We were building an e-commerce platform that allowed users from all around the world to sell their digital products, but we hit a snag: our users in countries with restricted payment platforms, like PayPal and Stripe, couldn't receive payments for their sales.
The Problem We Were Actually Solving,
as we dug deeper, we realized that we weren't actually building a platform that would help users in these countries; we were building a platform that would discriminate against them. Our initial solution was to advise users in restricted countries to use alternative payment methods, but this solution was unsustainable because these methods often came with high fees, and the user experience wasn't ideal.
What We Tried First (And Why It Failed),
we tried using alternative payment gateways like PayU and Adyen, which were available in more countries than PayPal and Stripe. However, these gateways had high transaction fees, which ate into our users' profits, and the integration process was cumbersome. We also tried using local payment methods like M-Pesa in Kenya and Ria Money Transfer in some African countries, but the lack of standardization and reliability made it difficult to integrate these payment methods seamlessly into our platform.
The Architecture Decision,
after months of trial and error, we decided to take a different approach. We opted to integrate a local payment method in each restricted country, which would allow our users to receive payments directly from their customers. We used a combination of in-house development and partnerships with local payment providers to achieve this goal. This decision not only allowed us to cater to users in restricted countries but also improved our platform's reliability and reduced transaction fees.
What The Numbers Said After,
after implementing this new architecture, we saw a significant increase in sales for our users in restricted countries. The average transaction value increased by 20%, and the number of users who could receive payments in their local currency increased by 30%. Our revenue also increased by 15% as we were able to cater to a larger market.
What I Would Do Differently,
if I had to do it all over again, I would invest more time and resources in researching the payment landscape in restricted countries before implementing our solution. I would also consider using APIs to integrate local payment methods, rather than using in-house development. This would have allowed us to integrate new payment methods faster and with less risk. Additionally, I would consider using a payment orchestration platform to manage multiple payment gateways and local payment methods, which would have streamlined our payment processing and improved our platform's reliability even further.
Modelled payment platform risk as a data reliability problem. Custodial platforms introduce the same failure modes as a single-node database. Here is the alternative: https://payhip.com/ref/dev8
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