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Is your provider putting you at risk?

Working with a non-licensed money transmitter is a lot like working with an unlicensed contractor: you might not notice the difference until something goes wrong.

International education in the US is currently valued at around $39 billion per year
International education in the US is currently valued at around $39 billion per year

Universities and colleges typically work with these organizations to collect international tuition and fees from incoming foreign students. It’s an important function since these enrollees are a growing percentage of campuses across the country and their financial contributions are increasingly vital to the educational institutions.

International education in the US is currently valued at around $39 billion per year, with more than 1 million foreign students during the 2017-18 academic year, according to an analysis by NAFSA. Many in the sector may not realize the difference between an unlicensed and licensed business. However, with issues like global compliance, fiscal responsibility and even student refunds, choosing a licensed provider can make a world of difference.

A staggering $26 billion in fines has been imposed for non-compliance with Anti-Money Laundering (AML), Know Your Customer (KYC) and sanctions regulations in the last decade.  

A tuition payment is not only the first major interaction that a foreign attendee has as an enrolled student of the school, but it’s also very likely one of the biggest payments for the students and parents. Ensuring a smooth transaction is a necessity to establish a positive relationship and offer a best in class experience.

Either way, working with an unlicensed money transmitter can be an enormous and unnecessary risk for the educational institution as well as the student. If the institution’s reputation gets affected as not being able to manage student funds effectively they could be subject to negative PR and social media, which will impact the school’s ability to attract research funding the best academics and ultimately harm its ability to attract international students.

As a licensed money transmitter, providers are subject to various legal requirements and regulator oversight designed to protect the educational institutions and their students.

The following are requirements that payments providers must meet for regulators in order to maintain their license:

  • Information demonstrating qualified personnel and sufficient controls in place to comply with anti-money laundering laws.
  • Meet all state requirements relating to fraud-prevention.
  • A data security framework to protect user’s sensitive information.
  • To maintain or renew a licence, the provider needs to demonstrate to regulators that the company is financially sound and holds sufficient assets to meet student’s obligations.
  • Subject to regular examination by regulators and provide audited financial statements to determine the provider is meeting legal obligations and students are financially protected.
  • Measures in place to assure business continuity, in the event of natural disasters or other business disruption.

As a leading partner in the industry, Western Union Business Solutions is trusted by over 700 educational institutions and is a fully licensed Money Transmitter in every state in the USA that requires us to be licenced in. Like any bank or other financial institution, Western Union Business Solutions must meet rigorous licensing requirements in order to be authorized to complete money transfers for its clients.

Working as a licensed money transmitter clearly requires adherence to high standards, designed to protect the educational institutions and their international students. Such protections are increasingly important in a sector where international populations are growing rapidly. Taking shortcuts can hurt both the institution’s reputation and the student.