International students are increasingly falling prey to payment scams. Lured by promises of discounted tuition fees or impossibly low foreign exchange rates, they are duped by social engineering into sending funds to bogus university payment portals or using unauthorised payment platforms to pay tuition fees. Once the funds are sent, students and families often have little recourse to recoup them.
In this environment, the stakes of sending a tuition payment in a secure manner are high. As IDP education associate director Sanjib Barman put it during a recent Flywire webinar: “This is not just a transaction. It’s visa-critical. It’s a compliance-heavy journey where any shortcut can lead to very serious consequences.”
What steps can institutions take to better protect students from these payment scams? Here are five pieces of advice that came from a recent discussion with leaders of finance and enrolment, education agents and banking during that webinar.
1. Make sure payment pathways are clear to international students
A best practice is to document approved payment pathways in the contracts of education agents and counsellors. Make sure students and families understand that they must use only an institution-authorised third-party payment system when working with an education agent.
2. Rely on vetted, accredited agent relationships as a first line of defence
Vetted and accredited education agents are critical in protecting students and families from making poor decisions when it comes to sending funds for tuition. At IDP, for example, counsellors receive regular training on everything from how to spot fraud, to how to curb a family’s natural inclination to use a discounted channel by shifting the conversation from saving money in the moment, to protecting their financial future. Trusted institution-agent relationships protect the institution as well, by eliminating administrative friction and helping secure quality enrolments.
3. Educate on the hidden problems of not using an approved payment provider
Relatedly, as agents are the first line of defence, equip them with the right payment tools to ensure safe and secure transactions. Even in the event the payment is successfully delivered to the institution, using a non-sanctioned payment provider can lead to issues down the road. For instance, should the student need to stop studying and require a refund, institutions have to legally refund the money back to the original source, Chen said, which often presents an issue if the person or platform will not then refund the student or family.
4. Ensure high levels of payment visibility and security
Payments must be traceable by both the sender and the institution – with status updates from guaranteed through delivered. Visibility allows timely issuance of documentation needed for visas. Payment security and fraud controls built into platforms help reduce risk for the institution – including KYC verification, advanced fraud detection, behavioural analytics, data intelligence, transaction monitoring, and more to flag and mitigate suspicious activity.
5. Balance security and friction to make payments seamless
Cross-border payments are complex. But for the sender and the receiver, they do not have to be complex. Strong partnerships between regulated entities and Institution-appointed payment partners are critical in this regard. When everything works as it should, trust is guaranteed. And students and families can focus on their journey and the institution can efficiently process payments.
Protecting international students from sophisticated payment scams is no longer just an administrative task for university finance departments – it is a core responsibility of student welfare and institutional risk management.
About the author: Prakash Venkataramani is senior director of payments at Flywire
