Paddle Billing
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The company
Founded in 2009 by Andrey Meshkov and his business partner, AdGuard began as a simple ad blocking solution. The company has since evolved into a comprehensive privacy protection platform serving over 150 million users worldwide.
Andrey had originally launched an analytics startup, but after seeing how invasive web analytics could be, the AdGuard founders were inspired to create a product they could monetize while creating a safer and cleaner internet for their users. As the need for privacy protection became more prevalent over the years, the company evolved from a simple ad blocker to a suite of privacy protection tools.
AdGuard slowly transformed from just an ad blocker to a tracking protection software. And then it became our main focus. Everything that we do revolves around tracking protection and blocking."
Andrey Meshkov, Co-Founder and CTO, AdGuard
The company now offers over 15 privacy products including AdGuard DNS, AdGuard VPN, and AdGuard Mail, all designed to shield users from ads, trackers, phishing and malware.
As a product-first organization, AdGuard has maintained its focus on solving real user problems and building solutions that protect users across every platform and device they use.
The challenge
AdGuard's growing global user base created significant payment challenges that threatened to limit their growth.
At first, AdGuard’s payments were managed by Digital River, another Merchant of Record. However, Andrey found that the platform didn’t support Alipay, which meant that they couldn’t serve AdGuard’s growing userbase in China.
At the time of integration, PayPal was another payment method that was key to AdGuard’s growth, as Andrey had measured significant conversion differences without it. He knew that going forward, they wanted additional PayPal support.
Looking to switch payment platforms, Andrey and his business partner briefly considered Stripe and went to their networks for advice. They found that while Stripe’s initial costs look good, the additional cost of tax compliance meant the value wasn’t what they first thought. Another concern was Stripe’s lack of customer support.
Stripe is too big to care about their customers. We would like to maintain some contact with people from the payment provider, so that we could have a human there that can answer our questions."
Andrey Meshkov, Co-Founder and CTO, AdGuard
They also found there were geographical limitations with Stripe not supporting companies based in Cyprus, where AdGuard had been based since 2014.
AdGuard needed a solution that could handle their complex global requirements while allowing them to maintain the product focus that had led to their success.
The solution
What can I say? It was easy. Paddle’s API is simple to integrate.”
Andrey Meshkov, Co-Founder and CTO, AdGuard
AdGuard chose Paddle as their Merchant of Record in 2015 and has continued to scale ever since by reducing complexity and risk and increasing revenue.
What I liked about Paddle is that the payment widget was very nice, and it was better from a conversion point of view. What made Paddle different was that it was easier to integrate and it was handling taxes, which is important. Other providers weren't doing that back then."
Andrey Meshkov, Co-Founder and CTO, AdGuard
The ability to offer customers different payment methods in different regions was another reason that Andrey chose Paddle. And without wanting to relinquish full control over the payment process, Andrey appreciated the level of flexibility that Paddle provided.
We have a complicated structure because we control a lot of things on our side like pricing in different geographies, emails, etc. It's rather easy to integrate with Paddle and keep doing that. There are some other payment providers that are not that flexible. On one hand, Paddle’s simple to integrate. But, on the other hand, it's very flexible in how the integration will work."
Andrey Meshkov, Co-Founder and CTO, AdGuard
The results
Improved conversion rates
It all boils down to conversion rates, whether it’s stable or not, whether the payment provider is capable of renewing the subscription successfully.”
Andrey Meshkov, Co-Founder and CTO, AdGuard
AdGuard saw immediate improvements in their payment conversion rates with Paddle.
We compared it with our payment provider back then, and even on a simple use case of just credit card conversions, Paddle showed better results. So basically, it's a direct business benefit."
Andrey Meshkov, Co-Founder and CTO, AdGuard
Seamlessly selling to businesses
With AdGuard DNS, the company had the opportunity to reach new business markets, and Paddle’s invoice payment system helped them launch an enterprise product.
We have a B2B offering as a part of AdGuard DNS, and enterprise clients prefer to pay through invoices, not with cards. We didn't want our accountants to work extra, and we were looking for a simple solution, and there was one. We could generate invoices right inside Paddle.”
Andrey Meshkov, Co-Founder and CTO, AdGuard
Being able to provide customers with a full breakdown of costs saves resources that can be better used elsewhere in the business.
Now we have an integration with Paddle invoice generation, the process is automated and it just saves us a lot of time.”
Andrey Meshkov, Co-Founder and CTO, AdGuard
Dedicated PayPal support
While fewer AdGuard customers use PayPal today, the need for support was crucial at the time of integration. Having measured conversions, there was a considerable difference once the payment method was added to AdGuard’s checkout.
What stands out about Paddle is they accept PayPal into their own wallet, while other payment providers require vendors to have their own PayPal wallet. This would mean we’d have to work directly with PayPal, which is atrociously bad. So Paddle shields us from them, and it’s great."
Andrey Meshkov, Co-Founder and CTO, AdGuard
Consistent global tax compliance
Sales tax compliance on a global scale is essential for a company of AdGuard’s size.
As rules and regulations have changed over the last decade, Andrey is grateful that Paddle has taken away the burden of keeping up with evolving sales tax requirements.
It's hard to imagine how much time we would have to spend to be tax compliant on our own, because every country is different. And in the US, it's like a state tax, not just a single tax like in Europe. It would be very, very costly, in terms of time, to implement anything like that.”
Andrey Meshkov, Co-Founder and CTO, AdGuard
The future
AdGuard continues to expand their privacy protection suite with exciting new products in development.
AdGuard wallet is not yet launched, but I'm pretty excited about it. We also have plans to launch our own password manager, and I'm excited about that too."
Andrey Meshkov, Co-Founder and CTO, AdGuard
Andrey is also exploring Paddle's latest Billing features to support their continued growth outside of Europe and the US. With Paddle now offering Alipay subscription support, this addresses AdGuard's ongoing need to continually support their Chinese users.
We're very happy with Paddle right now."
Andrey Meshkov, Co-Founder and CTO, AdGuard
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