…Smarter e-payment solutions could ease menace
As schools across Nigeria reopen for a new term, many private school owners are grappling with a worsening cash-flow crunch driven by unpaid fees and rising operating costs.
Proprietors say fee defaults have left them struggling to meet payroll, maintain supplies, and fund essential services, threatening the stability of private education that serves millions of families nationwide.
Private schools are, in practical terms, small businesses. And small businesses are the backbone of Nigeria’s economy. According to the 2021 National Bureau of Statistics and the Small and Medium Enterprises Development Agency of Nigeria (NBS/SMEDAN) survey highlighted in PwC’s Micro, Small, and Medium Enterprises (MSME) report, MSMEs account for 96.9 percent of businesses, 87.9 percent of employment, and 46.32 percent of GDP. When schools struggle to collect fees, the ripple effects spread beyond classrooms.
Parents are also under pressure. The last academic year brought broad cost increases, from transport to school supplies, and multiple outlets reported families struggling as fees rose with operating costs.
To keep enrolments stable, many proprietors say they have gone softer, allowing instalments, deferrals, and long grace periods. While that keeps classrooms full, it leaves cash thin.
A digital payments gap
The wider economy tells a different story. Nigeria’s digital payment rails are stronger than ever. In 2023, e-payment values hit nearly N600 trillion, up 55 percent year-on-year, while NIBSS Instant Payments (NIP) recorded about N476.89 trillion in H1 2024, up 39 percent from H2 2023. A Visa-commissioned study suggests about 60 percent of Nigerian retailers now accept digital payments.
Yet school fees, recurring, obligation-style payments, lag behind. Parents rely on transfers and reminders; schools bear the administrative cost of ledgers, WhatsApp nudges, and reconciliations. Delays turn into a loop of arrears, promises, and strained relationships.
Nigeria already has the infrastructure to change this. NIBSS Direct Debit, under Central Bank and NIBSS oversight, allows parents to give one-time consent for agreed amounts and schedules. Payments then move automatically on due dates. This system already underpins sectors from utilities to loan repayments but remains underused in schools.
“What would it look like if more private schools moved fee collection from ‘chase’ to ‘consent’? Parents approve once, in advance. On each due date, the agreed amount moves automatically. Schools regain predictability. Administration shrinks. Relationships improve,” Ope Adeoye, CEO of OnePipe stated.
Adeoye stressed that the issue is not about forcing parents into rigid payment models but about easing the strain on both sides. “Schools spend valuable hours reconciling alerts and sending reminders. Parents, on the other hand, face the stress of deadlines and arrears notices. Automating this process brings peace of mind to families and financial stability to schools,” he said.
OnePipe recently introduced PaywithAccount, a tool designed to help schools formalise these consents and collect fees automatically through Nigeria’s direct-debit rails. According to Adeoye, “It is not about making parents pay more; it is about making agreed payments happen on time, with their permission, and with less friction.”
He added that the solution could change how proprietors plan. “Imagine a bursar who spends more time budgeting than begging, or a teacher who never has to doubt payday. That is what predictable cash flow can unlock,” Adeoye explained.
The timing is crucial. Proprietors say mid-term resumption is when arrears and promises pile up. The national conversation continues to weigh the ethics of sending children home for unpaid fees, but the practical reality is the same: defaults cascade into salary delays, cutbacks, and declining quality.
Predictable cash flow offers stability. A teacher who can rely on payday, a bursar who budgets rather than begs, and a school that can plan beyond week-to-week arrears—that is the outcome schools need to serve better, even in tough times.
