconciliation.
The fintech revolution has also changed more generally how foreign students can bank once their funds are transferred overseas. Gone are the once routine long waits at a foreign bank to open a new bank account; also gone are the up to two-month wait for the account to become operational. In their place, students can open an account in hours through new online banks like Monzo Bank in the UK.
Banks like Monzo follow traditional banking and anti-money laundering regulations, but they are also far faster and easier to navigate as their operations have moved entirely online and can be accessed via an app. When used in tandem with online transfer services like EasyTransfer, which can move funds from apps like China’s UnionPay QuickPass App or WeChat Pay mini-program, paying school fees and banking are major things students can cross off their list of challenges.
These kinds of fintech services are revolutionising banking for a generation of students who have grown up as both digital natives and global citizens who can easily move between living abroad and at home.