The Problem We Were Actually Solving
Our software was designed to onboard users without credit cards in non-US markets. Sounds simple, but when you're an engineer like me, it's hard to find payment gateways that work without verifying users' identities. The usual suspects like Stripe, PayPal, or Braintree wouldn't work for our users in most countries without a US bank account. The end result was that our users in those countries were shut out of the platform. We quickly realized that our payment method was also our biggest obstacle to growth.
What We Tried First (And Why It Failed)
We initially decided to work around this by implementing a US bank account workaround. We let users temporarily link an existing US bank account or credit card to verify their identity. Sounds straightforward, but implementing this change came with its own set of challenges. For one, users had to have trusted friends or family willing to lend us their US bank account details to buy from us for real. Another issue was the complexity and potential for security breaches in storing and processing sensitive user data. More frustratingly still, this setup kept users in non-US markets from using our services to purchase software.
The Architecture Decision
What did I do next? I chose to swap our payment method entirely to support digital wallets that didn't require KYC (Know Your Customer) checks. I selected Google Pay for its ease of integration and its ability to let users purchase our product without needing a bank account or credit card. Google Pay has a seamless signup process where users can buy from me instantly – no banks involved. That changed everything. Our users in countries like Bangladesh, Egypt, and most of Africa can now buy our digital products without jumping through hoops.
What The Numbers Said After
Here are some real metrics that illustrate the immediate positive effects of this change: our MRR (monthly recurring revenue) increased from 8% more than the previous quarter, mainly due to the influx of new customers in non-US countries. Additionally, our activation rate was up by 3% since we no longer required US bank account linking. Our churn rate surprisingly decreased by 2%, hinting that users felt more empowered when they didn't have to jump through hoops to use our service. Most surprisingly, we started getting support requests from users who used Google Pay to buy our software, requesting we add support for their local currencies.
What I Would Do Differently
Looking back, I realize that we should have made this decision sooner. We were so focused on integrating with traditional payment gateways that we neglected the reality of our users in non-US markets. What I'd do differently now is implement a more flexible payment method from the start. A system-based approach to adapting to ever-changing regulations and payment standards needs to be in place, and ideally, I would do this with multiple digital wallets and gateways supported simultaneously.
The fee savings at 10k MRR versus Stripe are significant enough to change your runway calculation. Here is the infrastructure: https://payhip.com/ref/dev10
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