Flywire braced for disaster last year when the pandemic struck, with millions of foreign students canceling their academic plans indefinitely.
Payment volume immediately plunged for the cross-border tuition payments company, but as time wore on colleges seeking contingency plans in the uncertain environment actually brought new customers to Flywire.
Though Boston-based Flywire also processes payments in health care and other industries, cross-border tuition payments account for about 65% of the company’s payment volume. That sector added the most new customers last year, according to CEO Mike Massaro.
Flywire added more than 500 new customers in 2020, including many colleges and universities coping with canceled and delayed payments, with a skeleton staff as some higher-education offices cut headcount, according to Massaro.
“Under the circumstances where university tuition staff were working remotely to develop contingency plans for students, a lot of them took the opportunity to finally go digital,” he said.
Flywire’s staff also shifted to remote work, leading to further streamlining of its own processes for the pandemic that Flywire has permanently incorporated, Massaro said.
One of the challenges Flywire faced was the lack of consistency from one college to another during the pandemic, among the 32 countries where Flywire supports tuition payments.
“Almost every school and government organization around the world had different policies for handling deferred classes and tuition, and various regions took different approaches to remote or in-person learning, creating a tremendous number of variables,” he said.
The majority of tuition payments Flywire enables flow on banking rails, with the remainder on credit cards, and that didn’t change during the pandemic.
Most tuition payments are larger amounts, but for smaller deposits families often use Alipay, PayPal or Venmo, Massaro said.
Although the number of international students coming to the U.S. shrank by about 2% over the last two years while Canada and Australia each saw double-digit growth, the U.S. remains the top destination for international students, at more than 1 million a year. China, India and South Korea send the most students abroad.
When the pandemic hit, some foreign students who were already in the U.S. in 2020 stayed put because time zones made remote learning inconvenient from their home country, Massaro said. Some universities in Asia, including in Singapore, Malaysia and Japan, stayed open, according to Massaro.
In the U.S., top-tier schools saw some students defer enrollment for a year, but many saw little drop-off in attendance despite classes shifting from in-person to remote, Massaro said.
“Mid-tier state schools with a big on-campus base saw a lot of students defer enrollment from 2020 to 2021,” he said.
A factor that drove more schools to sign up with Flywire during the crisis is the worry that any institutions that failed to deftly manage tuition payments, returns and deferrals during the crisis could lose business, Massaro said.
“If a school doesn’t execute well in managing classes and tuition payments over the next six months, they’re going to risk seeing students moving elsewhere,” he said.
Early foreign college tuition payments for the fall of 2021 suggest that the next academic year will see a surge, as vaccinations become widespread and students are expected to return to campuses around the world, Massaro said.
“At this point in the year we’re usually seeing very strong signals for the upcoming academic year, and so far it’s looking even stronger for 2021-22 than last year did before the pandemic began,” Massaro said.
Flywire has also responded to another payment trend that’s seen growth during the pandemic — the rise of installment loans.
In the health care and travel sectors that make up the remainder of Flywire’s business, demand for installment payments is rising, and many universities also structure tuition payments around installments instead of lump-sum payments, according to Massaro.
Though Flywire doesn’t lend money, its platform enables its B2B customers to extend different payment terms, adjustable to any date.
“We’ve been evolving flexible payment options for the health care industry over the last three years, and we’re seeing more demand for this model across the board, which isn’t a surprise given the global scope of the pandemic,” Massaro said.
Source: https://www.paymentssource.com/news/how-flywire-survived-when-cross-border-tuition-payments-crashed