Listen to this articleFlywire is the number one way foreign students today pay tuition at over 800 educational institutions across 12 countries on six continents. The company processed over $1B in tuition payments in the 2014/2015 academic year. At the start of the year, Flywire secured a $22M funding round led by Bain Capital. Below is our interview with Mike Massaro, CEO of Flywire. Mike joined Flywire as head of sales and marketing in 2012, and was appointed CEO in December 2013. Prior to Flywire, Mike served as Vice President of Strategic Accounts & Corporate Development at Carrier iQ, ranked #9 on the Wall Street Journal’s 2011 list of Top 50 Venture-Funded Companies.
Q: Mike, tell us something more about Flywire’s origins?
A: Four years ago, Flywire (formerly peerTransfer) started out with the goal of making a highly complex and frustrating tuition payment process easier and more economical for international students. By offering favorable exchange rates, total transparency for both students and schools, personalized customer service and a simple online experience, Flywire quickly became the preferred way for foreign students from around the world to pay their international tuition at leading schools.
Today, Flywire is the number one way foreign students pay tuition at over 800 educational institutions across 12 countries on six continents.
We’ve built a payment platform that connects institutions with consumers from around the world making it easier, more efficient and cheaper for students to pay their tuition, room and board, and for education institutions to reconcile those payments. The cross-border platform is highly scalable and accepts payments in more than 70 currencies via bank transfers, online banking, and credit and debit cards − at exchange rates that can offer significant savings compared to rates offered by international banks. The company processed over $1B in tuition payments in the 2014/2015 academic year, and will exceed $2B in payments in 2015/2016.
Q: Besides your success in cross border tuition processing, what other significant events marked this year?
A: At the start of the year, Flywire secured a $22M funding round led by Bain Capital. These funds are helping us pursue our mission to become the global leader in processing large-ticket, international payments. Education was our first market; medical tourism payments – just announced in October, is our second. Over the last few months we doubled our HQ space in Boston and opened a new office in Valencia, Spain – tripling our space in that country’s third largest city. Additionally, in July, we opened our first office in Shanghai, China securing a local presence in Asia-Pac, the world’s largest origin market for international students. And in early October, we acquired Uni-Pay, a UK-based tuition payment provider, adding 60 UK educational institutions to our client roster.
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Q: Where do you see your growth in the tuition payment processing market coming from next year?
A: Every year more than 900,000 students from over 200 countries come to the US to attend college. Our three largest markets – China, India and Korea – account for 52% of total student payments processed. There is remarkable growth in students coming from China, with nearly 30% of international students originating from that country. Nigeria is also big, in the top 10 for US and top 3 for UK admissions. There’s also a large and growing trend toward international students’ attending K-12 boarding schools and high schools in the US. Flywire works with over 100 boarding and private high schools. With an estimated $24B in tuition and living expenses for international students in the US, cross-border payment tuition payment is big business – and getting bigger every year.
Additionally, there is an increasing number of students from both the US and other countries studying abroad in Europe and Australia – markets where Flywire has a strong and growing presence. Overall, we’re adding approximately 50 schools to our client roster every quarter. The acquisition of Uni-Pay makes us the #1 processor of international tuition for UK-based education institutions.
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Q: You mentioned your recent entry into the international medical tourism payments market. Tell us about this move?
A: The Flywire payment platform will soon be available for international consumers seeking medical treatment at healthcare facilities around the world, beginning at institutions in the U.S. There is a lot of synergy between the education market and the medical tourism market. In fact, schools with hospital systems started coming to us because their medical executives were seeing many of the same challenges as their educational colleagues. International patients have difficulty paying their foreign medical bills, while hospitals have difficulty collecting and reconciling these payments. These are large dollar transactions coming from consumers all around the globe. It’s a confusing process for patients and they are paying really high exchange rates without even knowing it. At the same time, it’s also very difficult for hospitals to reconcile these payments because of the way traditional channels handle them. Additionally, hospitals aren’t structured to handle the many international payment-related questions that arise 24/7. These are very similar challenges to those we are solving in education.
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Q: Where is the growth in the medical tourism market coming from and do you have any customers on-board yet?
A: The market for healthcare is becoming truly global. About 11 million patients worldwide received health care outside of their home country last year and spent over $38B. That number is expected to grow by as much as 25% per year, to $55B by 2019.
The reasons patients travel for care vary: specialized treatments and facilities that may not be available at home; avoiding long wait times at home; obtaining lower-cost treatment; and in many cases seeking the best possible care for themselves and their families.
Initially, Flywire is focused on US medical facilities. 1.2 million international patients seek treatment in the US each year. We’re in contract with a handful of institutions already, and expect to sign many more over the next 9-12 months.
Medical tourism has lots of different points of origin. People travel from Southeast Asia to other countries in Southeast Asia to look for lower cost medical procedures. Most patients who travel to the US come in search of the best possible medical care for specialized surgeries, cancer treatments, and rehabilitation. Many US hospitals are building programs or facilities overseas – in the Middle East and China, for example – to better serve the market of international patients.
Q: In summary, how will you look to balance your focus on these growing and emerging markets?
A: The education payment business continues to grow and Flywire has established a leadership position that we intend to build upon with great efficiency.
International healthcare payment is an emerging market, representing a huge and growing opportunity for Flywire. We feel we can leverage our strengths in the international education payment space to jump start our efforts here. Flywire has a proven solution for addressing these types of challenges – one that adds real value for both healthcare facilities and their international patients. The problems we are addressing for cross-border tuition payment processing are virtually the same – for both the patient/student and the education/healthcare institution.
The world is a much smaller place than it used to be and many consumers have the opportunity to travel the world – to study, to seek medical alternatives, purchase real estate, vacation and more. Wherever these global citizens go, Flywire can help by make their lives easier by streamlining the cross-border payment process – for both the payer and the payee. Whether in education and medical tourism today, or other markets in the future that require large, cross-border payments, Flywire’s mission is to help connect the world through simple, secure payments, helping support a lifetime of global experiences.
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