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The Hidden Truth About Discord Payment Processors: Why In-House Solutions Matter

In the diverse environments of Discord communities, convenience and efficiency are key to user experience. Many businesses have taken to Discord to cater to the payment processing needs of communities that offer various exclusive products, offering what they claim to be seamless solutions. What isn’t talked about enough is the hidden truth that many users of these communities aren’t aware of: these so-called payment processors aren’t processing the user’s payments. Instead, these businesses merely wrap existing gateways to companies such as Stripe, PayPal, and other large payment processors and generate a unified dashboard that comes across as unique and built in-house - which it isn’t. Users shouldn’t use them for a multitude of reasons, and discord communities need to seek businesses that have truly in-house payment processors.

The Wrapper Illusion

Taking a look at companies like Launchpass and Whop, some of the largest, most well-known payment processors that exist on discord, they come across as easy-to-use, seamless, and comprehensive payment processing solutions for their clients. However, taking a closer look at these companies reveals that these services aren’t as independent and seamless as they claim. Rather than handling the payment process themselves, they rely on third party gateways to large payment processors, and bundle these gateways into their dashboards and market it as a “unique” product, which is false.

Whop, a popular discord payment processor revolving around cryptocurrency, has built a considerable reputation on its system capabilities, but in reality simply outsources its transactions to Coinbase Commerce. While the customer believes they are paying through the Whop system, in reality they are paying through Coinbase, a large company that also happens to handle payments. The same goes for a vast majority of other businesses that operate in this space, utilizing large corporate payment sponsors such as Stripe and PayPal.

The Third-Party Gateway Problem

When these businesses use third party gateways, the users are presented with several issues.

Lack of Transparency

These companies frequently advertise zero percent fees through their services, however, what they don’t tell you is that each gateway they use has its own set of fees associated with the payment, and in turn, you’ll end up paying significantly more for your transaction.

Data and Privacy Concerns

When payment processor companies use multiple third-party services to process payments, the user’s financial information is shared across several platforms, with the user being oblivious to this occurring. This increases the risk of data breaches and misuse of personal information.

Dependence on External Services

Relying heavily on third-party gateways means that these payment processors are at the mercy of external services, meaning issues with downtime affiliated with these gateways directly affect the payment processing capabilities of the company using them, causing potentially catastrophic problems for the customers.

The Case for In-House Payment Processing

The solution to the issues these companies face is a service that uses in-house payment processing. Here’s why.

Transparency and Trust

When a company develops its own payment processing system, it has full control over the fees and can be transparent about them, allowing the users to know exactly what they are paying for, and more importantly, where their money is going.

Enhanced Data Security

In-house systems allow companies to manage and protect user data more effectively. There is no need to share sensitive information with multiple external services, mitigating the risk of data breaches.

Better User Experience

Companies with in-house payment systems can tailor their solutions to better fit the needs of their users, providing a smoother and more streamlined experience.

Conclusion

As the discord community and ecosystem continues to expand, the demand for reliable and transparent payment processing solutions will only increase. It’s time for companies to move away from the deceptive practice of wrapping third-party gateways and invest in developing their own in-house processing systems. Not only will this build trust with users, but it will also ensure significantly better data security and a better overall user experience. The discord community deserves better than this, and until in-house solutions are implemented more widely across the platform, this will continue to be an overbearing issue.