How Chinese Students Boost Cross-Border Payments


A decade or so ago, the only kids in China who could afford to study in the U.S. were the kids of the super rich. Though times – and the rise of the emerging middle class — have changed that, actually making those international payments remains a challenge. Andrew Ong, Flywire’s Asia Pacific Managing Director, explains how these specific types of cross-border payments must change to keep pace with the growing demand for education abroad.

Champagne-swilling. Ferrari-driving. Black Card-toting. Four thousand dollar weekend shopping sprees at Barneys. That’s the media’s portrayal of the Chinese teenager who’s come to the U.S. to attend college. It’s something right out of the pages of “Lifestyles of the Rich and Famous” – making the life of a college student sound glamorous, if not envious.

But is that really what Chinese students studying abroad are like?

Maybe 10 to 15 years ago, Andrew Ong, Managing Director of Asia Pacific for Flywire, explained, that stereotype may have rung a little truer for the majority. But, Ong points out, things are much different today.

A decade or so ago, the ability for Chinese students to leave the country and pursue their education in places like the U.S., Canada, Australia, the U.K. and even Japan was an experience reserved only for the children of the very wealthy who could easily afford it.

And while the super rich obviously continue to send their kids outside of their own country to get the best education money can buy, they aren’t the only ones who now do so. Over the years, China’s middle class has emerged and their children, as a result, have also gained access to the opportunity to study abroad – including at some of the best schools in the world.

“As China has ‘opened up’” Ong said, “more middle class families are finding ways to afford higher education for their children in the U.S.” With a cultural expectation that parents will do what’s necessary to fund the education of their child, Ong said that Chinese parents are motivated to work hard and save so that they can help their kids achieve their higher education goals.

Ong said that Flywire, a platform for enabling high dollar, low frequency payments from consumers in one country to businesses in another, has seen applications grow significantly – with roughly 1 million from Chinese students last year alone. That, Ong says, demonstrates that the demand for higher education overseas is on the increase, as is the realization that the emerging middle class needs help to facilitate payments from them to the college or university selected.

It’s a process that’s not so cut and dry. Ong joked that the challenging part of sending kids to school out of the country should be saving the money to pay the tuition and other fees – not the physical aspect of sending the payment to the school. Making those international payments often becomes a point of stress for the middle class families who have the money but not the same access to resources and banking options as their wealthier counterparts. That, says Ong, leaves them to wade through “a very onerous process” to try to simply move money out of their bank account to a school.

Those challenges that may sound foreign to those of us living in developed countries where getting to a bank is a walk down the street or a 5-minute car ride away. But finding a banking branch that’s close to one’s home in China, making the time to travel to that location and then waiting in line be serviced once there ends up being a half a day off work.

Then a further point of stress is then having to convert Renminbi to dollars, in a fluctuating currency market with multiple hops through a variety of banks before it lands in the bank account of the institution itself.

Flywire, Ong said, was created to eliminate that friction for those families – especially those families whose kids are digital natives, but the parents sending the money aren’t even remotely close to being comfortable sending money via the Internet, especially the large sums of money that are tuition payments.

To provide that level of comfort, Flywire makes it possible to allow payers to use a single online platform to enable payment from a variety of payment options that best suit their needs, whether it’s a transfer via their local bank, a credit card payment, or an online payment method such as Alipay, among others. Flywire then facilitates the transaction through its financial partners on the ground in China, thus eliminating conversion fees and confusion because the transfer is all handled in the local currency.

Ong also said that since Flywire is presented as an option to students through its university partnerships, it tends to alleviate many of the concerns or reservations payers may have about making such large payments through an online platform that they may have never heard of.

Flywire currently works with more than 900 schools around the world, 80 percent of which are exclusive contracts. Enrolled international students are made aware of Flywire as an option immediately upon acceptance as a way to provide a secure tuition payment.

“That itself provides the assurance that it’s a very safe mode of payment,” Ong added.

As we approach the end of the school year, Ong expects a “huge influx of Chinese students who eagerly see the opportunity to explore a new county while pursuing their higher education goals.”

Reaching and supporting those payers in China is important, which is why Flywire offers real-time support through a WeChat support line.

Ong said that Flywire’s goal is to ensure that its payers will “never be helpless,” throughout the process of enabling payments for higher education.

“We believe in providing the best service,” he added.

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