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Going Back To School For B2B Payments

B2B payments in education is big business and it doesn't take hitting the books hard to understand why. The populations are large and purchases are generally limited to those approved by the school, so whether it's purchases related to books, meals, equipment, buses or facilities, winning the contract from a school can be highly lucrative.

The players in this space are few and they are specialized. Diamond Mind, for example, is a Potmomac, MD-based payment firm for independent schools and it is targeting to control 10 percent of the relevant market—and 3,500 schools in all 50 U.S. states—by 2019. Diamond in late July raised an unannounced amount from growth equity firm Serent Capital.

"Over the past decade, we have been hyper-focused on offering the most compelling payment (services) to independent schools by delivering technology innovation, seamless integration, best-in-class customer service, and campus-wide expertise," said Diamond Mind CEO Katherine Novikov. "We now serve more than 850 of the nation’s most prestigious schools, regardless of size, affiliation or location."

Diamond Mind, however, is far from alone. Heartland Payment Systems, for example, is also going to school on the benefits of going to school. Heartland says that it serves some 35 percent of the nation’s 34,000 K-12 public schools.

Another firm, Active Network, which also was involved in the M&A space when it joined forces with Lanyon earlier this year, also provides payment services for some education establishments. Beyond K-12, Active focuses on art, language and private schools, offering a range of capabilities from tuition management to facility rentals and management, including payment processing and payroll management.

Other firms such as FACTS, SMART and TADS deliver tuition collection services, which lower the cost of administrative and regulatory tasks for schools. Even PayPal has an offering for K-12 schools with 1.4k customers already using it. Online auctions are, of course, its specialty but it offers other services such as fundraising and school bus passes.

In its early years, Diamond Mind also sold into the B2G and professional markets, but it dropped those business lines to concentrate on education. It's private school focus has helped deliver a 788 percent growth rate over the past 3 years. Diamond provides a variety of payment services for private schools including a MasterCard purchase card program, tuition fees management, multiple payment option acceptance (ACH, payment cards), e-invoicing and online fundraising.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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