November 23, 2015
Payment processing integration for startups can be a nightmare sometimes, but we wanted to help remind everybody that it doesn’t have to be. In fact, payments can be incredibly fun – it’s all about how you look at it.
At Celebrate 2015 we invited Sneha Menon and Justin Woo, both from Braintree PayPal, to talk about how startups can make payments fun. After all, it’s something startups need to deal with at one point or another on their journey.
Menon kicked off the workshop by pointing out the top three mistakes startups tend to make before integrating with a payment processor. Lesson number one, and this was the most important, is that if you wait until the last minute to integrate with a payments service you’re going to have a bad time.
Aside from that, it’s foolish to think that every business model will be accepted by a payment processor. That is to say, each startup company falls under a different risk category that either aligns or disagrees with the ethos of a payment processing company.
For example, if you’re Instacart and you’re delivering alcohol, you’re going to need to prove to your payment processor that you have the license to distribute. Not only that, you have to prove that you have internal processes ensuring you don’t sell to minors and enough credit history to tide you over in case of emergency. By knowing which risk category you fall in, you can talk to your payment processor to mitigate risk.
The second mistake startups make is that they choose not to accept multiple payment options, like both PayPal and credit cards. The majority of the people in the tech world are savvy enough to understand that it’s alright to give credit card information to early companies. The general populace might not feel as comfortable with that though: you have to know your demographic and the different options available to you.
“I’ve had instances where I’ve had startups come to me and said, ‘Sneha I’ve added another payment option and guess what? I got 50 percent conversion rate.’ That’s 50 percent more people paying money,” says Menon. “You don’t want to restrict yourself to just credit cards. And go with a payment processor who will scale with you for different demographics and markets as well.”
The third thing is to pay attention to analytics. That is, when you’re building the first iteration of your product you can integrate with a platform like Google Analytics to tell you where your users come from and what browsers they’re using. But as soon as you have a paid component to your startup, you have to have more granular data: who are your top 10 customers, what’s the percentage of people upgrading or downgrading payment plans?
What really blows my mind is that all of this is only the first step towards locking in the right payment processor for your company. From here you can start to dig in even more, which is what the workshop was all about. Here’s the full video:
Image Credit: From the video
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