Education institutions in South Africa are migrating cash payments to DebiCheck in an effort to  upgrade tuition collection processes and meet revenue goals. 

The first goal is to ensure an increase in successful tuition collections to keep schools operational in the current economic climate. The second goal is to streamline processes to reduce the time invested in the tedious task of collecting cash payments. Freeing up time for staff members will consequently improve productivity.

Lack of funds to sustain learning operations

There is a dire need for more effective methods to collect school fees as the volume of unpaids is on the rise nationwide, and have been since before the outbreak of the pandemic. Charles Molele, via Inside Education, reported that at least 60% of private schools in South Africa risk closing down due to financial challenges, particularly as a result of non-payment of school fees by parents..

Securing payments by integrating with the latest collection technologies is imperative to ensuring that fees are collected to keep schools operational. DebiCheck provides a viable solution in this regard.

DebiCheck in a nutshell

DebiCheck is a new debit order collection system initiated by PASA to allow debtors to electronically authenticate mandates, thereby cementing debit order agreements on a once-off basis. Once the debtor confirms the mandate, that mandate is registered directly with their bank in real-time. Institutions are thereby able to collect on these mandates on a month-to-month basis without the risk of disputes.

DebiCheck mandates can be authenticated via various methods. TT1, the real-time option, requires the debtor to authenticate their mandate through a simple tap on their smartphone on the date of initiation. This can be performed remotely. TT2 offers the same process with the response window period being extended to 2 days since initiation. TT3, Card and Pin authentication, is a face-to-face means for mandates to be accepted by a simple swipe on a smart POS terminal.

Resistance to DebiCheck migration

While the majority of financial managers at learning institutions have shown great excitement about DebiCheck, others have shown some resistance. The pain points expressed are rooted in the time, costs and effort involved to integrate.

DebiCheck integration via a bank can be a lengthy procedure which can take over a month as system tests and PASA registrations are required. When finally integrated, the collection cost may be a deterrent as some banks charge approximately R10 per successful DebiCheck transaction. The transaction figures have left many financial managers discouraged, as many learning institutions do not have the bargaining power to negotiate lower rates.

What few institutions are aware of is that the latter pain points can be alleviated by choosing to work with a TPPP DebiCheck service provider, as opposed to integrating directly with banks.

Solutions in TPPP partnerships

Integrating with a TPPP (Third Party Payment Provider) accelerates the process, bringing the time to integrate down from months to weeks. Regarding the fees associated with DebiCheck transactions, TPPPs are most likely able to provide better pricing since they can negotiate special industry rates with the banks. A per-use payment model can also be provided.

Integrating DebiCheck with the systems that are currently in use to manage learner enrollments are available via API. This means that the DebiCheck process will form part of the systematic processes currently in use, optimising procedures. 

For an institution to take this task of API integration on themselves will require a technical team. A TPPP software provider will perform an API integration using their in-house team at no additional charge and will offer technical support on an ongoing basis.

Successful collections of tuition fees

We spoke to Lydia Banda from Boston City Campus who is currently integrated with a TPPP for tuition collections. Banda says that although they are still in the process of migrating all their payments, they are excited about the new DebiCheck system. She expressed that it is much better to go the debit order or DebiCheck route as opposed to taking cash payments from parents. 

Initiation of debit orders, as a start, has cut the time it takes to collect in half – phone calls to follow up on non-payments are already reduced, and with DebiCheck, the time to query disputes will be eliminated. 

Banda additionally expressed how, due to financial restraints caused by the COVID-19 pandemic, payment plans to collect fees via instalments are made easy by setting up mandates.

Cementing sustainable collection processes

Transformation is key to the survival of institutions that have been hit hard by the economic impact of the pandemic, and it only makes sense to start the process by embracing the latest innovations in payment collection technology

Engaging in partnerships with TPPP software service providers offer solutions to the pain points that are currently deterring institutions from migrating to DebiCheck. Such providers are able to grant a personalised and tailored service catering to institution-specific financial requirements. 

DebiCheck via a TPPP is the fast, cost-effective, and convenient way to cement collection processes and realise revenue goals. It is enabling institutions to move forward into a more sustainable and profitable future.

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