Paddle Billing
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Established in Turkey in 2022, HubX is a fast-growing company focused on building mobile apps designed to solve the average consumer’s everyday problems.
For example, its Nova app turns any phone into an AI-powered assistant, DaVinci transforms words and images into stunning artwork, PhotoApp is the fastest and most powerful photo enhancer app, and PlantApp can identify over 100,000 plants with over 80% accuracy.
HubX’s track record is impressive: In just two years, its apps have amassed over 100 million customers in more than 160 countries. And this is just the start. By the end of 2024, the company wants to double this reach and surpass 200 million users.
The challenge
To achieve this ambitious growth, HubX wanted to maximize its audience and app revenue by scaling to more users globally. This meant selling not just via traditional app stores, but on the web too.
Complexities of selling on the web
In early 2024, it launched its web monetization strategy. However, this brought with it a number of unanticipated complexities.
Selling mobile apps was relatively easier compared to the web ecosystem. The Apple App Store and Google Play handled a lot of the payments side of things for us. They looked after chargebacks and refunds, for example. But the dynamics of selling on the web are very different.”
Kaan Ortabas, co-founder, HubX
Payment processor limitations
HubX was using Stripe as its payment processor for its web app sales, but this wasn’t meeting its needs.
We were having to manage a growing number of chargebacks and disputes ourselves. We were also witnessing an increase in customer support demands related to refunds and payments. While we were able to scale our customer support team, we didn’t have the necessary specialist knowledge that was required. It was a drain on our time and resources and was becoming a real headache.”
Kaan Ortabas, co-founder, HubX
At the same time, HubX was trying to scale into new markets and this required a localized checkout experience.
“We recognized that we needed to optimize our payment funnels. We’d discovered that our inability to offer payment localization or alternative payment methods was negatively impacting conversions. But Stripe couldn’t support the adoption of these features.”
Keeping on top of sales tax
These weren’t the only challenges. Selling apps globally, outside the app stores, comes with a need to collect sales tax and VAT on every transaction – and requirements differ quite substantially depending on a customer’s country. HubX couldn’t manage this by itself.
When we were just selling mobile apps, things were simpler as the sales tax liability was offloaded to the app stores.
Taking this on ourselves would require an upfront cost, ongoing maintenance, registration, remittance, filing, and advisory fees, along with the risk of penalties and fines depending on the jurisdiction.
This was a massive distraction for us. We wanted to be able to focus on our core business of building products and maximizing customer satisfaction.”
Kaan Ortabas, co-founder, HubX
Kaan and the team quickly realized they needed a solution that could handle the complexities of web-based payments globally, in the same way that Apple and Google managed these processes for mobile apps.
The solution
In early 2024, HubX began the search for a partner that could help. After reviewing 15 different payments solutions, it finally landed on Paddle.
Because Paddle is a Merchant of Record, we could offload our sales tax burden to it entirely.”
Kaan Ortabas, co-founder, HubX
As a Merchant of Record (MoR), Paddle is the legal entity responsible for selling goods or services to the end customer.
Paddle acts as the middleman between HubX and its customers and takes on all the risks and responsibilities associated with taking payments, honoring refunds and chargebacks, fraud protection, and sales tax.
We were also impressed by Paddle’s ability to easily add new payment methods and offer over 30 currencies in a single click. Its pre-chargeback alert and fraud systems were also compelling. We liked the fact that Paddle would take on our chargeback risk.”
Kaan Ortabas, co-founder, HubX
HubX was already convinced, but after speaking with the Paddle team, the decision was clear.
Everyone we spoke to at Paddle was quick to respond, positive and proactive. That’s a big selling point for us because, in our domain, time is everything. Our operational stress was reduced right away."
Kaan Ortabas, co-founder, HubX
Implementation took less than two weeks, with the Paddle team traveling to Turkey to ensure everything was done quickly and correctly.
“It was a painless process,” Kaan says. “We were able to customize the solution to meet our needs – and that’s something you can’t necessarily do with other vendors.”
The results
Over $100,000 recovered in 72 days
Involuntary churn (due to billing errors, payment failures, and insufficient funds) can account for a significant portion of customer churn.
Paddle Retain works to automatically recover these by reattempting the payments or prompting customers to update their details.
By leveraging Paddle Retain for web purchases, HubX didn’t just reduce churn, it turned lost revenue into a $106,000 recovery in past-due payments over 72 days.
This equates to $1,480 a day in delinquent churn prevention.
The default churn prevention features in Paddle Retain have been really important for us. It’s a great way to use all the data Paddle has collected on recovering payments. We are seeing really good results without having to spend money building and customizing our own solution.”
Kaan Ortabas, co-founder, HubX
91% payment acceptance worldwide
HubX has also increased its payment acceptance globally to over 90% with Paddle’s payments infrastructure supporting web sales.
This is achieved through a combination of offering multiple payment methods and local currencies on the checkout and Paddle’s smart payment routing that helps to process payments in different regions.
With the improved acceptance rates globally, HubX is now expanding the countries and markets it sells into.
Now we are seeing results, we have the confidence to launch and learn in new markets.
If we knew we would only have 50% payment acceptance in one country and we didn’t offer local payment methods then it wasn’t worth it before.
The Paddle infrastructure makes it really easy for us to do that without having to invest significant time or resources.”
Kaan Ortabas, co-founder, HubX
$110,000 MRR of churn prevented in 3 months
HubX has also prevented $110,000 of churn by implementing Cancellation Flows in Paddle.
The Cancellation Flows feature serves up a form when a user tries to cancel, asks why they're canceling, and then presents curated salvage offers. These could be pausing or switching a subscription, or offering a discount.
Since activating Cancellation Flows with one of its apps, HubX has deflected 23% of attempted cancellations over 3 months. The users who did not cancel over this time amounted to $110,000 of MRR that would otherwise have churned instantly. Over a year, this will prevent even more churn.
Of those who decided not to cancel:
- 16% chose to pause their subscription instead
- 1% switched to a different plan
- 20% opted to speak to support
- and 63% took a salvage discount
10,000+ billing support tickets offloaded per month
Paddle’s billing support engine is now handling all refund requests for HubX’s web sales over 10,000 billing tickets per month across its customer base.
Reduced chargeback risk
HubX no longer has to manage chargebacks as Paddle’s fraud detection and prevention tools help to identify high-risk transactions and take action to mitigate the risk of chargebacks.
Global sales tax compliance
Now that Paddle has taken on HubX’s sales tax liability for all web sales, the company is compliant in over 100 jurisdictions.
Paddle collects, files, and remits sales tax for every purchase, so HubX doesn’t have to worry about financial penalties or employ tax advisors.
“Having Paddle manage the complexities of payments has given us the space and time we needed to be able to focus on growing our business and exploring new opportunities.”
Future plans
Looking ahead, HubX plans to continue its aggressive growth strategy and is on track to surpass its goal of reaching 200 million users by the end of 2024.
The company is also working hand in hand with the Paddle team to explore further opportunities to test and improve their go-to-market strategies.
It’s this ongoing partnership that Kaan believes will set HuBX up for its next stage of growth.
We have weekly standups with Paddle which are not only used for problem-solving but to exchange ideas, too.
These meetings are invaluable to us. Paddle works with many different clients in a range of different categories, so they have a real 360-degree view of the advice they can deliver. Being able to draw on that knowledge is something that will help us to expand in the future.”
Kaan Ortabas, co-founder, HubX
Want to see how Paddle can help you sell your mobile app on the web with ease? Speak to our team to Get Started.
