The Problem We Were Actually Solving
The problem we were trying to solve was not just about getting payments to work in these countries, but also about ensuring that our creators could sell their digital goods to their audience without any friction. We were solving a problem of trust - how do we ensure that our creators can trust that the payments will go through, and that their audience can trust that they will receive the products they purchased? We knew that if we couldn't solve this problem, our creators would leave and our audience would look elsewhere for digital goods.
What We Tried First (And Why It Failed)
We initially tried to integrate with several alternative payment solutions that were designed for emerging markets, but they all had issues with reliability, security, and support. One of the solutions we tried, called MobiCash, would often freeze our users' funds for arbitrary reasons, causing a significant increase in churn and support tickets. Another solution, called Paymaya, had a notoriously bad user interface that made it difficult for our users to complete payments.
The Architecture Decision
After trying several alternative payment solutions, we decided to focus on building our own payment processing system from scratch. We chose to use a combination of services like Stripe Connect for payment processing and Alipay for China-specific payments, but we also built a custom payment gateway using the PayU API to facilitate local payment methods in emerging markets. This decision was not taken lightly, as it meant we would have to handle all the nuances of local payment methods and currency conversion ourselves.
What The Numbers Said After
While building our own payment processing system was a significant undertaking, it paid off in the end. Our activation rate improved by 25% after we switched to our custom payment processing system, and our churn rate decreased by 30%. This was largely due to the increased reliability and security of our payment processing system, which gave our creators and audience confidence in our platform.
What I Would Do Differently
In hindsight, I would have done more research on emerging market payment solutions before deciding to build our own payment processing system from scratch. While it was a successful decision, it was also a costly one in terms of time and resources. If I had to do it again, I would have explored more options and partnerships with local payment providers to see if they could meet our needs without us having to go it alone.
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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