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Jul 01, 2021 | International Payments

Open Banking: What does it mean for students and universities in the UK?

A Global Bank in your hands

Open Banking remains a hot industry topic, and the UK is at the forefront of the innovation that surrounds it. Since 2018, banking regulation in the UK and in Europe have meant that banks need to allow their customers to share financial data such as spending habits and bank statements with other authorised providers of financial products.

Open Banking provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions using application programming interfaces (APIs). Open Banking is a disruptor in the payments industry and will reshape banking.

The new banking regulations enable financial institutions to offer account information services, such as consolidating data from different banks and offering features like product recommendations. These banking services include budgeting apps and price comparison websites.

Financial institutions will offer more payment initiation services, which enable consumers to make payments directly from their bank accounts and not through a third-party processing network, such as Visa or Mastercard. These payment services open a world of opportunities for students to pay their tuition fees to universities and colleges, all from their mobile phones.

In a nutshell, Open Banking is a secure way of sharing financial information with third parties and gives the control back to the consumer.

At Western Union Business Services, we constantly look for ways to simplify and optimise payments and have welcomed the changes that Open Banking represents. Competition is healthy and Open Banking gives consumers more choice, freedom, and control over their payments. As a matter of fact, we’ve added new partners to our ecosystem to help our clients leverage this opportunity and have been for a while offering new capabilities in this area.

In Europe and the UK, we have partnered with Klarna (formerly Sofort), a real-time bank transfer payment method that allows users to remit funds directly from their bank accounts. Klarna works with our Global Pay for Students platform and is available in British Pound and Euro in the UK, Germany, Italy, Spain, Belgium, France, Austria1.

Karen Penney, UK VP of Payments Products at Western Union Business Services said: “Open Banking is the way forward as students can pay in any way they desire, all from their mobile phone. As the new academic year approaches, Open Banking is bound to play a critical role in tuition fee payments. Universities will need to be prepared, to help ensure enrolments are seamless.’’

Open banking for universities: choice and control in difficult times

Like a great many institutions, universities have been hit hard by the Covid-19 pandemic. Students have had their studies disrupted in an unprecedented manner and have often been kept away from their seat of learning by local lockdowns, travel restrictions and quarantine requirements.

After a year of closures and uncertainty, students need peace of mind and stability, and universities must be ready for that. As part of the digital-first Generation Z, students will expect to pay how and where they choose, and most likely, through a mobile app.

At Western Union, we work closely with finance departments to facilitate tuition payments, and to help them manage their cash flows.

Our powerful platform helps reconcile payments with student accounts, simplifies the refund process and allows students to track the status of their payments online. This reduces queries from students and helps universities free up resources.

A trusted partner to help students pay efficiently

At Western Union Business Solutions, we are trusted by more than 60,000 organisations to move money around the world. We have an extensive global network, spanning 200 territories and 130 currencies, and an in-depth knowledge of local markets and compliance.

If you are looking for world-class cross-border payments services, or counsel on Open Banking and what it could mean for you, please contact our education team at clientquerieseducation@westernunion.com. We’ll be more than happy to talk about how we can help you manage your international transactions.

1 For a full list of those countries, please contact clientquerieseducation@westernunion.com