The Ghanaian Market and Recurring Payments
2025 April 14th
See all posts
From the very first day of working on NextGenHub, I had it deep in the
back of my mind that the only sustainable business model would be the
recurring subscription model.Why? You see, The line of business we operate
in requires that we find a way to make our services and product as
seamless and sticky as possible for customers. And we need to also find
ways to make sure our revenue projections could be monitored efficiently.
Pay as you go is too casual. It is not sticky. Customers don’t think twice
before they decide to cancel.
More explanation; Take a product like Netflix. Netflix, just like
NextGenHub, is a supplementary service. It is not a basic need. Netflix's
business model could have been a pay-per-movie-view. But they didn’t do
that. They chose a subscription model. A considerable number of users that
have subscribed to netflix barely open the app for more than twice in the
month, but still keep their subscription. Because People want it to be
available whenever they feel like watching a show. At this point, it moves
from mere supplementary service to a lifestyle. That is what I envision
NextGenHub to be. Tutoring should be a lifestyle. And lifestyle is
seamless. You expect your toothbrush to be at the same place every morning
when you wake up. That is what I want 1:1 tutoring to be. Seamless and
lifestyle. The world’s best athletes still have coaches. The most
important time to have a private tutor is when you are even performing
very well and not otherwise. Well, that is another topic for another day.
But you get the point.
This and other reasons that I can’t put into words yet made it pretty
clear to me that for NextGenHub to be scalable, we needed to incorporate
the subscription model, as proved from the big guys at goStudent.org.
Axiomatically, Subscription models work best with debit cards. I discussed
this with my cofounder and she went in all directions explaining to me why
Ghanaian parents would just not put their debit card anywhere. I refused
to believe this. Dear old stubborn me! Because, in my mind, recurring
payment not only is convenient for us, but also convenient for the parent.
It saves them a lot of time and stress. I mean, who wants to have to sit
down one evening, open their invoice, copy the bank details, open their
bank app, type the right amount and double check every time to make sure
they didn’t make a mistake with the copy or they got the amount right. I
mean, what could be so strong a disgust to get people to willingly subject
themselves to this stress when there is an obvious better way. I decided
to test it out myself.
A week or two later, I set up a paystack subscription plan for the
company. Added all our plans and created subscription pages for them. With
just a link ( courtesy of paystack), our customers could pay with their
debit card and paystack takes care of the recurring monthly payment for
us. Ez-Peezy. For the next set of clients that we would be onboarding, I
made it a must to text and meet them personally and convince them of the
benefits of card subscriptions over the manual approach. I had chatGPT put
together a great pitch with solid points that just made sense. I even went
on to apply a discount if they opted in for the recurring card payment.
And guess what?
IT DIDN’T WORK. No matter what I said, the parents didn’t want to use
their debit / credit cards anywhere online. Citing reasons of not feeling
totally secured in Ghanaian payment rails and how they refrain from online
payments entirely. It was heart-breaking. I couldn't influence their
belief. It was either bank transfers, cash, MoMo or nothing for them. They
wouldn’t touch it even when they understood how convenient it could be for
them.
Ofcouse, I didn’t stop there. I went on to ask them if they have a netflix
subscription or any app in the usa that they have subscribed to. And
Majority of them responded with a big “YES”. So I asked again, why would
you feel safe using your card for online purchases only when it is a USA
company and not a ghanaian. That, right there, I realised quickly, was a
question for the gods.
A compromise.
I still don't get it up till time of writing. Ghanaians themselves don’t
believe in the system. This is costing businesses a lot. If you are
looking for reasons why it is 10x harder to start a business in Africa, as
compared to SF, this would be one of them. I had to accept and compromise.
The last days of any Month keep being the most haunting times of my job. I
have to sit down to make sure invoices are prepared for every single one
of our Ghanaian clients and spend the following week following up and
reminding some of them over and over to make payment. Initially, it was
worse as they paid at the end of the month. But after facing enough, We
made it mandatory to pay before the month begins. The cost of doing
business in Ghana. The payment rails thankfully now exist. It is now up to
the citizens to trust them.
I have been looking closely at South Africa and other African countries
with high card payment culture as we begin to explore expansion
possibilities. Will keep you posted!
