Paddle Billing
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The company
Established ten years ago in Amsterdam, Studocu is an edtech platform that empowers students to excel at their studies by providing instant access to the very best study materials.
Users can access more than 55 million documents including lecture summaries, study guides, assignments, and more. We also offer AI features like note summarization, mock exams, lecture recordings, and flashcards.”
Tyler Kirkland, COO, Studocu
The company has worked hard to grow its presence worldwide, and those efforts have paid off: Roughy 50 million students now use Studocu every month, and the US is its largest market.
The challenge
As a European company expanding in the US, Studocu relied on a local payment service provider (PSP) to manage its cross-border payments. But processing US payments from Europe brought problems.
Banks and card issuers are more conservative when it comes to cross-border payments, which leads to a lot of false declines - these are students who want our services, but the bank just won’t allow them.
Tyler Kirkland, COO, Studocu
The team could have opened a local entity in the US, but in an effort to avoid costs and legal/operational risks, decided against this.
Instead Studocu sought a Merchant of Record (MoR) - a legal entity responsible for selling goods or services to an end customer, and a model that offloads all payment complexity and associated liability.
Why Paddle
Paddle stood out as a leading MoR with an innovative approach.
Some of the other MoRs we considered seemed less forward-looking and more old-fashioned, Paddle came across as innovative, especially in terms of its technology and integrations.”
Tyler Kirkland, COO, Studocu
That wasn’t the only advantage. In many countries, customers rely on local payment methods like Pix in Brazil. Until now, Paddle has primarily supported their US volume, but testing for other markets is set to begin soon.
Paddle’s advanced billing management and fraud capabilities also stood out.
We’ve experienced large card-testing attacks in the past, so security was important
Tyler Kirkland, COO, Studocu
The implementation
Studocu was impressed by Paddle’s approach to implementation right from the outset. Developer Documentation was clear and complete, while Paddle’s support team was highly responsive on Slack. This was very different to what the company had experienced in the past.
Our teams often complained about poor documentation and slow support with the old payments provider, with Paddle, everything was smooth. Even minor questions were answered very quickly. Overall, we felt very well supported.
Tyler Kirkland, COO, Studocu
To validate the impact of Paddle, Studocu started with a 50/50 A/B test, splitting US traffic between Paddle and its outgoing PSP.
The test covered the full trial period and looked at authorization rates across zero-value authorizations, first recurring payments, and subsequent renewals.
The results
The results were almost immediate.
Gross, we saw a 15% increase in new user revenue. Interestingly, Paddle’s checkout conversion was a bit lower than ours, because our checkout is optimized purely for speed and sometimes skips the data collection that Paddle requires. Yet, despite that, the overall revenue per user still increased.
Tyler Kirkland, COO, Studocu
Delighted with these results, Studocu has now begun processing all of its US payments through Paddle. While it’s early days, the company is looking forward to realizing the full benefits that come with tax compliance outsourcing, especially as it expands further into markets like Brazil.
The future
This is only the beginning. In the coming months, Studocu is keen to test Paddle Retain: Paddle’s solution to help automatically reduce churn and improve customer retention.
Something we’d been A/B testing before switching to Paddle was retries, with subscriptions, especially for students, a big pain point is failed payments when they don’t have funds in their account. So, recovering those – when it’s not cancelled, just insufficient funds – is important. We tested our retry system against our previous PSP and ours actually performed better. So, we’re curious to see how Paddle Retain performs.
Tyler Kirkland, COO, Studocu
As Studocu continues to grow its business, even more Paddle capabilities will open up.
While most users currently access the company’s services through its web portal, the company is adding more app-first features, including an AI-powered study platform and a ‘back-to-school’ offering.
This will open up new revenue streams, particularly in light of the recent Epic vs Apple ruling which will allow apps to link out to web checkouts and take payments outside of the App Store without extra fees.
An exciting future lies ahead for Studocu. With Paddle, it has not only simultaneously offloaded all of its payments and associated liabilities and increased revenue per user, but put itself in a strong position to build on its success with a new generation of AI-powered study tools.
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