School fee payments with cards at new high
MORE PARENTS PREFER PLASTIC MONEY AS SEVERAL INSTITUTIONS STOP CHARGING EXTRA BY WAY OF ‘SERVICE’ OR ‘PROCESSING FEES’
The trend of parents paying school fees by bank cards is catching on as schools absorb the costs of the transactions without passing them on to parents.
Previously it was more commonplace for schools to ask parents paying by bank cards to cover the transaction cost, which is typically around two per cent of the amount being paid.
However, passing on this “processing or service charge” is not allowed.
A large school group in the UAE had decided to end the practice after complaints from several parents.
Recently, Taaleem, another large school group which absorbs the card transaction cost, said the popularity of using cards to pay fees has been rising annually.
It has reached a new peak this year, representing over 60 per cent of school financial transactions across the group.
For parents, the card payment “service charge” is an unwanted burden.
More parents are choosing to pay their children’s school fees using bank cards, as schools absorb the associated cost of providing the service without passing them on to the parents.
Previously, it was common to find schools charging parents extra — usually two per cent of the payment amount — if the fees were paid by a credit or debit card. The extra cost of the transaction was a deterrent for many parents who wanted to use plastic money.
The practice of imposing the so-called ‘service’ or ‘processing fees’ on card transactions is not allowed anymore.
In 2013, a large school group in the UAE had decided to end the practice following complaints from parents. Schools and business establishments that accept payments by card are charged by the bank for the transaction, which is usually two per cent of the transaction amount. Some schools or businesses used to recover this cost by passing on the ‘service charge’ or ‘processing fee’ to the customer, which was against the rules. Others did not offer the option to pay by card at all, to avoid the associated cost.
However, as many parents find it convenient to pay by card, many schools now accept this mode of payment without passing on the transaction cost to the parent or customer.
At Taaleem, one of the UAE’s biggest education providers, payments by card have reached a new high, making up almost two-thirds of the fees, said director of communications for Taaleem, Clive Pierrepont. Taaleem website taaleem.ae lists 10 schools in the UAE. The school group is expecting a record number of more than 9,000 students at its institutions during this academic year. Pierrepont said: “The use of credit cards to settle school fees has increased annually, reaching a new peak this year, where more than 60 per cent of school financial transactions are being done through this method. Taaleem absorbs the cost of these transactions as we understand that parents can gain by using certain bank cards and spreading their payments over a period of time.”
In Dubai, Credence High School also absorbs the cost of card transactions, said Deepika Thapar Singh, CEO and principal of the Indian curriculum school. Singh said: “Credence accepts credit cards, for the payment of tuition and other fees. This is in addition to the option of cheque, cash and online payments — whichever mode is convenient for the parent. We do not charge the parent any additional fee.” She added: “This [payment by card] is a convenient mode as it’s quick and hassle-free for parents. It gives them time to repay the bank, thus managing their home budget better. Besides, many banks offer rewards, which are also beneficial to the parents. Most of all, credit card payment is quick and does not involve the hassle of writing a cheque or withdrawing or carrying a large sum of money.”
The Global Indian International School (GIIS) group in the UAE absorbs all costs associated with the card payments, said Amol Vaidya, director of operations. Vaidya said GIIS absorbs the costs “purely because the rates differ from card to card; and to save the parents the trouble and make it a smooth process for both parties”. He added: “GIIS offers all payment options to parents — cash, cheque, credit card, debit card, money exchange and online. The idea is that parents should not be required to travel long distances for making fee payments.”
The use of credit cards to settle school fees has increased annually, reaching a new peak this year, where over 60 per cent of school financial transactions are through this method. ”
Clive Pierrepont | Director of communications, Taaleem
Saving one the effort
For parents, the card payment “service charge” is an unwanted burden. M.Z., a Pakistani father in Dubai, said: “I used to pay school fees by card and get charged an extra two per cent by the school for the transaction. I did it only because it saved me the effort of going to the school or carrying cash or writing cheques. But I wasn’t happy about it. The school then decided to stop taking fees by cards. I suppose they didn’t want to go against the rules and didn’t want to absorb the costs either.”
Abrar Quazi, an Indian father in Sharjah, said: “I pay school fees online using my bank card and the school doesn’t charge me any ‘service fee’ for it, which is only fair. It’s easier to pay by card, so that’s why I do it. The fees are the same, whether you pay by card, cash or cheque, as it should be.”
60%
of transactions at Taaleem are being done through cards