They could also save some US$100 million per year collectively, according to the firm.
“Given most students have Chinese Yuan Renminbi (CNY) denominated bank accounts, we wanted to develop a system for students to have a transparent and cost effective way to make tuition payments,” Iker Marcaide, founder and CEO of peerTransfer, told The PIE News.
“Prior to peerTransfer, Chinese students would pay from their bank with an international bank transfer. This process was very inconvenient and full of hidden costs and fees, thus providing a poor customer experience for the student.”
Through the new system, students will be able to make payments directly from their bank accounts into a school’s, free of charge. The company promises to cover all regions of China by working with over 100 banks across the country.
Schools meanwhile should save time—admissions departments will for instance be spared the job of having to manually reconcile wire transfers with student accounts. They will also use the service for free.
“PeerTransfer does not charge any transaction fees and instead makes money as part of the currency conversion,” explained Marcaide. “Unlike banks and other large financial institutions, peerTransfer has a much lower cost structure, allowing us to pass savings on to the student.”
“peerTransfer has a much lower cost structure, allowing us to pass savings on to the student”
The Chinese government heavily regulates the outflow of CNY, making it difficult for non-Chinese organisations and companies to accept renminbi. Non-Chinese entities are unable to open CNY bank accounts in mainland China and cannot perform transfers without a special license, which previously left students and their parents no alternative but to go via banks.
Around a third of all students studying abroad are Chinese, making them globally the largest student group by nationality.