Gumroad removed or limited the payments and payouts it supports through PayPal in various countries in Q4 2024. Concerned Gumroad users on Reddit claim that the restrictions and removal have caused them lost earnings, delayed and prevented payouts, and even damaged customer relationships.
On top of this, Gumroad has announced a further price hike, applicable from January, 2025. Creators and entrepreneurs using Gumroad will incur a 30% flat fee for marketplace sales, and a 10% + 50 cents (USD) charge for transactions outside its marketplace. Platform users must consider whether its pricing and payment method limitations will impact their profitability.
In this article, we’ll unpack the reported complications caused by removing or limiting PayPal as a payment processing and payout method. We’ll outline factors that creators, coaches, and entrepreneurs should consider when choosing a platform. We’ll also help merchants make an informed purchase decision by comparing the pricing structure and payment methods supported by Gumroad, ThriveCart, Podia, and Kajabi.
Reported struggles of a platform without PayPal
Gumroad’s suspension or limitation of PayPal in various countries has reportedly caused significant disruption for US and international creators and entrepreneurs and their customers:
Payout processing
- Without support for PayPal, many creators claim they have been suddenly unable to process payouts of their sales revenue.
- Gumroad merchants who received payments to their PayPal account with a bank account in the US and other countries that Stripe supports can switch their payment method, subject to ID validation (note: Stripe also limited some Gumroad use cases in 2024 (TechCrunch).
- Gumroad has allegedly been unable to provide a method to transfer funds to some creators and entrepreneurs who are resident outside of the countries that Stripe doesn’t support, effectively blocking their revenue stream with no advanced warning.
Customer trust, satisfaction, and conversions
- Many customers identify PayPal as a fast, reliable, and secure way to pay. This established trust increases their likelihood of making a purchase.
- A lack of payment method optionality drives cart abandonment. Using a platform like ThriveCart that supports PayPal and other flexible payment options such as Buy Now Pay Later (BNPL) and payment in installments makes the customer journey friction-free, boosting their checkout experience and your conversion rates.
Operational friction
- Finding and setting up alternative payment methods can be time-consuming and complex.
- Gumroad users have reported costly delays resulting from technical difficulties in the ID verification process. The platform requires ID verification to modify payment processor and payout options, and to process further sales.
- Requesting and obtaining consent to change subscribers’ registered payment method can cause delays and frustration. This may impact revenue, customer relationships, even customers’ lifetime value.
Limited coverage and scalability
- PayPal’s geographical coverage is unrivalled. PayPal supports 200+ countries and regions and 25 currencies, and previously powered sales and payouts for 99.9% of Gumroad’s 17,000 live stores (Storeleads).
- If a platform is unable to support PayPal, its merchants may be unable to process payments from some prospective and existing overseas customers, limiting their scope and scalability.
ThriveCart’s takeaways:
- Merchants should verify that the platform they use supports secure payouts in their region
- Gumroad merchants affected by the changes should evaluate the financial, operational, and reputational impact of continuing to operate with Gumroad, or switching to another solution (like ThriveCart).
Comparing supported payment method integrations
Gumroad
Gumroad currently does not support PayPal for processing and payouts in every country where its merchants and their customers are based. Gumroad uses Stripe for payment transactions and payouts into sellers’ bank accounts in some countries. Payoneer, checks, money orders, and transfers aren’t supported.
ThriveCart
ThriveCart integrates quickly and easily with PayPal and Stripe and supports payments via Apple Pay and Google Pay. ThriveCart boosts conversions at checkout by giving your domestic and international customers the flexibility to pay the way they want to—and for our creators to process payouts promptly!
Enhanced payment optionality means ThriveCart users in several countries can also use PayPal for credit card processing, as well as to pay flexibly with Klarna, Afterpay, and Affirm. This has helped ThriveCart scale to approximately $2 billion in annual payments across its 55,000 user base.
Podia
Podia’s Mover plan doesn’t support PayPal. Payments and payouts are processed through Stripe. This means that payouts can only be processed and paid out to merchants in some countries. However, Podia’s Shaker plan does integrate with PayPal, as well as Stripe.
Podia is unable to process payments through SEPA debit, Bancontact, Afterpay, Klarna, Razorpay, or Payoneer.
