University fees are a source of concern, and often act as a huge hindrance, for much of the world’s international student community. Paying such fees often involves blindly using convoluted wire transfers from organisations such as Western Union and Moneygram, which invariably prove slow and extremely expensive.
A solution, however, exists in the form of US billing partner peerTransfer, which announced yesterday that it has raised $22 million in its latest major funding round to aid the expansion of its student finance services. These services allow students to pay their tuition and accommodation fees at more than 500 universities across the US, Canada and Australia both quickly and easily. Founder Iker Marcaide was inspired to create an alternative to existing international payment methods when he encountered delayed, costly processes while paying his tuition fees for MIT.
Through peerTransfer’s portal, which accepts more than 200 currencies in forms as diverse as Mastercard, Visa and Alipay, students and parents are able to make payments using the method of their choice. Once payment has been made, the company performs its own money exchange. So, rather than exchanging yen for dollars at the bank, students and parents can rely on peerTransfer to deposit their yen into an account in Japan and then withdraw the amount from one of its US accounts to pay the university.
Put simply, a UK student attending the University of Pennsylvania could pay their tuition fees in pounds to peerTransfer; in turn, peerTransfer would send dollars to the University of Pennsylvania. The student would incur a fee in exchange of approximately 1-1.5% of the money transferred, while the college would pay nothing. What’s more, the transaction would take place within 36-48 hours, unlike a standard bank exchange or wire transfer which can take at least seven days.
Managing Director at Bain Capital Matt Harris commented on the importance of peerTransfer’s goals to the education sector in an interview with PYMNTS:
“peerTransfer’s breakthrough was to design a payment scheme addressing the unique needs and business environment of the recipient- in this case, the educational institution. As a result, the risk, cost and complexity of the transaction is dramatically reduced for all the parties. The peerTransfer solution offers incredible opportunities for growth across the education [sector] and, perhaps, beyond.”
peerTransfer’s vision of making international payments easy and economical for students and universities has, thus far, proved both popular and profitable. According to internal figures, peerTransfer adds 50 educational institutions to its network in every quarter; since its establishment in 2009, the company has raised a total of $43.2 million.