Specifically, the payments software that processes and handles all campus payment-related items, including one-time payments, tuition payment plans, authorized users, eBills, 1098Ts, etc.
Outdated and inefficient payments software can create budget-crushing gaps. What’s more, shifting student payment preferences are forcing schools to modernize their payment offerings. Consider the following, uncovered through our 2020 ACI Speedpay Pulse survey:
- Consumers paying at least some of their bills through automated recurring payments has increased from 55 percent in 2019 during this same period to 62 percent in 2020
- Mobile wallet usage has doubled in the last year, with 7 percent of consumers having used a mobile wallet in the last 12 months to pay a monthly bill
- More consumers prefer digital billing statements (48%) to paper billing statements (25%), or a combination of digital and paper statements (27%)
- For those who do prefer digital options, the most popular reasons include convenience (50%), speed (48%) and simplicity (43%)
Meeting these preferences will come at a cost, further forcing schools to derive maximum value from their payments software. Here are a few key areas schools should focus on to put money back into their budgets.
With both students and payers looking for any way to save, schools can deliver a win-win by lowering service fees to payers. Historically, service fees have been on the decline. Ten to fifteen years ago, the average fee for a card payment was 3.5 percent, while today that number stands at 2.75 percent. If your students, parents and payers are paying more, they are paying too much.
Filling this gap means finding a payments partner that is willing to be creative and flexible enough to offer more ways to pay than just card and ACH, such as Apple Pay, Google Pay, PayPal and Venmo.
Software and maintenance fees
Another budget buster can be found in settlement fees. Today, most schools settle multiple batches for cards and ACH transactions. Though this has been done for years, it’s now an outdated mode of settling payments. Schools should look for payment partners that offer integrated treasury management, which saves colleges and universities time and money with faster reconciliation and next-business-day settlement of all transactions and payment types (e.g., cards, ACH, etc.).
Furthermore, colleges and universities nearing their contract end dates must take advantage of this opportunity to explore new payment partners. This process can help higher learning institutions uncover significant cost savings, especially during the RFP process where software and maintenance fees can be negotiated.
This is also an opportunity to gain exposure to new, more efficient technologies. Schools that create healthy competition for their business will be well-positioned to derive more savings and enable a better student payments experience. The initial transition may be challenging; however, the right payments partner will make it easier to implement new technologies, ultimately resulting in a better outcome for all.
To find out more about consumer payment trends, read the ACI Speedpay Pulse: Billing and Payment Trends and Behaviors