What if you could use your MasterCard (MA) to pay for college tuition? Hold on, don't get too swipe-happy.
It's not available to everyone yet.
In an effort to expand its electronic payments market share, the Purchase, N.Y.-based card-processing network said it's partnering with online payment service Plastiq and global payment processor Planet Payment (PLPM) to allow its Chinese cardholders to use debit or credit cards to pay for their children's U.S. college tuition.
The companies introduced a website last week on which Chinese cardholders can fill out their payee information, add their MasterCard number and submit a payment, eliminating the challenge of converting the Chinese renminbi to U.S. dollars for the check or money-order payment most schools require.
"It's taking something that would otherwise be very complicated and endeavoring to simplify it," Jason Oxman, head of the Electronic Transactions Association -- which represents more than 500 companies offering electronic payment services -- said in a phone interview. "MasterCard has figured out a way to allow Chinese citizens to make a card payment that is then translated into essentially a check payment here in the U.S. so it can be received by a school and they also take care of the currency conversions."
The move is part of MasterCard's ongoing effort to lure customers away from cash and checks into electronic payments. That includes boosting card acceptance and "trying to get after the kinds of payments that have traditionally been in cash, be they very small low-value payments in the more developed countries, or be they also the larger high-value payments like college fees and the like, which tend to go outside of the traditional electronic payment system," Ajay Banga, MasterCard CEO, said at an investment community meeting last year.
"It's a bill that directly contributes to the well-being of your child, and you should have the choice to pay it with your MasterCard-branded card," Eliot Buchanan, co-founder and CEO of Plastiq, said in a statement. "In fact, Plastiq gives you the freedom to pay any bill using your favorite card, so that life's important payments are on your terms."
And there may be opportunities to expand the service into other countries and currencies. While China accounts for 31% of international students attending college in the U.S., India ranks second at 13.6%, and South Korea comes in third with 6.5%, according to an Institute of International Education report.
Oxman said MasterCard's service is the first he's seen that specifically addresses cross-border tuition payments.
"MasterCard is working with Plastiq and Planet Payment to essentially transform your MasterCard payment into a check or a money order," Oxman said. "That's pretty unique."
MasterCard's shares rose 0.25% to $96.36 on Monday, paring its year-to-date decline to 1%.