Iker Marcaide’s tuition got lost when he tried to pay MIT Sloan School of Management from Spain in 2008. MIT had no record of his payment, probably because his student ID dropped off the wire transfer as the money moved from bank to bank. After e-mails back and forth among the bank, Marcaide, and the university, the payment was eventually found.
“I thought there should be a better way of doing this,” says Marcaide.
The experience motivated him to start peerTransfer, which makes tuition transactions for international students attending American universities. The company, launched in 2009, makes it possible for students and schools to track their payments easily and guarantees a lower price than the students would pay on their own, says Marcaide.
More than 400 universities, including MIT, Boston University, and Cornell University (including their business schools) have signed up for the service, which can handle payments from more than 200 countries. There are 45 employees working in the company’s offices in Boston and Spain.
Universities and students pay nothing to use the service. The company bundles student payments and negotiates discounted exchange rates with banks, allowing peerTransfer to offer students lower rates than they can get on their own and capture a portion of the savings for itself, says Marcaide, who graduated from Sloan’s full-time MBA program in 2010.
Universities sign up for the peerTransfer program and direct their international students to create a login on the company’s site. Once they do, students inform peerTransfer how much tuition they need to pay in their native currency and to which school. The company then tells the student how much the transaction will be in dollars and provides them with detailed instructions how to transfer the funds at a local bank.
To avoid the chaos Marcaide experienced, peerTransfer allows students to receive e-mail notifications throughout the payment process. And schools can track the progression of a payment from start to finish through the administrative dashboard.
The University of San Francisco, with 10,000 students, 13 percent of them international, would experience a handful of lost payments each semester, says Connie Feltner, director of student accounts at the university. It signed up for peerTransfer about a year and a half ago. In the 2012-13 academic year, $22 million passed through peerTransfer to the university. So far the institution hasn’t lost a payment, says John Roscigno, an assistant director of student accounts at the university.
In addition, when issues arise over adapting to the new system, peerTransfer sets up seminars in the university’s remote office in Thailand. It also provides students with 24-hour support, usually in their native languages, says Feltner. Still, she’s happiest about how much easier this payment process is on students, who sometimes carried cash from their home countries. Says Feltner: “The idea of a student walking around with that much cash in San Francisco is scary.”