Cross-border Payments

How Asia Is Revolutionizing The $70B X-Border Tuition Space

Flywire payments on a global scale

Pay local — on a global scale.

To that end, Flywire said at the end of last month that it has partnered with JCB International in a relationship that provides international students in Asia with options as they make cross-border tuition payments.

In a PYMNTS interview with Karen Webster, Ryan Frere, vice president of global payments at Flywire, said the partnership “opens up 13 currencies across the network we can allow payers to choose when they use JCB cards to pay tuition.”

And, as he told Webster, the JCB partnership helps establish a beachhead into other verticals.

As reported by the companies at the end of September, JCB cardholders will be able to pay tuition at more than 2,000 schools across the globe, which in turn will use Flywire to facilitate international payments.

In terms of rollout, the payment option utilizing JCB cards will be available to students paying in Korean won, Japanese yen, Vietnamese dong, Chinese yuan and other currencies.

Frere told Webster the partnership had been in the works for a while — and is notable as it links Flywire with one of the biggest card brands in Asia. He said the size of the Flywire client base has proven attractive to JCB as well.

The deal comes against a backdrop where, as Frere noted, the cross-border tuition space is valued at $70 billion worldwide. Asia is the biggest market for payment origination in terms of the number of students.

“It’s an easy connection to say that a lot of these students are holding JCB cards in their hands, and this is the card they prefer to use,” remarked Frere.

The overarching theme, he said, with a nod to past conversations with PYMNTS, is that local payment methods should be used to make payments on a global scale, settled quickly and transparently.

Key to that transparency is that the payments making their way across Flywire’s network themselves carry an abundant amount of data that can speed reconciliation.

Recipients know the funds are moving through the network and are in what Frere termed a “guaranteed state” long before they reach their end destination — and that knowledge allows institutions and businesses to operate efficiently from a cash flow perspective.

That interoperability is crucial, he said, because other network models that connect with aggregators or seek to offer alternative payments across several providers (without the visibility) degrade the payer’s experience while increasing the inherent risk of cross-border payments.

Cross-border payments will never be completely risk-free,” he told Webster, “but the control element, and working with large global banks, helps de-risk in a way that doesn’t happen when you are going through different channels.”

The Mechanics

In terms of mechanics for the JCB relationship, Frere told Webster, the transactions originate in Asia, travel over Flywire’s payment rails and reach the various universities.

The students or families making the payments can use their cards (accruing the attendant benefits and rewards tied to those cards), through online payments that are intuitive and easy to conduct.

Frere said the pricing structure had been negotiated with JCB and card schemes in a way that may persuade payers to choose cards over other payment methods and traditional bank rails.

“It doesn’t matter what rail the payment comes in on,” said Frere, “because it moves into our operational flow at that point” — and the card transactions are sent to Flywire’s regional banking hubs.

Flywire, he explained further, gets economies of scale through trading and FX practices and settles directly with the university clients — or, in the case of JCB, even some of Flywire’s travel clients.

Expanding the Use Cases

“We see a high use of cards in our travel space specifically,” said Frere, who noted that the Flywire network’s visibility and speed can help “tip” transactions toward increased usage of cards, a positive for JCB. There’s also a benefit for the card schemes, as the transaction sizes (and thus interchange fees) for payments are larger than might be seen with other types of payments.

The economies of scale, the new pact with JCB and the fact that Flywire serves both sides of the marketplace through an interoperable global network opens up the possibility of expanding the use cases for payments done across borders, Frere acknowledged — pretty much across any setting for international payments marked by a supplier-buyer dynamic.

“Education may be the primary use case,” he said, “but as we start to expand the business into other verticals, we get some insight into ‘how will a payer in China with a price point of X choose to pay if they are presented with a number of payment methods?’”

As he told Webster: “The data allows us to provide insight into the ways money moves cross-border across the world.”



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.