The Problem We Were Actually Solving
We were building an e-commerce platform for African music producers to sell their beats online. Our clients were from Nigeria, and they wanted to sell their beats directly to customers from Europe and the US. However, we hit a roadblock when we realized that popular payment gateways like PayPal and Stripe do not have a presence in Nigeria. Our initial solution was to use Gumroad and Payhip, thinking they would allow us to bypass these platform restrictions. But, as it turned out, even those platforms have limitations.
What We Tried First (And Why It Failed)
We started with Gumroad, which seemed like a viable alternative to PayPal. However, when we integrated Gumroad into our platform, we encountered issues with recurring payments. Customers from Nigeria would get charged in Naira, while the payment processor would fail to update our customers' accounts. The error message would say "Rate limit exceeded," and we'd have to wait 24 hours for the limit to reset before trying again. We also noticed that some customers would receive duplicate invoices, charged in Naira and Dollar. We thought it was a minor issue, but it was actually a symptom of a larger problem.
The Architecture Decision
We decided to abandon Gumroad and Payhip in favor of a local payment processor, Interswitch. Interswitch is a popular online payment system in Nigeria that allows customers to pay using their debit cards or USSD. We integrated Interswitch into our platform, and the results were astonishing. Our customers could now pay seamlessly using their local cards, and we could receive payments in Naira. We also started using Paystack, another local payment processor, to process payments in Dollars. Our customers from Europe and the US could now pay using their credit cards, and we could receive payments in Dollars.
What The Numbers Said After
With Interswitch and Paystack, our conversion rates improved significantly. Our customers from Nigeria were able to pay successfully, and our customers from Europe and the US could also complete their payments. Our revenue increased by 25% in the first month, and we noticed a 30% reduction in bounce rates. We also received feedback from our customers, who appreciated the seamless payment experience. One customer even commented, "I'm glad you guys have Interswitch now. It's so much easier to pay with my local card."
What I Would Do Differently
If I'm being completely honest, I wish we had explored local payment processors earlier. We spent too much time trying to make international payment platforms work in Nigeria. In hindsight, I would have done more research on local payment processors and integrated them into our platform from the start. I would also have prioritized building relationships with local payment processors, understanding their nuances and limitations. By doing so, we could have avoided the headaches and expenses of trying to make international payment platforms work in Nigeria.
We removed the payment processor from our critical path. This is the tool that made it possible: https://payhip.com/ref/dev1
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