peerTransfer going global for tuition payments
Boston Business Journal – By Taryn Plumb
Iker Marcaide has been there: When the native of Spain was accepted into MIT’s Sloan School of Management in 2008, he learned first-hand how expensive, complex and risky wire transfers can be: His wired tuition payment got lost, although it was eventually recovered.
He figured there had to be a better way for international students — there are about 750,000 in the U.S. — to safely and securely pay for their education.
So in 2009, he founded the Boston-based peerTransfer, which processes tuition payments for students studying abroad.
“When you’re moving around the world, you have to worry about many things,” Marcaide said. “One of the things you don’t want to have to worry about is your money getting there on time, or in the right amount.”
The company employs 40 in offices in Boston and Spain, and has partnered with more than 370 schools in the U.S., Canada, the U.K., Australia and mainland Europe, with thousands of students coming from more than 200 countries, according to Marcaide.
PeerTransfer has raised $14.9 million in funding, including $6.4 million in a round announced in June from QED Investors, Spark Capital, Maveron and two Spanish firms, FIDES Capital and KIBO Ventures.
The company’s service is free for students and partnering schools. Students pay in their local currency to peerTransfer, which then bundles those payments with those of other students and negotiates discounted exchange rates with financial institutions.
Revenue comes from capturing a portion of the savings received from that bundling, Marcaide said.
Because colleges only accept tuition payments in their country’s currency, students have had limited options in the past — typically credit card payments or wire transfers. The latter, he said, often come with “high and hidden fees, unfavorable exchange rate conversions, and an inability to track your money.”
“With peerTransfer, there are no fees. What you owe us, and what you send, is what we ultimately get,” said AnnMarie Pennachio, director of student financial services at Bentley College in Waltham, calling it more transparent and organized than other options.
Bentley is employing the service for the first time this upcoming school year, and roughly 75 to 80 of the school’s several hundred international students are now using it, Pennachio said.
Marcaide says the service benefits often “budget-constrained” schools, as well, by saving them time and money, and simplifying processes.
Bentley, for instance, is building out a program that will automatically upload paid amounts and ID numbers into individual student accounts, based on payments it receives from peerTransfer. That will ultimately cut down on manual posting and accounts payable hours, Pennachio said.
“That wasn’t the only reason we went with it,” she said. “For me, it was more for the customer service for the students.”
And going forward? PeerTransfer will use its latest infusion of funding to invest in product development and to focus on global expansion, Marcaide said.
“It’s good — we’re having fun, we’re growing,” he said.
In the end, Marcaide said, it comes down to “how can we make this world a simpler place?”