Five ways digital payments can transform ed-tech companiesBy Industry Contributor 29 August 2023 | Categories: news
By Hayley Hopwood, Head of Revenue, Paystack
Ed-tech, short for Education Technology, has become a thriving industry with substantial economic impact. This sector combines hardware, software, and educational principles to offer improved and convenient learning experiences. Presently, ed-tech is valued at over US$115 billion, and its growth shows no signs of slowing down. Projections indicate that by 2030, its global value will skyrocket to an estimated US$433.17 billion.
Companies in this sector serve a number of niches, catering for everyone from young children to career professionals looking to upskill themselves. Despite that diversity, it can be challenging for ed-techs to stand out from the competition. In South Africa, there are more than 380 ed-tech startups. And that’s to say nothing of the more traditional education providers and other organisations which have branched out into the sector.
Building great customer experiences is a critical way to stand out and holds particular significance for ed-tech companies. After all, ed-tech companies often need to keep their customers engaged for extended periods, possibly weeks or months - it can be all too easy for people to fall out of an ed-tech course, particularly among working-age customers who have to balance studies with work and family commitments. Ed-techs therefore need to prioritise exceptional customer experiences, to effectively attract and retain their customers.
While that rightfully means building successful learning experiences, great customer experiences go far beyond that. They cover the entire customer journey, including payments. With that in mind, here are five ways that ed-tech companies can use technology to retain customers, increase revenue, and stay competitive.
Improved satisfaction from the start
Most ed-tech companies require customers to pay before accessing a product, especially if it’s a course. But if a customer encounters friction in the payment process, how confident are they going to feel about the overall offering?
Research shows that 88% of UK consumers (the number is likely to be similar in South Africa) will abandon a purchase if they experience any kind of friction in the payment process. While the number might be lower in the education sector (people may well be more determined when it comes to purchases designed to aid self-improvement), that statistic is still a powerful reminder of why utilising the right payment tech is vital to building a good customer experience.
Simplified subscription management
Another benefit that the right payment tech offers ed-tech companies is simplified subscription management. Many ed-tech firms run on a subscription-based model, meaning that they offer access to educational content or services on a recurring basis.
With effective payment technology, these companies can automate their subscription billing, and reduce their overall administrative burden and potential billing errors. The right payment tech can also make for easier handling of renewals, upgrades, and cancellations, further enhancing the customer experience.
Better security and trust
Almost every transaction we make is based on some level of trust. For instance, when you hand over money at your local bakery or market on a Saturday morning, it’s a symbol of your trust that the bread you’ve bought is fresh and worth eating. The same is true when you sign up for an ed-tech company’s course or product. No matter how much background research you’ve done and how many reviews you’ve read, you’re still applying a large degree of trust that the purchase will be worthwhile.
One of the fastest ways for any organisation to lose that trust is to be subject to a data breach. The right payment tech can help ameliorate the risk of such a breach. By using a provider with a strong security record, strong data protection controls, and high level of compliance with industry standards, ed-tech companies can help keep their customers safe and build a trust-focused customer experience.
Improved international reach
While some ed-tech companies are focused on specific geographic markets, many understand and want to take advantage of international opportunities. Good payment tech can help them grow internationally by supporting multiple currencies and international payment methods.
The right payment tech can also make it easier for the ed-tech firm to expand its reach and tap into new markets without barriers related to payment processing.
Enhanced data and insights
No organisation (unless it happens to get very lucky) can build a great customer experience without high-quality data and insights. Knowing how customers find the product, when most cart abandonments take place, and how many returning customers you have, can all be crucial to identifying areas for improvement.
The right payment tech can provide ed-tech companies with the data necessary to gain those insights. Ideally, you should look for a provider that allows you to download that data at a granular level and which allows you to easily pull your payment data into your internal dashboards. It should also provide detailed reporting on customer behaviours, which can then be integrated with other data to provide a more complete picture of how the customer experience can be improved.
A vital part of staying competitive
Ultimately, in a challenging economic environment where ed-techs must work harder to attract and retain customers. Investing in the right payment tech should be seen as a crucial strategy for any ed-tech firm looking to remain competitive.
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