Challenge

Thinkific’s platform gives creator educators a place to turn their passions into profits. Currently, it has more than 50,000 active creators, who earn hundreds of millions of dollars in direct course sales while teaching tens of millions of students around the world.

Some creators struggled to get recurring sales and therefore create a sustainable business, while others struggled to manage core business requirements like accounting and taxes. Managing their own payments and back-office operations, such as tax compliance, hindered their growth and took valuable time away from doing what they do best: teaching students.

Thinkific was looking for more ways to support creator educators to drive more sales and scale their businesses. The platform also wanted to expand internationally to give its creators a chance to capture a larger audience in new markets.

Solution

Thinkific first partnered with Stripe in 2012 to build a platform that would give creator educators everything they need to grow faster, automate payments and back-office administration, and improve their students’ journey.

Thinkific chose to work with Stripe because of its speed of integration compared to other providers. “When you’re a high-growth company, there’s nothing more valuable than speed and the ability to move fast,” said Peter Fitzpatrick, vice president of commerce at Thinkific. “With Stripe, we’re able to integrate new features quickly and with relatively little effort. This has made it easier for us to create value and accelerate our return on investment.”

With Stripe APIs, Thinkific developers can integrate new features in just days or weeks, meaning Thinkific doesn’t need to divert engineering resources away from its core product for long periods of time.

Building end-to-end finance automation

Thinkific began working with Stripe by using Stripe Standard Connect to quickly enable its creators to accept payments. Stripe APIs enabled Thinkific to build and scale end-to-end payments experiences, from instant onboarding to global payouts. Shortly after launch, Thinkific added Stripe Billing, which enabled creators to sell their courses as recurring subscriptions, increasing the value of their businesses. Today, recurring subscriptions account for 32% of Thinkific Payments’ gross merchandise value (GMV).

Thinkific also uses the Stripe Billing suite to facilitate its direct SaaS fees. Having a single, unified payments and finance platform improves operational efficiency and speed, enabling Thinkific to execute faster when performing various tasks, such as financial forecasting, planning, and analysis.

Driving revenue with embedded payments

In 2021, to help creators increase sales, Thinkific launched Thinkific Payments, an embedded payments processing system integrated on its own platform – built entirely on Stripe’s infrastructure. Thinkific Payments uses both the Smart Retries and Adaptive Acceptance features.

"Thinkific Payments gives course creators tools that help them sell more and spend more time teaching and growing their business," said Greg Smith, co-founder and CEO of Thinkific. "Our purpose is to help course creators scale their impact on the world. Tools that help them grow are crucial to supporting their vision for delivering world-class educational experiences online."

By offering embedded payments, Thinkific was able to create a powerful new revenue stream for its business. It helped differentiate its platform, which has dramatically increased its customer lifetime value while keeping customer acquisition costs constant. Embedded payments have been an effective tool in helping the company become profitable.

"The rate of growth we've seen with Thinkific Payments has exceeded even our expectations, and this is quickly growing into a significant, profitable revenue stream,” said Smith.

Creating a secure and optimised checkout experience

In 2023, Thinkific launched Stripe’s optimised checkout suite to drive conversion, which includes the Payment Element, payment methods, and Link, a secure one-click checkout that autofills customers’ payment information. Within 24 hours of launching Link, it was used to make 10% of payments on Thinkific.

With the Payment Element, Thinkific was able to launch 10 payment methods with minimal effort such as Google Pay, Cash App Pay, and buy now, pay later (BNPL) payment methods popular with students and teachers, including Affirm, Afterpay, and Klarna. Not only has BNPL improved students’ experience by offering the flexibility to pay in instalments, but it’s also helped increase conversion rates and average order value for creators, who are paid in full upfront (minus any fees). In fact, Thinkific transactions made with BNPL have an average order value more than three times higher than transactions made with cards.

And when Thinkific Payments expanded into Europe, it was able to launch popular local bank redirects, including Bancontact, EPS, Giropay, iDEAL, and Przelewy24 in just a week to help drive conversion.

“With Stripe, we’re releasing local payment methods customised to each country to make payments faster and simpler for students,” said Fitzpatrick. “This has made it easier for us to avoid building new integrations and has created a better experience for teachers and students.”

Simplifying back-office operations with automated tax compliance

Thinkific eases back-end business complexity for creator educators. With Stripe Connect, it’s been able to simplify the onboarding process of new creators and teachers. “Stripe’s onboarding removes the need for us to build and maintain a new form for each country, while making sure we always collect the right information,” said Fitzpatrick. “It saves a ton of time.”

Another way Thinkific is making life easier for its users is by eliminating the burden of tax compliance with Stripe Tax.

“We kept hearing from our creators that they were really struggling with taxes. They’re selling digital goods all over the country and world. Keeping up with the different tax laws is nearly impossible, so most creators are out of compliance and at risk of penalties,” said Fitzpatrick. “With Stripe Tax, we’ll be able to offer a solution that automates tax calculation and collection on transactions for our creators, so they can spend less time on taxes and more time growing their business.”

Results

Thinkific Payments recently surpassed $100 million in payments volume processed to-date, with over $62 million in volume processed in the first two quarters alone (Q1 and Q2 of 2023), making it one of the fastest-growing embedded payments products on the internet.

Approximately 80% of new creators to Thinkific in the US, UK, and Canada start with Thinkific Payments and this percentage is expected to increase as Thinkific rolls out additional features and local payment methods in more countries. Globally, that number is approximately 60%.

“We move much more quickly with Stripe than we would with anyone else,” said Fitzpatrick. “Stripe allows us to turn on new markets instantly and move at the pace that meets our customers’ growing and changing needs. I'd estimate we move twice as fast as we would with any other platform.”