Life is good
With respect, Easy!
E.B
The Ghanaian Market and Recurring Payments
2025 April 14th See all postsFrom the very first day of working on NextGenHub, I had it deep in the back of my mind that the only sustainable business model would be the recurring subscription model.Why? You see, The line of business we operate in requires that we find a way to make our services and product as seamless and sticky as possible for customers. And we need to also find ways to make sure our revenue projections could be monitored efficiently. Pay as you go is too casual. It is not sticky. Customers don’t think twice before they decide to cancel.
More explanation; Take a product like Netflix. Netflix, just like NextGenHub, is a supplementary service. It is not a basic need. Netflix's business model could have been a pay-per-movie-view. But they didn’t do that. They chose a subscription model. A considerable number of users that have subscribed to netflix barely open the app for more than twice in the month, but still keep their subscription. Because People want it to be available whenever they feel like watching a show. At this point, it moves from mere supplementary service to a lifestyle. That is what I envision NextGenHub to be. Tutoring should be a lifestyle. And lifestyle is seamless. You expect your toothbrush to be at the same place every morning when you wake up. That is what I want 1:1 tutoring to be. Seamless and lifestyle. The world’s best athletes still have coaches. The most important time to have a private tutor is when you are even performing very well and not otherwise. Well, that is another topic for another day. But you get the point.
This and other reasons that I can’t put into words yet made it pretty clear to me that for NextGenHub to be scalable, we needed to incorporate the subscription model, as proved from the big guys at goStudent.org.
Axiomatically, Subscription models work best with debit cards. I discussed this with my cofounder and she went in all directions explaining to me why Ghanaian parents would just not put their debit card anywhere. I refused to believe this. Dear old stubborn me! Because, in my mind, recurring payment not only is convenient for us, but also convenient for the parent. It saves them a lot of time and stress. I mean, who wants to have to sit down one evening, open their invoice, copy the bank details, open their bank app, type the right amount and double check every time to make sure they didn’t make a mistake with the copy or they got the amount right. I mean, what could be so strong a disgust to get people to willingly subject themselves to this stress when there is an obvious better way. I decided to test it out myself.
A week or two later, I set up a paystack subscription plan for the company. Added all our plans and created subscription pages for them. With just a link ( courtesy of paystack), our customers could pay with their debit card and paystack takes care of the recurring monthly payment for us. Ez-Peezy. For the next set of clients that we would be onboarding, I made it a must to text and meet them personally and convince them of the benefits of card subscriptions over the manual approach. I had chatGPT put together a great pitch with solid points that just made sense. I even went on to apply a discount if they opted in for the recurring card payment. And guess what?
IT DIDN’T WORK. No matter what I said, the parents didn’t want to use their debit / credit cards anywhere online. Citing reasons of not feeling totally secured in Ghanaian payment rails and how they refrain from online payments entirely. It was heart-breaking. I couldn't influence their belief. It was either bank transfers, cash, MoMo or nothing for them. They wouldn’t touch it even when they understood how convenient it could be for them.
Ofcouse, I didn’t stop there. I went on to ask them if they have a netflix subscription or any app in the usa that they have subscribed to. And Majority of them responded with a big “YES”. So I asked again, why would you feel safe using your card for online purchases only when it is a USA company and not a ghanaian. That, right there, I realised quickly, was a question for the gods.
A compromise.
I still don't get it up till time of writing. Ghanaians themselves don’t believe in the system. This is costing businesses a lot. If you are looking for reasons why it is 10x harder to start a business in Africa, as compared to SF, this would be one of them. I had to accept and compromise. The last days of any Month keep being the most haunting times of my job. I have to sit down to make sure invoices are prepared for every single one of our Ghanaian clients and spend the following week following up and reminding some of them over and over to make payment. Initially, it was worse as they paid at the end of the month. But after facing enough, We made it mandatory to pay before the month begins. The cost of doing business in Ghana. The payment rails thankfully now exist. It is now up to the citizens to trust them.
I have been looking closely at South Africa and other African countries with high card payment culture as we begin to explore expansion possibilities. Will keep you posted!
Life is good
With respect, Easy!
E.B