Education in the digital age: the adoption of digital payments
Education in the digital age: the adoption of digital payments
Education is constantly evolving, and recent years have witnessed a remarkable shift driven by technological advancements.
In 2020, online education took centre stage, accompanied by the rise of educational subscriptions, micro-courses, and digital learning platforms.
Coursera, for example, witnessed a 66% increase in its user base while EdX saw a 161% year-on-year growth in new users. This surge in popularity can be attributed to the flexibility of online learning, enabling people to engage with educational content at their own pace, without committing to lengthy traditional courses.
Today, the demand for personalised educational content is higher than ever, and digital education platforms are stepping up to meet this expectation. These online platforms empower people to select courses that align with their interests and work through them on their own terms.
Micro-courses, which focus on niche subjects, have also surged in popularity. According to research by Technavio, micro-courses will become the dominant form of digital education by the end of 2023. Their appeal lies in their ability to deliver engaging, cost-effective, and diverse learning experiences.
Consumers spending and learning habits
There has been a substantial shift in people’s attitudes towards spending and many have become increasingly careful about how they pay.
The demand for touchless payment options and services has increased and many people are now looking to spread costs with Buy Now Pay Later (BNPL) or subscription-based options that allow them to pay in instalments.
Educational institutions have been keenly attuned to this technological shift. COVID-19 had a detrimental impact on education and many parts of the world saw school and university closures that lasted over a year, leading to the rapid adoption of remote learning platforms.
Outdated methods of collecting tuition and fees were eradicated and educational institutions turned their attention to seamless, automated payment services. Now, digital technology is making the educational payments process more streamlined and secure for all parties involved.
The benefits of digital payments in education
By embracing digital payment solutions, educational institutions can ensure the prompt and efficient distribution of funds through digital channels. A significant number of students rely on financial assistance and cannot afford to wait weeks to receive funds in their bank account.
Digital payments provide a speedier disbursement system, with certain methods enabling instantaneous fund transfers.
Moreover, by providing students with diverse payment alternatives, educational institutions enhance accessibility to education.
"Digital payments provide a speedier disbursement system, with certain methods enabling instantaneous fund transfers”
This empowers students to select payment methods that align with their preferences, whether it involves utilising Buy Now, Pay Later (BNPL) options to stagger expenses or opting for a subscription model that facilitates regular small-scale payments. The availability of interest-free payment choices can lead to heightened enrolment among individuals from underserved, low-income communities.
In addition to providing students with their preferred payment methods, research demonstrates that that offering these choices enhances the likelihood of timely payments—an advantage that resonates strongly with educational institutions.
How can educational institutions adopt digital payments?
While 71% of consumers still prefer to pay with a debit or credit card, there’s been a significant rise in the use of digital payment systems in schools and universities globally. Yet, according to a survey of 1,200 enterprises by ACI Worldwide and Ovum, less than one-third (29%) of colleges and universities are considered advanced when it comes to accepting APMs. This poses a significant disadvantage for students hailing from economically disadvantaged backgrounds or pursuing studies in foreign countries, as they encounter barriers in accessing payment avenues that align with their requirements.
Considering the escalating prominence of digital payments and the proliferation of diverse payment options, educational institutions must proactively align themselves with current trends. Modern payment methods hold significant appeal for students, as evidenced by studies indicating that Gen Z individuals display the highest willingness to embrace alternative payment avenues, with 79% having done so in the past year alone.
Furthermore, both Millennials and Gen Z are widely united in their belief that mobile wallets have the potential to effectively supplant traditional digital payment methods. Given that Millennials and Gen Z constitute the bulk of the student population engaged in transactions, it becomes imperative for educational institutions to and cater to students' payment preferences.
Below are three ways that the education sector can integrate digital payments: Real time risk and approval processes which integrate the latest payment methods, like BNPL
- Digital Wallets: Students are actively seeking alternative banking solutions. Digital wallet payment options like PayPal, Apple Pay, and Google Pay presents a seamless means for students worldwide to settle payments for their online educational pursuits.
- Buy-Now-Pay-Later (BNPL): BNPL has the potential to render education both financially feasible and inclusive. This method is a substitute to securing loans with interest rates, be it through governmental bodies, financial institutions, or educational establishments.
- Education Subscription Models: E-learning modules have garnered substantial popularity among students for their continuous learning and career advancement endeavours. Some educational institutions have harnessed the power of subscription-based frameworks and online course platforms such as Udemy and Coursera grant students the option to access educational content through a monthly subscription, negating the need for individual course payments.
