Maximizing global Customer Lifetime Value (CLV) while minimizing costs

Considering Preply’s international reach and need to accommodate both tutors and learners, they set their sights on two goals: Optimizing payments performance on a global scale and building seamless local checkout experiences in each market. To reach these goals, they needed to find a way to integrate new payment processors easily as well as increase the number of local payment options, reduce payment-related costs, and increase checkout conversions.

“Having learners and tutors in nearly every country requires a notably robust payment strategy. We needed the capabilities to take full control of our PSP strategy, reduce costs, and ensure that our payments can be easily analyzed and managed across all markets,” said Paula Sanz, Senior Product Manager at Preply.

CLV is a vital metric for Preply, especially given their focus on subscription payments. Learners can choose personalized lesson packages with their preferred tutors, creating a unique learning journey that builds strong loyalty. However, managing churn and addressing failed payments are critical to maintaining this seamless experience.

Finally, due to the immense number of transactions they were processing around the globe, it was important for Preply to streamline their financial operations and make day-to-day payment processes as automated and smooth as possible. This meant finding a way to improve their PSP receivables reconciliation and to start monitoring the payment performance with deep insights across all their integrated PSPs in real-time.

Increasing success rates with a unified integration layer and tokenization 

Preply partnered with Payrails to address all of these challenges and transform their payments into a powerful driver for business growth. After understanding the root causes of their pain points, Payrails developed a tailored plan that included the implementation of a unified integration layer, dynamic payment routing, automatic retries, payment tokenization, automated reconciliation, and advanced analytics insights.

Implement unified integration layer to remove friction of adding new PSPs

Preply implemented Payrails’ unified integration layer in order to tackle their biggest challenge: simplifying their payments infrastructure and making the addition of new payment processors and payment methods easy and efficient. The unified integration layer reduces the complexity of payments by enabling Preply to quickly connect to global and local payment service providers instead of integrating each one separately. This approach saves both engineering time and effort, as well as reducing integration maintenance costs.

Turn on dynamic routing and smart retries to increase payment success rates

To reduce payment-related costs and enhance checkout conversions, Preply integrated Payrails’ dynamic payment routing feature. This feature intelligently directs transactions to the most optimal payment processor in real-time based on various factors predetermined by the merchant. Since Preply aimed to enhance payment performance, they configured the routing engine to direct payments in a way that achieved the highest authorization rates and cost efficiency.

Additionally, Preply activated Payrails’ smart retry feature to effectively tackle the challenge of subscription churn. This feature retries payments without requiring customer intervention, ensuring smooth business continuity and providing a frictionless customer experience while increasing the likelihood of successful transactions. As a result, this not only increases the likelihood of successful transactions but also reinforces the value of monthly subscriptions, helping to keep learners engaged and committed to their educational journeys.

Implement PSP-agnostic tokenization to increase subscription payment success

To make their recurring subscriptions as seamless as possible, Preply integrated the Payrails token vault. Using PSP-agnostic payment tokens eliminates the need for re-entering card information while keeping Preply users’ payment details safe and secure. Because the tokens are PSP-agnostic, Preply was also able to easily collaborate with new partners and processors.

Integrate unified analytics and automated reconciliation to create more value

To further streamline their payment operations, Preply began using Payrails’ unified analytics tool, which provides advanced real-time data insights into payment performance across all active PSPs. By bringing together scattered data, the unified analytics tool allows Preply to get a deep understanding of their payment performance, strengthening their ability to analyze, identify areas for improvement, and refine their payment strategy. 

Additionally, they implemented Payrails’ Reconciliation product. This automation consolidates and standardizes data from multiple sources, freeing up the IT and finance teams from tedious manual tasks. By simplifying the reconciliation process, Preply can quickly identify and resolve discrepancies, including consolidating and standardizing data, verifying transactions, settling bank reconciliation, and unblocking the manual workload. By automating the reconciliation process, Preply is able to free up resources, reduce the risk of human error, and expedite the auditing process.

“Our partnership with Payrails has yielded tangible results. They always provide ideas, expertise, and hands-on help we need to turn payments into a system that will continue to drive value. By working with them, we have re-imagined the way we manage payments. We continue to work together and expect more great things in the future,” added Pablo Tonnelier, Director of Product Management at Preply.

By tackling their challenges from multiple angles, Preply was able to make great strides in improving their overall payment performance.

30% payment cost reduction 

By routing transactions to the most cost-effective option, Preply significantly reduced payment-related costs across markets.

30% recovery of select failed payments

Through strategic experimentation with retrying various rejection reasons, Preply identified the most effective retry scenarios, achieving a 30% recovery rate while maintaining an optimal cost structure.

25% decrease in failure rate 

By selecting optimal integrations and implementing smart routing and smart retries, Preply successfully reduced payment failures.