April 29, 2020
This generation of Chinese students are considered the most tech savvy, however many are finding it difficult to pay their university tuition. This causes stress and discourages students from studying abroad. Considering the fact that Chinese students now represent more than 10% of all revenue at British universities and that 31% of non-EU students come from China, this is not a problem they can afford.
When it comes to paying for university fees, Chinese students are faced with quite a few obstacles.
First of all, international payments offer an issue of language barriers for many Chinese families and students. Their small neighbourhood bank won’t offer them any guidance, and most likely won’t know how to make international payments. On top of that, many families end up having to fill out forms in English with complex and confusing terms – not ideal for families who most likely will be using translation apps to understand the documents.
Second of all, families are worried about security. Did the payment go through? Do they meet the requirements? Families want to be able to track payments easily, which may not be possible when using several platforms and middlemen.
Third of all, international bank transfers can come with hefty fees. This means that parents spend a lot of time researching the best way to get value for money. They may end up buying pound sterling when the exchange rate is favourable, holding onto the money in their currency, and then making the transfer when the payment tuition window opens. Not a very practical solution for anyone involved.
Finally, universities are not adopting a standard approach. Many don’t communicate effectively how to make an online payment and what their preferred payment method is. The variety of payment options means that only 5% of Chinese students pay their first year tuition fees online.
As we can see, these obstacles make international transfers a complex process, one which may deter students from attending universities abroad in the first place.
The key solution for universities is to adopt a standard approach that accepts payments from China. One payment solution for this is to use Alipay, a popular digital wallet for Chinese students.
50% of mobile payments in China involve Alipay, with over 40 million merchant locations used. Mobile payments with Alipay use QR codes and mobile phones, a system which is not highly adopted in the UK yet.
How does it work? It functions just like Paypal, where a user sets up their own digital wallet and then links their debit card. You can send money to your e-wallet and then use the digital wallet to pay in-store or online. The big difference is that it uses a system of QR codes to initiate and complete payments, as this is more secure than traditional methods.
This is the most popular payment method in China, one which offers British merchants and institutions a standard approach to receive international transfers from China.
In order to start accepting payments with Alipay, British institutions need to set themselves up as an “Alipay merchant”. This can be quite a long and arduous process which involves getting licenses, approvals and understanding the ins and outs of Alipay.
That’s where Pomelo Pay comes in: as a licensed and approved Alipay partner, we can help businesses and organisations accept Alipay as a payment method. This means British institutions can simply add Pomelo Pay to their payment system and start accepting Alipay transfers. No approvals, no licenses; just a small transaction fee from our side.
There are several other benefits to using Alipay. First of all, Chinese families are more likely to pick a university that offers a seamless payment experience. Since Chinese students pay more in tuition fees, this can make a big difference to a university’s balance sheet. Second of all, this type of payment process reduces the likelihood of late payments, since parents can easily make a transfer that arrives in the UK that same week.
Finally, another great advantage is that Alipay itself can be used to market products and services. Alipay acts as a marketplace, allowing users to order food, buy plane tickets and have conversations with friends. British institutions have the option to advertise themselves on Alipay, just like with Facebook. They can also use AliPay to market their own bars, cateens and cafes. By using Pomelo Pay, universities can accept Alipay payments offline at several venues on their campus. With over one billion active users on Alipay, this opens up huge opportunities for British universities to start accepting more Chinese students.
By using Pomelo Pay to accept Alipay bank transfers, British universities can finally catch up with the Chinese banking system. Not only does this mean a better payment system for current Chinese students, but it offers a huge amount of opportunity for institutions to use Alipay to attract more foreign students and therefore increase their revenue.
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Vincent Choi, CEO of Pomelo Pay joins the FinTech Magazine Podcast to talk about contactless payments, the importance of QR codes and the impact of the pandemic and Brexit for the fintech industry.