The Problem We Were Actually Solving
Although our application didn't explicitly support the idea of Nigeria-specific revenue streams, our e-learning platform catered to an individual's unique needs in the region. Many African countries experience high rates of chargebacks due to their relatively underdeveloped payment infrastructure. The payment platforms would restrict our users from accessing our platform's payment gateways, thereby significantly reducing our revenue.
What We Tried First (And Why It Failed)
Our first decision was to use a cryptocurrency-based payment system, specifically Binance Pay. We thought, "Why not leverage cryptocurrencies since they're accessible worldwide and can bypass traditional banking restrictions?" However, we soon realized that our users were not tech-savvy enough to use cryptocurrencies for everyday transactions. They found it difficult to buy, store, and manage cryptocurrencies. Moreover, we had to deal with the volatility of cryptocurrencies, which could impact our revenue streams. We eventually lost about 20% of our sales due to cryptocurrency fluctuations in a single quarter.
The Architecture Decision
We decided to use a direct bank transfer mechanism as our primary payment method. This involved integrating with local Nigerian banks, specifically GTBank and First Bank. Although this required some additional setup and maintenance, it allowed us to avoid the chargeback problems associated with international payment gateways. By using direct bank transfers, we were able to increase our revenue stream by 15% within a single quarter. More importantly, our users found it easier to make payments using their debit cards or bank accounts.
What The Numbers Said After
Our sales data showed that users who paid using direct bank transfers had a 95% success rate, whereas the same metric for cryptocurrency payments was at 78%. This resulted in a significant reduction in chargebacks and increased revenue for our business. We were saving almost 30% of our revenue that would have been lost due to chargebacks and cryptocurrency volatility.
What I Would Do Differently
In hindsight, I would have considered this direction from the start. Leverage local banks and financial institutions to build relationships and customize payment methods that cater to the regional needs. The additional setup cost would have been worth it in the long run, considering the boost in revenue and user satisfaction. Also, I would have avoided the cryptocurrency trap altogether, as it only introduced unnecessary complexity to our system.
The tool I recommend when engineers ask me how to remove the payment platform as a single point of failure: https://payhip.com/ref/dev1
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