Digital payments from the provider perspective

Online payment vendors offer insight on regulations and pressure to offer nontraditional options
By: | January 22, 2020
Accepting alternative payments means paying attention to regulations while working to meet student needs.Accepting alternative payments means paying attention to regulations while working to meet student needs.

Q1: In your experience, how well do college and university administrators in departments involved in accepting online payments keep up to date on regulations (such as the new regs regarding ADA accessibility)? Why is it important that they do so, even if working with a third-party provider?

“The good news is that people are definitely more aware of compliance than ever before. However, payments may be a small part of a person’s responsibilities, so it’s hard for them to allocate the time to be current on every regulation. In light of the increase in high-profile breaches and lawsuits over the last several years, there is a heightened sense of urgency around compliance, and that’s a good thing. No one wants to put their institution’s name on the front page of the paper for a compliance breach. Administrators receive information from multiple sources, including their QSA, their internal compliance offices and their payment partners.”
—Daniell Egr, chief technology officer, Nelnet Business Solutions

“Adhering to payment regulations is a huge undertaking for colleges due to daily transactions from myriad payment channels, methods and merchants. Schools should lean on their technology providers to help them avoid the fines and reputation damage that compliance failure can bring. But schools must also dedicate ongoing resources to ensure that every new payment acceptor uses validated software, hardware and processors, and that all updates are completed and tested expeditiously to maximize data protection.”
Adam McDonald, president, TouchNet

“Our observations indicate that institutions today are so risk-averse, they are almost paranoid when it comes to inclusion, security and compliance. The rapid pace of innovation in areas like APMs can be attractive to those departments that take the payments but at the same time raise flags in the IT and security departments.”
—Ray Blackwood, vice President of product management, Campus Management

“We find many educational institutions challenged with having a full understanding of payments-related regulations on compliance and security. This is usually due to lack of staffing or subject matter expertise in this complex area. For example, the PCI Self-Assessment Questionnaire (SAQ) document that schools complete could be 3 pages or over a hundred pages for a POS solution. … Schools need to work closely with their payment vendor partner experts to understand and stay on top of regulations and compliance requirements.”
—Michael Grillo, vice president, Bill Pay solution marketing, ACI Worldwide

“Higher ed leaders struggle with changing regulations due to the complexity of department needs, software systems and payment processes across a decentralized campus. It’s impossible to hire the internal experience necessary to stay on top of all the evolving changes. Schools can improve their customer’s experience and school’s reputation by leveraging outsourced experts who live and breathe payment technologies every day.”
—Bryan Jurewicz, chief operations & revenue officer, Arrow Payments

“Ultimately, college and university administrators are responsible for ensuring their campuses are compliant with the appropriate regulations. While this definitely hasn’t changed, over the past few years we’ve seen an increase in these administrators successfully leveraging third-party providers who specialize in compliance to ensure a more efficient means of achieving success. The focus has shifted from a culture of insourcing all aspects of compliance to a more coordinated leveraging of various partners to ensure compliance.”
—Laura Newell-McLaughlin, vice president, payments, Transact Payments powered by Cashnet


Related: Feature on how to introduce alternative payment methods on campus


Q2: As alternative payment methods (APMs) such as PayPal, Visa Checkout and the use of digital wallets, biometrics and online banking become more common in consumers’ daily lives, how much pressure are colleges feeling to offer such nontraditional options and how is higher ed doing in meeting expectations in this area?

“People are definitely asking. This is probably more prevalent in the campus stores or retail ‘small ticket’ environment. Fraud is a perceived risk, so most consumers are comfortable with small transactions flowing through APMs. Tuition is a big-ticket item, and usually people are more comfortable with traditional payment channels for larger purchases—but even in the high-dollar areas consumers are starting to ask for more choices. At the end of the day, institutions want to meet their consumers where they are and payment choice is one of those areas. For the most part, they don’t have time and aren’t interested in vetting every APM themselves. This is a small part of their job. They lean on their payment partners to help with this.”
—Daniell Egr, chief technology officer, Nelnet Business Solutions

“APMs are evolving rapidly worldwide, which is the biggest challenge—knowing who’s using what and how, and more importantly, what makes sense for your campus. All of this is intended to make paying easier for consumers. The challenge for those accepting these payment methods is understanding each is different and may have different requirements; in some instances they may require different technology. Schools should listen to student requests and also look for vendors that can help.”
—Adam McDonald, president, TouchNet

“The pressure is to lower the total cost of a college. Students are more worried about how they are going to pay instead of ‘how they are going to pay’ their tuition and fees. There are so many new revenue streams opening up for institutions these days, that most likely there will be the right form of payment available to the appropriate type of service.”
—Ray Blackwood, vice President of product management, Campus Management

“APMs are a necessity for addressing student payment preferences. The reality is that options like Apple Pay, Google Pay and related wallets are changing the way students want to be billed and how they want to pay. In fact, a recent ACI study showed that mobile apps are gaining popularity for bill payments compared to traditional methods. One of the biggest challenges to overcome is interfacing APMs into often disparate third-party systems supporting everything from the bursar’s tuition payment requirements to dining, bookstore and closed-loop student card systems. A unified approach to campus commerce can alleviate some of that by leveraging a payment system that works with many campus departments.”
—Michael Grillo, vice president, Bill Pay solution marketing, ACI Worldwide

“Schools are intimately experiencing the most technically advanced consumers as students expect to seamlessly pay for goods and services using smartphones without cash, checks or even physical credit cards. The challenge is quickly selecting and implementing the most advanced, secure and cost effective payment technologies without wasting resources or making poor choices. This is especially true with dining halls and fundraising areas where efficient payments are critical.”
—Bryan Jurewicz, chief operations & revenue officer, Arrow Payments

“As competition continues to heat up for many colleges and universities, it’s essential they do what’s necessary to position themselves favorably in the minds of prospective students. Having said that, it’s really important for business office administrators to objectively evaluate the use cases for each of these APMs. Some offer legitimate funding vehicles for payers, while others would not yield a substantial ROI. It’s important to take a holistic view of the second or third order consequences for the adoption of the APM. What does that mean for your preferred gateway and/or acquirer? What impact would it have on your processing costs? How much ongoing maintenance would it add to your applications? Does it fundamentally alter your POS hardware options and what are the costs of adoption? Ultimately, many of these APMs may make sense for use cases associated with smaller transaction sizes, but it’s still very important to consider the full impact of adoption. Reach out to your campus partners. Many have expertise in this area and can help you weigh the pros and cons of each so you can make an effective decision for your campus.”
—Laura Newell-McLaughlin, vice president, payments, Transact Payments powered by Cashnet

 


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