Costs of Electronic Payments in K-12 Schools

Over a school year, students incur a series of expenses for school meals, bus passes, after-school programs, and technology and materials needed for class, among other costs. As the broader payments ecosystem continues shifting towards more digital options in the wake of the COVID-19 pandemic, school districts are increasingly contracting with payment processing companies to provide an avenue for families to pay school-related expenses online. While convenient for both families and school districts, electronic payment options present new costs and challenges for the families using them.

To better understand the emergence of electronic payment processors in K-12 schools, the CFPB analyzed publicly available information from the 300 largest public schooldistricts in the U.S. and held unstructured interviews with school officials and companies offering online platforms for school lunch payments. This spotlight highlights average costs and potential risks for families using electronic payment platforms and reviews the market size and landscape of companies offering them, building upon initial observations referenced in the Fall 2023 edition of Supervisory Highlights.

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