Throughout 2020, the founders at Pay Theory asked time and time again:“How can advancements in Finance Technology (fintech) help to advance the mission of our K-12 education system?” Of course, one good question leads into another. Our second philosophical question that we noodled on was a broader one about the state of schooling in the 2020s: what is the mission of the K-12 education system?
As evidenced particularly during the time of COVID and virtual learning, it’s no secret that our education system here in the US had faced its share of challenges. Teachers are often overwhelmed and underpaid. Administrators are left straining to manage ever more challenging student and parent situations. In recent decades, the education system has found itself saddled with and new responsibilities such as being passed into it like mental and physical healthcare, site security and numerous new enrichment activities. And all the while, social media has given a chamber to unseen levels of angst.
How can we help?
In thinking about helping schools, we found it helpful to recognize three foundational concepts:
A good education is vital to a person becoming a contributing member of a civilized society, so we must continue to educate our children.
Schools, private or public, are where that education tends to happen, so we must continue to support our schools, teachers and administrators.
The definition of a good education is evolving. Along those lines, schools are working together with parents, communities and technology to address that evolution.
Education technology has begun to evolve with these new needs, creating a layer of technology between the school and the families served by schools. SaaS applications such Clever, SeeSaw, Google Classroom and Parent Square have revolutionized families’ level of engagement in a child’s education and education environment. Data repositories such as Global Grid for Learning have made it possible for these applications to easily integrate with student data.
We realized that fintech also had something to offer to help schools meet their evolving missions). Schools need help from EdTech and FinTech to reduce payment frictions. To do that, we recognized that payments are governed by three unique customers with different need sets: schools, EdTech SaaS platform vendors and families.
A better solution
A better payment solution has to deliver a better experience for all these customers. That came down to three crucial design directives:
A solution that serves ALL families, no matter their socioeconomic position, banking status or credit score.
A solution that respects and, ideally, saves school resources in terms of both budget and labor concerns.
A solution that improves SaaS platforms by making them more valuable for their customers while opening up new sources of revenue.
That’s a payments tool that some might deem, dare we say, too cool for school. We, of course, disagree. The development challenge is to allow for the seamless transfer and visualization of data among an EdTech platform, payment transactions, schools, and families.
Helping education achieve its mission isn’t just our mission: It’s the mission of our payments solution. Stay tuned on this blog to learn more about our vision for Family Tech and payments.
Think about your company and your privacy and cybersecurity initiatives. Now, choose the appropriate answer: “PCI compliance for our organization is”
a) important, b) a hassle, c) mandatory, d) smart
The correct answer is A, C, D and —all too often —B.
Anytime you or your company handles sensitive information, cybersecurity is a concern. Ignoring or not implementing cybersecurity compliance best practices can be a costly mistake. The risks of not incorporating PCI compliance into your payment solutions include:
Industry fines for non-compliance
Increased risk of data breaches
Fines and lawsuits that result from data breaches
Government intervention (FTC has sued companies for prior security breaches))
A loss of customer confidence
For any organization that accepts or handles credit card data and transactions, compliance with Payment Card Industry (PCI) Data Security Standards should be a given. The moment your company accepts your users’ payment information, as well as any other sensitive data about your customers and/or students means that compliance with industry security standards should be paramount for you, as well as any SaaS payment processing tools.
PCI is a collection of best practices that the major credit card companies have identified as crucial security concerns,organized into 12 core areas. While the certification process is a snapshot of your strengths at a given moment in time, true PCI compliance is a continuous process.
Takeaway: PCI doesn’t end when you get a letter of compliance.
The good news is that there are solutions that can ease the burden of achieving compliance:
Working with solution providers that help to take your processes out of scope.
Look for providers that tokenize sensitive data so that information never touches your systems.
Look for providers that take the need to store sensitive information off of your plate.
Working with providers that build their platforms specifically for the needs of your organization.
When possible, find partners that are not only familiar with the requirements of the payments industry but who also understand your specific industry and implementation.
How many times have you looked at Stripe and thought about integrating payments into your application? Sometimes it’s the idea of more revenue. Sometimes a customer asks for payments solution within your platform. Whatever the case may be, getting into payments is like losing 30 pounds; it sounds simple until you get to the hard work. If you are starting to look at the payments challenge, here is my cheat sheet of things to think about:
Your use case. What is your use case and customer? Are you collecting fees, or are you selling a SaaS app? A great use case will make paying and collecting simple for parents and providers.
Your revenue model. Are you collecting payments for your services? Do you enable someone else to collect money? Are you looking to make money off the collection of money, or lower your cost of transactions?
Your level in the food chain. Your costs for payments depends on where you are in the food chain of payment processing. How much volume do you think you have will help pick where you should end up.
Your level of risk. How much risk are you willing to take on for security and fraud? Security is a big thing to manage for payments, as is fraud. Managing both can generate a lot of savings.
Your tech stack. Is your tech stack up to date and secure? Are you mobile, Web, or hardware? Payments come with a development cost, and ongoing management.
Your costs. Are you looking at 2.9% and $0.30, flat rate, interchange plus, or surcharging? Understanding the pricing and reporting of ACH and credit cards payments is key to negotiating a good deal.
Your partner. Depending on your volume and needs will help you pick a processing partner. When choosing the right partner keep in mind factors such as technology, onboarding, and rates.
Your team. Is your team open to the idea, and can they get all the details for successful payments collection?
If you have a good use case and understand your revenue model, you should look at getting into payments. It might look daunting. ut it doesn’t have to be. I’m going to break down each of the areas into the details you need to make an informed decision. My goal is for you to understand if and how you could get into payments with your FamilyTech platform. Payments isn’t for every company. For the right ones, however, it can be a major revenue source.