Universities Spending Millions on Card Transaction Fees for Foreign Students
United States universities could be spending as much as $285 million on credit card transaction fees when processing payments from international students, according to recent research from Western Union.
On top of these monetary costs, Western Union found university employees are using eleven and a half hours each week to match, process, and reconcile international student payments, which is the equivalent of 43 business days a year.
Last year, the number of international students studying in the United States surpassed one million for the first time, and universities are trying to figure out how to deal with the transaction costs and administrative burdens. Western Union’s research, which surveyed 100 finance and admissions teams at universities across the country, found 44% of respondents said transaction fees were the biggest challenge their institution faced when processing international tuition fees. 35% said the time required to process payments was the largest hurdle.
According to Western Union, many admission teams fear their institutions are not doing enough to prep for the influx of international students. In fact, 21% said their institutions are not fully prepared to accept payments from international students, and despite the growing popularity of e-wallets, only 10% of the respondents said their institutions can accept these forms of payment.
“Managing payments from international students can be a complex and time-consuming process for U.S. universities,” said Western Union President of Global Payments Jean-Claude Farah. “This new research shows the real challenge faced by universities and colleges. In addition to the charges they may incur, many also lose valuable staff time matching and processing payments made by a variety of methods depending on the student’s country of origin. With funding and resources an ongoing concern for universities across the U.S. and international students becoming a more significant income stream, having access to an efficient and cost-effective process to accept payments from around the globe has never been more important.”
To help combat this problem, Western Union has introduced an enhanced GlobalPay for Students platform, which makes it easier for both students and institutions to process international tuition payments.