The world of higher education is notoriously slow to innovate. PeerTransfer is a startup that hopes to take college payment systems out of dusty dark corners and bring them into the modern era.
The company announced today that it has secured $6.4 million to accelerate its global expansion and develop new products. The company provides global payment solutions for the education industry, making it far easier and cost-effective to make international tuition payments.
Millions of students go abroad to study. According to PeerTransfer, nearly 750,000 from over 200 countries attend school in the US alone and “whether they come from Albania or Zanzibar, they all have to manage the process of transferring money for deposits, tuition, and fees that is messy and expensive.”
Most colleges only accept tuition payments in their own currency, and thus international students have to resort to wiring funds or using credit cards, which entail fees and/or bad exchange rates. Using PeerTransfer, they enter the basic information about amount, school, preferred payment method, etc., and transfer their money (in local currency) to PeerTransfer. PeerTransfer then converts it into the desired currency and delivers it to schools within its system. Students can also track their payment status online.
Founder Iker Marcaide is originally from Spain and was admitted to MIT in 2008 to start his MBA. One of his tuition payments “disappeared somewhere over the Atlantic,” and he was inspired to build a better system that didn’t put international students at a disadvantage.
This approach also benefits universities. It cuts down on some of the manual work, as well as unidentified, missing or short balance payments, and also helps schools save money by avoiding banking costs. The company currently works with over 350 educational institutions across North America, Europe, and Australia, including Cornell University, University of Illinois, University of Pennsylvania, and the University of Washington. It has processed payments from over 190 countries.
QED Investors led this round, along with Spanish firms FIDES and KIBO Ventures. Existing investors Spark Capital and Maveron also participated. PeerTransfer is based in Boston and has raised $15 million to date.