Blind Spot #2: The Fragmentation Tax
Most institutions don’t rely on a single payment system—they juggle multiple platforms, each with its own rules, processes, and costs. What seems like standard practice comes with a hidden price tag: staff inefficiency, duplication of effort, and missed opportunities for optimization.
The Scope of the Problem
Our research found that 88% of institutions operate with fragmented payment systems:
- 78% use 2–3 systems
- 10% use 4–5 systems
- Just 12% have a single, unified system
Beyond operational inefficiencies, this fragmentation creates additional PCI compliance complexity, as institutions must manage security protocols across multiple vendors rather than maintaining a single, unified compliance framework. This also forces staff into manual processes that drain time and resources. In fact, 63% report that reconciliation is still handled manually, often across multiple systems that were never designed to work together.
Why It Matters
Manual workarounds can waste hours and hide the true costs of payment operations. Leaders often don’t know how much staff time is tied up in reconciliation or how fees vary across providers. Without this visibility, it’s nearly impossible to make informed decisions about technology investments or staffing needs.
The Hidden Cost
- 39% of institutions dedicate 11–20 staff hours each week to payment reconciliation
- 61% of institutions manually track past-due accounts in a spreadsheet
At an average fully loaded staff cost of $27/hour, that could equate to more than $22,000 annually in wasted effort for just one institution
Multiply that across dozens of manual processes, and the “fragmentation tax” can easily reach hundreds of thousands of dollars each year
What Leaders Are Saying
When asked about their top payment challenges, institutions cited:
- Manual reconciliation (56%)
- Staffing limitations (44%)
- Inability to leverage payments data for insights (42%)
- Fragmented payment systems (29%)
A typical mid-sized university could waste $36,500 a year on manual processes.
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