Kajabi
Kajabi supports PayPal, Stripe, all major credit and debit cards, Apple Pay, Google Pay, and payment in installments through Afterpay and Klarna.
ThriveCart’s takeaways
If you’re still reading this, you’ll understand the significance of supporting payments and payouts with PayPal for course creators, coaches, and entrepreneurs.
- Gumroad offers limited or no support for PayPal in various countries
- Podia’s Shaker plan does support PayPal
- ThriveCart and Kajabi both support PayPal and offer the most payment optionality and flexibility
Comparing pricing structures
Users may be charged fees by a payment processor as standard. Any fees outlined below are charged by the platform, i.e. Gumroad, Thrivecart, Podia, or Kajabi.
Gumroad
In exchange for no initial setup costs or monthly fees, Gumroad charges a 10% fee for every transaction processed by its customers. Gumroad merchants may also be subject to additional platform fees for currency conversion and revenue deposits, or ‘payouts’.
ThriveCart
ThriveCart offers a lifetime deal, subject to an upfront, affordable, one-off product fee. Unlike Gumroad, Podia, and Kajabi, ThriveCart never charges its lifetime license holders monthly, yearly, or percentage-based fees.
Podia
Podia’s Mover plan costs $39 per month, or $33 per month if paid annually, and a 5% transaction fee is applied to all sales.
Podia’s Shaker plan (with affiliate marketing) costs $89 per month, or $75 per month if paid annually, but no transaction fees apply.
Kajabi
Industry giant Kajabi offers a selection of plans that usually range between $69 and $399 per month, or between $55 and $319 per month if paid annually. No transaction fees or set-up fees apply.
However, each plan restricts the number of products, customers, and contacts that an entrepreneur can sell and receive payment for on the platform.
Thrivecart’s takeaways
Of the four platforms we’ve compared, it’s cheapest to get started on Gumroad. However, sellers sacrifice a sizable chunk of their revenue from each sale, meaning it may not be a scalable or lucrative mid- to long-term investment for many entrepreneurs.
By contrast, ThriveCart is the only platform that charges a one-off, lifetime license fee. While this requires an upfront investment, you’ll never be charged anything else by Thrivecart, so you will quickly recoup this sum. It has the most powerful features and will support a business with funnels, checkout, affiliate management, course creation, and student management via its Learning Management System (LMS). It also boasts 40+ integrations, so will work with almost any sales-focused tech stack.
Kajabi’s high monthly fees reflect the platform’s additional capabilities. This means that many creators are paying a premium for features they don’t need or aren’t using.
Kajabi’s most affordable plan incurs higher monthly fees than Podia charges for its basic Mover plan. However, Mover’s restriction of affiliate marketing and its 5% transaction fee can limit its profitability. Merchants should consider whether upgrading to Podia’s Shaker plan or choosing another platform would generate a better return on their investment.
It’s vital to consider the mid to long-term return on your investment and a solution’s scalability, as well as your start-out costs. Protect your profit margins with transparent and predictable pricing, and avoid paying extra for what you won’t use!
Our recommendation: ThriveCart!
– ThriveCart supports Stripe and PayPal payments and payouts, processing approximately $2 billion a year for its 55,000+ customers. These strong partnerships enable merchants to seamlessly integrate and minimize any disruption to their existing customer base and revenue streams.
– Over 50,000 creators, coaches, and entrepreneurs have generated over $5 billion in lifetime sales with ThriveCart, powered by the platform’s robust, user-friendly checkout experience.
– ThriveCart’s straightforward (no-code) and highly-secure (PSD2-compliant) solution ensures strict data protection and uninterrupted business operations.
– ThriveCart’s transparent pricing model allows you to budget for your success, not be penalized for it with percentage-based fees!
– Advanced sales tools such as upsell features, affiliate management, and detailed analytics empower you to maximize your revenue.
– Innovative subscription management tools, coupled with sophisticated Learning Management System (LMS) help you reduce churn and maximize customer lifetime value (and with our CSV uploader, you can import your students from anywhere for free!)
Ready to switch and save? Power your creative journey with the payment solution you can rely on. Spend less on securing your financial future—get your lifetime ThriveCart license today!
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