As the number of Chinese students studying abroad increases, Geoswift is building out relationships with language schools and universities to mend the disjointed process of collecting tuition payments.
Chinese students pursuing full-time master's degrees at universities in the U.K. accounted for 23% of the total, compared to British students which accounted for 26%, according to a 2014 report from the Higher Education Funding Council. The council predicts that Chinese students will account for 44% in of the total in 10 years.
"That keeps growing and growing; there's a big opportunity for us to make it easier," said Raymond Qu, president and CEO of Geoswift. This month, the remittance provider announced an expansion of its system to universities throughout the United Kingdom.
Geoswift works with Chinese payment companies to provide a local payment option. Otherwise, to make a tuition payment to a foreign university, students and their parents typically have to visit a bank, fill out forms and then wire the tuition payment to the university's bank account.
"This cost them time and money and was very complicated," Qu said. "Maybe five to 10 years ago this was OK, because there wasn't many people from China moving overseas to study."
Geoswift works with China UnionPay, the biggest payment card provider in China; AliPay, the biggest payment processer in the country; TenPay, the second biggest processor; and allows interbank transfers for domestic payments.
"We cover more than 98% of the population in China," Qu said. This is especially important since more than 91% of Chinese students are supported by their families at home, he said.
Altogether Geoswift connects more than 15,000 Chinese students to more than 700 universities in mainland Europe, the U.K., Australia, the Asia Pacific, Canada and the U.S.
The U.S. is the first choice of Chinese students for studying abroad, Qu said. More than 900,000 Chinese students have just started a semester at a U.S. school, he said, with more than three million worldwide. The U.K. is the second choice for Chinese students.
When it comes to money in/money out, China has historically been a bit authoritarian, but the country may soon relax some of the current restrictions, according to Qu, who is working with a group of banks and processors to make this happen.
And there are already signs of progress. Alibaba has been courting both PayPal and Apple. Plus several internationally-based companies are trying to squeeze their way into the Chinese market, which has quickly adopted mobile payments. Alibaba's payment affiliate, AliPay, reported its mobile payment share rose to 54% in the first 10 months of 2014 from 22% in all of 2013.
MasterCard launched its MasterPass digital wallet for in-app payments in China late last year. And in February, Xoom launched its money transfer service in the country and Mozido bought PayEase to get a foothold there.
Even though China has allowed its payments ecosystem to expand, it's still quite tough for U.S. companies to move into the market and deliver services, which is why Western Union partnered with Geoswift in January last year.
"Western Union has been in China for some time...but there are cultural differences and language barriers," said Qu. Geoswift "provides hotline numbers in China and customer service here that speaks the local language."
Last summer, Geoswift's daily volume surpassed $6 million, Qu said.
Geoswift's biggest competitor still remains the black market remittance providers, said Qu, which is why the Chinese government is loosening up restrictions. The Chinese government "wants a clean and legal channel for remittance."