Digital wallet surge among college students, study reveals

By Vriti Gothi

Gen Z college students are transforming the way they pay, and many universities are struggling to keep up. The 2025 Higher Ed Innovation Index, released by Transact + CBORD, reveals that student payment preferences are becoming increasingly complex, creating operational and financial challenges for higher education administrators.

The study shows that digital wallets have now overtaken traditional checks as the preferred mode of tuition payment, with 62% of institutions reporting a surge in their use. This milestone underscores the growing influence of digital-native behaviours among Gen Z students, who expect the same speed, convenience, and seamless experience from their universities as they do from modern Fintech platforms.

In parallel, 67% of schools reported a rise in mixed payment methods, such as students splitting tuition between a credit card and cash. While this trend offers flexibility and control to students, it has created new difficulties for finance departments, which must now reconcile multiple payment sources across different systems.

The fragmentation of payment methods has led to mounting back-end pressures. According to the report, 44%of institutions have seen an increase in operational costs tied to managing multiple payment platforms, while 40% have noted higher administrative workloads. These findings suggest that the traditional university billing model is increasingly incompatible with the digital expectations of today’s students.

Laura Newell-McLaughlin, Chief Commercial Officer at Transact and CBORD, explained that universities are now being forced to think like FinTech companies. “Higher education institutions are trying to modernise their payment infrastructure to align with how Gen Z transacts, but the pace of change is rapid,” she said. “Universities must now build ecosystems that integrate seamlessly across digital wallets, cards, and traditional methods.”

The report highlights a broader shift across the education sector, one where FinTech-driven solutions are becoming essential to streamline campus payments, reduce administrative strain, and enhance the student experience. With digital wallets, contactless payments, and hybrid transactions becoming the norm, the traditional bursar’s office is transforming into a FinTech-enabled hub designed for agility, transparency, and efficiency.

As Gen Z continues to redefine payment behaviour, colleges face a critical juncture: adapt their financial systems to meet these new expectations or risk being left behind in a rapidly digitizing landscape.