Do you use credit cards as a payment method in your school?
A lot of owners will probably answer “no”. In the past, monthly payments were tucked away in envelopes and delivered to the school as the main method of cash payment. Somewhere along the line, automatic bank withdrawals became the main way to receives payments from students. What caused this changed?
Automatic withdrawals are regular and easy!
Credit cards subscriptions are automatic and easy, just like bank withdrawals, but offer these additional benefits:
- less likely to bounce as a result of lack of funds
- doesn’t require filling out papers, placing personal stamps, or trips to the bank
- the billing date is completely flexible
- customers prefer paying by card!
So why do many smaller schools not accept credit cards?
The main reason is probably that many owners are scared off by the fee charged by the processing company. In Japan, Stripe charges 3.6% to owners to use their platform. Sounds like a lot, right? If you’re getting 10,000 yen per month from a student, 360 yen of that will end up going to Stripe!
But consider, many bank withdrawal services charge 150-200 yen, on top of their monthly services charges. You also need to pay these fees even if the transaction fails. If you ever need to refund that money, you’ll be paying more bank fees on top of that.
If credit cards cost me money to accept, why should I bother changing?
Good question! Here are some questions to ask yourself:
- How much time do you spend entering & checking payment records?
- How much time do you spend making invoices and receipts and delivering them to students?
- How much time do you spend checking up on students who missed payments?
- How much time do you spend checking the register totals?
- How much stress does dealing with all these give you?
If you spend almost no time dealing with these things and have no stress, you’re probably fine where you are. However, if you’ve found yourself spending an hour trying to figure out why the register total is off by 2000 yen and not knowing who paid that money, you might want to think about changing.
How can uTeach Cloud help?
uTeach Cloud is a comprehensive school management cloud app, which allows owners to save time & money by automating and simplifying a lot of the overhead for schools.
uTeach Cloud offers these convenient payments features:
- Custom payment types for your school
- Complete integration with Stripe for credit card billing
- Itemized billing for students
- Automatic invoice creation to save you time every billing cycle
- Automatic credit card billing with Stripe
- And more!
Needless to say, you can do a lot with uTeach Cloud. But let’s take a look at an example to help you understand more clearly how exactly your payments processing might change.
A Tale of Two Billing Cycles
Let’s look at two examples from a language school in Kumamoto, Japan. Here’s the old way billing worked (using bank withdrawal as an example):
Initial Billing Setup
- Request withdrawal application forms from the bank in advance and pre-fill (handwrite) the school’s account information.
- Student expresses interest in joining school and receives the bank application.
- Student brings back the application when they start classes (friction point: they forget they form or fill it out incorrectly).
- Because it takes time to process the information, payment for textbooks and first two months are received upfront (friction point: student forgets to bring cash).
- Staff handles cash, prints receipt, hands to student.
- Staff inputs the billing information manually into uTeach and register.
- Staff deposits cash in the bank at some point.
- Staff walks the application to the bank to have it processed (friction point: the paper returns several weeks later with an error due to address or stamp).
- Staff receives the application confirmation from the bank.
- Staff inputs the information into the online billing portal.
- Staff returns copy of bank application to student.
Total elapsed time: 3 – 5 weeks
Monthly Billing Cycle
- When the monthly billing cycle date approaches, staff checks billing status and inputs information to bank portal.
- After about two weeks, the bank sends out a statement with withdrawal information (friction point: bank withdrawal fails and staff needs to take note, follow up with student, and make arrangements for collecting delayed payment).
- Staff checks statement and inputs information for succeeded payments (friction point: if student has quit or decided to take a day off, it usually happens after setting the bank withdrawals, so refunds need to be processed manually in cash or by requesting bank information and sending a transfer).
Total elapsed time: 2 – 3 weeks
And there here’s how things have changed:
uTeach Cloud Billing Setup
- Staff sets billing preferences (billing date, currency, etc) once for the school.
- Student expresses interest in joining school and staff sets their payment plan on uTeach Cloud. An email is automatically sent to the student asking for them to register their card information, so they login and do so. Card information is automatically evaluated when the student inputs it.
That’s it! All the staff needs to do is input the plan information and the email is automatically sent and students only need to fill out a simple form to add their card information.
uTeach Cloud Billing Cycle
- Cards are automatically charged as per the settings, and payment success is automatically updated on the backend without any manually confirmation by the staff.
Actually, zero steps. Once the student is signed up, everything is automatic, all the way down to creating the accounting entries on uTeach Cloud.
For those of us who have been using bank withdrawals for a long time, it may seem like it’s not that bad. And, when everything works smoothly, it isn’t. But try to remember what happens when things don’t work smoothly:
- A student pays cash up front but has constant issues with getting the bank account working. You end up going back and forth to the bank trying to get the documents right and accepting irregular cash payments in the mean time. What a bother.
- A certain student often has bank payments fail, meaning you have to reschedule the payments and keep track of their balance. Waste of time.
- At the end of the month you get your billing statement. Now you need to input one or two hundred transactions to keep your individual student data up to date. How many hours does that take?
Credit card billing knocks done a lot of this wasteful, and unpleasant, work that that distracts from the more important aspects of running your school.
Making the Transition Smoothly
Unlike a lot of changes, moving over to credit card subscriptions doesn’t have to be a disruptive process. In the case of the school mentioned above, the change has been accomplished like this:
- Newsletter announcements advertising credit card payments for those who are interested.
- Addition of credit card option to counseling for new students.
- Reminders to students who are paying by cash or who might have missed a bank withdrawal.
In this way, students are in charge of the transition to credit and many students have expressed appreciation at the new option. Mothers who are collecting points are especially interested in switching over to credit.
Using this method, you can transition a few students at a time, avoiding a mountain of work at once and also avoiding inconveniencing any students in the process.