FinTech firms need to seize the opportunity that EdTech is presenting them with, not attempt to compete.
Education technology is evolving rapidly. If you type ‘EdTech’ into a search engine, it will not take you long to find a plethora of articles describing it as the ‘next big thing’. There are currently over 1,000 EdTech firms in the UK1 and investment is set to reach a massive $252 billion by 2020, growing 17% per annum.2
So what is causing this surge? KnowledeMotion’s David Bainbridge offers theories to explain why EdTech ‘is poised to be the biggest and most profitable digitized sector yet’. Bainbridge claims that education is changing in a way that has not been seen in 150 years, motivated by the new tech savvy generation of students adopting tablets and laptops whilst teachers utilise screens and interactive/cloud-based resources to help them teach.
Furthermore, this new emerging sector generates $5 trillion globally per annum and is a relatively safe bet for investors. Compared to FinTech, it does not have the volatility of financial markets, and in a world currently dealing with Brexit, that has a big appeal. The investment opportunity that EdTech provides cannot be ignored.
EdTech & FinTech: The emerging opportunity
The education sector faces various problems that are not seen in many other industries and, unlike FinTech, technology is not enough to lead EdTech where it needs to go.
One example of this is handling money.
Imagine, for example, that as a student you receive extra-curricular guitar lessons. The school provides a teacher and the pupil pays for the service of the lesson. However, it is not usually the student that is paying. It is their parent or guardian, as most young students do not own bank accounts. This means the teacher has to accept payments in the form of cash in envelopes, send cheques or hope the school has some sort of payment system integrated on its website.
This example is seen many times over in schools: field trips, school dinners, sports clubs. There are payments going between students and the school every day, yet many schools still have no system for processing payments efficiently, securely and affordably.
Whilst payments are commonplace in schools, they are still essentially viewed as admin and are much more onerous than needs be.
Unlike normal businesses, the taking of money is not the endpoint. Schools, rightly so, divert the little time and resources they have to improving the quality of education and school life, which is why EdTech is on the rise but the opportunities FinTech can offer are being missed in education.
EdTech systems should start to incorporate a payments option to their product. That way, one unified system that schools would be willing to adopt due to its positive impact on school life would at the same time massively improve their payment processing.
EdTech and FinTech: The perfect partnership
The emerging EdTech products and tools enable schools to save time, raise standards and increase engagement between teachers, parents/guardians and students; sequentially creating a positive impact across the entire education spectrum.
With The Paybase Platform, these organisations can extend their solutions to handle all aspects of payments electronically, easily, quickly and cost effectively. Schools will no longer have the pain of handling and reconciling cash from parents/guardians, instead they will have full control of all payments from meals, trips, clubs and tutors, seamlessly, effortlessly and instantly.
The Paybase Platform is perfect for any EdTech apps/products that require a payment solution. With our platform they are able to fully automate and customise use-case-dependent payment options, reduce operational burden and potentially complex reconciliation through Integrated Electronic Payments. With built-in compliance and quick & simple integration through our unified API, payments between parents and schools suddenly become easy, instant and totally secure.
If you’re an EdTech firm or building something new that needs a payments option, we want to talk to you! Please get in touch with any questions or suggestions, or follow us: