In a country where seeing physical cash is becoming something of a surprise, China is truly leading the world when it comes to financial technology (fintech). eduFair found that 78% of top universities globally are now using fintech services to accommodate changes in the way international students pay. Here we take a look at what fintech actually is, how universities are incorporating it and the future of fintech within international education.
Fintech in China
Fintech in China is largely focused on mobile payments – using your mobile phone to pay for items online or offline. As of early 2018, the two largest payment platforms – Alipay and Wechat – had a collective market share of over 92% . Alipay boasts 520 million users while Wechat (which is also used as a messaging platform) has 902 million.
China's rapid adoption of fintech now means that young Chinese citizens pay for nearly everything using their mobile phone – from subway rides to movie theaters to supermarkets.
Why? The most frequently cited reasons for usage are:
It's quick- scan a code, give a finger print (no loose change),
It has less restrictions and is more secure than cash,
It's convenient- no need for a wallet/purse with cards.
How are Institutions Incorporating Fintech?
Universities have started to utilize fintech in two ways. The first being online for tuition fee payments and the second for on campus payments.
Some institutions have been quick to incorporate fintech on campus. The University of Oklahoma, for example, have adopted domestic fintech in the form of Apple Pay at all campus terminals. The University of Toronto is accepting Alipay at its bookstore. Though accepting Chinese fintech on campus is rare, it is a lot more common when it comes to international tuition fees.
For tuition fee payments, Chinese fintech has been incorporated by international fintech services. Examples of some of these international fintech providers for tuition fees include Western Union's Global Pay, Flywire, Pay to Study, Ingenico and Cohortgo. They allow Chinese students to pay tuition fees via bank card or other Chinese platforms like WeChat and Alipay and are currently used by 78% of the top universities across the world we sampled.
These international fintech services offer the convenience of accepting numerous types of payment methods from most global financial institutions, including Alipay/wechat. Naturally, costs do occur. Though, for their part, the costs incurred by students are fairly transparent as most of these services allow students to compare rates for different payment methods and make the choice that best suits them.
Future of Fintech in International Education
Given it's domestic maturity, Chinese fintech companies are now looking abroad to international industries with high numbers of Chinese customers to accept the payment. One industry where this has taken off is within airports. In the last 18 months, airport duty free stores have seen rapid adoption of the systems. Qatar Duty Free for example reported a 92% growth in revenue from Chinese tourists after accepting Alipay and Wechat payments during the first three months of 2018.
Within international education, fintech's relatively young user base, globally 37% of 18-24 year olds regularly use the technology, and it's rapid growth is another reason for institutions to sit up and take note. With domestic and international student satisfaction a high priority for all institutions the full adoption of these technologies seems inevitable, the only question is when.
Fintech Resources for International Institutions for Further Research
On Campus/Tuition Fee Solutions (Chinese fintech)
Tuition Fee Solutions (International fintech services)
Western Union's Global Pay
Pay to Study