American ExpressSupporting universities’ digital transformation with open banking

Supporting universities’ digital transformation with open banking

American Express Pay with Bank transfer

How American Express is making digital payments easier, and why it is timely for universities as the pandemic highlights the need for more efficient payments

Content paid for by American Express.

When open banking was launched in the UK in 2018, it created a wealth of possibilities in the financial sector. The reforms meant UK-regulated banks had to allow customers to share their financial data with third parties with the hope of encouraging competition and innovation in the sector.

For vendors – including universities ­– open banking allows financial service providers to offer a simple, secure, immediate and cost-effective way to receive payments. For consumers – such as university students – it gives access to trusted third parties, with bank-level payment security, showing payment information in one place and allowing them to pay for services instantly. Typically, biometric authentication is built-in, meaning information doesn’t need to be typed into a system, lowering the risk of processing errors.

American Express launched Pay with Bank transfer, its open-banking payment product, in 2019. Pay with Bank transfer enables consumers (whether they’re American Express customers or not) to view their accounts and make secure payments quickly via the Pay with Bank transfer button on merchants’ checkout pages. Meanwhile, partner merchants can receive payments from all major UK bank current account holders.

For universities, Pay with Bank transfer offers a solution to a common problem: challenges around financial reconciliation, which is typically a very manual process despite the significant sums involved. Students and their families must manually enter information, which is time-consuming and creates the possibility of error. Mistakes can be made at the university end, too, making it difficult to match students to courses and services and creating burdensome administration problems.

Holly Coventry, American Express’ director for Pay with Bank transfer, says that as universities undergo digital transformation, offering secure and efficient payment methods is more important than ever. For students and their families, Pay with Bank transfer is a fast and secure way to pay course fees and for services such as campus accommodation.

A service such as Pay with Bank transfer, which uses custom technology and identifiers that can be instantly matched to the right student account, goes a long way towards creating a more consumer-friendly system. “With Pay with Bank transfer, end-to-end payment is ensured and reconciled against the unique student identifier,” says Coventry. “Reconciliation issues are significantly reduced, thus reducing staff workload, and [Pay with Bank transfer] can be linked in with services, particularly accommodation. And all this can be done via email, chat or over the phone, with no need to log in to any portal.”

Coventry sees the open-banking ecosystem as the infrastructure to make digital banking easier and to drive competition. The pandemic is a “trigger moment” to drive its growth. By offering new payment solutions to universities, Coventry says universities can expand the ways they serve students and their families: “These are high-value, critical payments…and represent a valuable way to stay one step ahead of how students are expecting to pay. Unlike a debit card, no data is shared. The data stays between you and your bank. Neither American Express nor the university sees it.”

American Express works with its Pay with Bank transfer partners on building awareness around open banking and creating a frictionless customer experience. “We work as partners and support them with a customised range of tools,” Coventry says. “This includes a dedicated American Express team and expertise in education payments to ensure we are best serving their needs and those of their students.”

Adopting Pay with Bank transfer is also about future-proofing university payment systems for the new normal, which will demand agile universities and agile systems. It offers both a contact-free, hygienic payment method at a time of pandemic and eases remote administration processes. “We are excited about how Pay with Bank transfer will help open new opportunities,” says Coventry.

American Express has demonstrated its ability to adapt the Pay with Bank transfer product to various clients across a variety of sectors. “We have an ongoing relationship with customers to continue adapting to and meeting their needs.”

The key to winning over universities is demonstrating how open banking meets the needs of a digitally native cohort. “Students will be the ones who are the early adopters, the ones who want to and are used to doing everything digitally and instantaneously,” Coventry says. 

Universities that have implemented Pay with Bank transfer are pleased with the results. Lancaster University, an early adopter, integrated Pay with Bank transfer and, as a result, has automated the payee set-up by integrating a bespoke student ID directly into the payment process, pre-populated using accurate and confirmed details from the university. This means students or their families don’t need to set anything up, and payments are automatically matched to the correct student account.

A spokesperson from Lancaster says: “This is an exciting opportunity to further improve our payment experience for students, parents and alumni, whilst at the same time delivering processing and financial benefits.” Meanwhile, a student user says: “I didn’t have to use any passwords to log in to either the Lancaster site or my banking app (both using face ID), so the process was genuinely one of the best online transactions I can remember doing.”

Now, American Express is focusing on the future of Pay with Bank transfer and is excited about the prospect of bringing more universities on board. “In March, we went live with some of our digital invoicing capabilities, which sees students sent not just a payment link but also a personalised financial statement. This is very exciting for universities,” says Coventry.

Coventry adds: “There are two schools of thought. Either be an industry leader or sit back and see how the market evolves. We have focused on pioneering…It’s a huge opportunity for the sector.”

Find out more about Pay with Bank transfer, powered by American Express.

American Express Services Europe Limited. Registered Office: Belgrave House, 76 Buckingham Palace Road, London SW1W 9AX, United Kingdom. Registered in England and Wales with Company Number 1833139.

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