ABN Amro finds a bigger business case for P-to-P payments

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ABN Amro is enabling its Tikkie social P-to-P app to send tuition payment requests to students, a dramatic expansion from the transaction types the bank designed the app for.

"Tikkie is an app to get money back for when people are out for drinks or dinner or stuff like that," said Freek de Steenwinkel, head of digital advisory for ABN Amro in Amsterdam.

The Dutch University of Groningen is using Tikkie to contact students who are late paying tuition fees. Students usually pay via standing order, but in some cases that payment is declined, causing students to be barred from lectures and online material.

Tikkie is a year-old app that allows people to send payment requests to their WhatsApp contacts. These requests contain a link to iDeal, the Dutch online payment service. The iDeal rails directly credit the customer's account.

The university traditionally sends paper mail or email notices, but predicts that Tikkie will be more effective at getting students' attention.

"The university has found that students don't always read their email, so it's hard to get in touch with them," de Steenwinkel said. "They're looking for other means to get in touch with them."

In the year that Tikkie has been in the market, ABN Amro has found 70% of Tikkie requests are paid on the same day, compared to traditional means where 50% of payments take more than a week and 20% of payment requests go unanswered for more than a month. "It's not that people don't want to pay; they forget or postpone paying," de Steenwinkel said.

Tuition is proving to be an appealing use case for new fintech plays. Tuition payments are used to diversify cross-border payment services, and to expand payment types for Chinese consumers traveling or staying abroad. Tuition has also served as a flagship use case for a more diverse range of payments technology.

"We're trying to improve tuition collection by making it easier to pay," de Steenwinkel said, adding Tikkie is also expanding into travel payments, airline tickets and ticketing for concerts and festivals. "It's the broadening of use cases that we're looking for."

For social transfer apps, tuition is a welcome way to introduce services besides social group payments. "Split the diner check" has been the go-to example for transfer apps for what seems like decades, but tuition could prove to be more compelling because it is for something ostensibly more serious than a bar tab.

"The university is tapping into the app's popularity to reduce late payments of tuition fees," said Zil Bareisis, a senior analyst at Celent. "It's less about the size of the payment and more about a good example of a use case where requesting a payment addresses an existing issue and demonstrates the value of such apps."

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