Travelex Global Business Payments Inc. is using new software to offer an online payment program designed to save U.S. universities time and money by eliminating manual tracking when various exchange fees cause an international student’s payments to be less than what is owed, the Washington, D.C.-based company announced Oct. 13.
The international payments provider acquired the Pay 24-7 online-payment software from United Kingdom-based ParentPay Ltd., Travelex said in a press release.
Pay 24-7 enables international students or their parents to pay tuition and other fees in full in their local currency as a local funds transfer to Travelex through the university website instead of through an international wire transfer, a Travelex executive says.
“Traditionally, if an international student wanted to attend a U.S. university, they would go to their local bank and do a wire transfer to the university, meaning it would involve multiple intermediary banks and be subject to high retail exchange rates,” Christopher Russell, Travelex executive vice president of Global Vertical Markets, tells PaymentsSource.
As the payment travels to the U.S., banks could apply even more fees because of exchange-rate fluctuations, making it possible the payment would be short of the amount the university expects, Russell says.
“We saw this cause huge headaches for university bursar offices, and even delayed student admission in some cases,” Russell adds. “Being able to pay in local currency as a local transfer from a bank card or account, the university is ensured of being paid the full amount.”
The Travelex network uses what the company calls dynamic currency-conversion capabilities to provide students with payment options in their local currency in more than 70 countries and with 135 different currencies, Russell says.
Besides making the payment process more efficient, Pay 24-7 provides a university with multiple payment-reconciliation options to streamline a process that traditionally calls for manual tracking if an unreferenced payment is received for less than expected.
Citing statistics from the International Institute of Education, Travelex states in the press release that the number of international students in the U.S. increased by 3% to 690,923 during the 2009/2010 school year. With that increase, university bursar offices dealt with more international payments, which traditionally take a long time to approve and tend to create more paperwork.
In using Pay 24-7, the universities receive payments within 24 hours through the Travelex network, potentially saving them $80,000 a year in processing fees alone, the company estimates.
“The application uses industry standard application interface technologies to securely move payment information between the university student finance packages and Travelex,” Russell says.
The university does not have to pay an extra fee for offering Pay 24-7 to students paying online because it is an add-on to the Travelex system, Russell notes.
“An increased number of universities using the Travelex product [because of Pay 24-7 being added on] will cover the costs for Travelex,” Russell says. “It is a huge benefit for the student in terms of making the payment easier and faster, while allowing the university better tracking and reporting of income tuition and other student receivables.”
Russell believes Pay 24-7 represents the most prominent cost-saving tool his company has offered to universities because there is no cost to implement the program.
One industry analyst says the online payment technology acquisition by Travelex indicates payment companies see an opportunity in offering an approach different from what banks offer to support international payments.
“The way they work is that typically, instead of executing each transaction as an international transfer via Swift and/or corresponding banking relationships, they maintain accounts at local banks in various different countries and execute the transactions as local transfers,” Zil Bareisis, a London-based industry consultant with Celent, tells PaymentsSource. “They then settle their accounts on a periodic basis, thus reducing costs and speeding up the process.”
The model works will in other situations and customer groups, such as small or midsize businesses, Bareisis adds.
“Students, of course, always represent an attractive target group given their potential for future relationships,” Bareisis says. “Many of the prepaid card providers have also been targeting them with similar propositions.”
Travelex Global Business Payments is part of London-based Travelex Holdings Ltd., which agreed in July to sell its business-payments division to Englewood, Colo.-based Western Union Co. (
Regulatory approval processes and agreements on closing conditions continue for the £606 million ($974.7 million U.S.) cash deal and are expected to be completed late in 2011, Lauren Walker, a Travelex spokesperson, tells PaymentsSource.
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