Most people know that China is the world-leading supplier of students studying abroad. As of 2017, a little more than 600,000 Chinese students left the country to pursue their education overseas. Currently, there are about 1.5 million Chinese students enrolled in overseas higher-education institutions and, over the last 20 years, almost 5.2 million have ventured abroad for schooling.
However, while China is undeniably the largest market for students studying abroad, India is coming up quickly for second place. At this time, there are about 500,000 students of Indian origin studying in 86 nation’s worldwide, though about 55 percent of them are in the U.S or Canada — and that number is growing quickly, increasing by about 12 percent between 2016 and 2017. In fact, that growth rate is faster than the 11.74 percent increase reported by China during the same time period.
Ryan Frere, VP of global payments at Flywire, told Karen Webster that India, given its large and rapidly growing population of students looking to secure education away from their home country, is — obviously — a hugely important market for Flywire, one in which the company has been deeply invested in to improve the payments process.
As of this week, Flywire is officially announcing that it has found a simpler way for Indian students to pay tuition fees to global universities. Leveraging the framework established by the Reserve Bank of India (RBI), and working in conjunction with Deutsche Bank, Flywire is rolling out a digitized and automated way to collect and distribute Indian rupees for student fees.
“It’s much, much more streamlined than the old process was, and we couldn’t be more excited,” Frere said.
An Improved Process
The old process, Frere noted, was heavily weighed down with cumbersome paperwork and declarations that were a standard requirement for transferring funds abroad from India. The new process with Deutsche Bank basically scraps all that manual gathering and submitting, and replaces it with a method to fully digitize and automate the submission of documents and declarations.
It was a complex process, Frere added, because Flywire needed to go down a somewhat unique approval path with RBI, related to this fund flow and the opening of local accounts in the market. It’s why, he noted, Deutsche Bank was a natural partner in this effort.
“One of the reasons we worked with Deutsche Bank [is] because they have built some really great tech around the [anti-money laundering (AML)] process. They have made it more frictionless and directly connected into the Indian ID system,” he said.
That is crucial, he explained, because it means students can now opt into Flywire, enter their PAN ID — through that information, the bank has access to whatever information they need to process all the paperwork involved — and transmit funds. In addition, students are allowed to take on loans, then transmit them through the Flywire platform (though Frere noted there are some limitations around this). Flywire makes sure those loans come from state-backed or large and reputable banks in the market.
“India is a market where a fairly high percentage get loans to go and study overseas,” he said, “so it is definitely something we support. We just make sure to put in some extra controls to be sure of where the money is coming from.”
The Global Picture
India is a unique market, Frere and Webster agreed, particularly in the two or so years since demonetization became the law of the land. He noted that the country has made massive leaps and bounds over the last few years, specifically in regard to its national ID and biometric authentication pushes, both of which have allowed for Flywire to push forward in market with a solution like the one it is rolling out.
This is unusual in the world at this point, he added. There is nothing out there quite like what India is doing or has done — yet.
“When I talk to bankers and regulators in other markets, I nicely remind them that India has moved quite far forward with this,” he said. “I’m not seeing anything like this model out there today, but I would not be surprised if larger markets are paying attention to this, and at least considering how they can start following along.”
For Flywire, Frere noted, its mission at base is not going to change. The firm has, thus far in its existence, processed over $8 billion for over 1,400 clients in education, business and healthcare. The goal in tuition, as in the other area it serves, is to take the “global” out of global payments. Payors in one nation should be able to make their big-ticket tuition payment anywhere, and have the payment go through just as easily and transparently as it would if they had paid it in their nation of origin.
It’s a big goal because it’s a big world. Fifty-five percent of those half-million Indian students studying abroad are coming to North American shores to study in the U.S. or Canada, but there are 84 countries to which the remaining 45 percent is headed. They aren’t the only ones, though: There are those 600,000 Chinese students, not to mention the millions of others all over the world, looking to educate themselves on the world stage and hunting for a payment method to make that work.
That means, according to Frere, now that its latest and greatest in India is up and running, Flywire is back to building in an effort to connect every other place.
“We are looking at Latin America and Africa hard right now,” he said, “and we keep digging because this isn’t about serving the 10 main corridors of international education, or even the next tier behind that top 10. This is about really going global, and finding ways to fit these complex spaces.”
Source: https://www.pymnts.com/news/faster-payments/2018/flywire-india-student-loans-study-abroad-tuition/