Resolving Twitter’s Premium Subscription Issues in Nigeria using $USDC on Solana Pay

A product case study on how Twitter’s integration with $USDC on Solana Pay solves the premium subscription issues for users in Nigeria, with a promise to increase Twitter’s revenue.

Ini Abasi Ekanem

8 min readFeb 28, 2024

This product case study is in five parts,

First, I’ll show you Twitter’s growth in Nigeria.
Second, the challenges with Twitter’s premium subscription for users in Nigeria and the need for a crypto payment option.
Then, an argument that outlines how integrating $USDC on Solana Pay for Twitter’s premium subscription can end these challenges.
And, the potential to increase Twitter’s revenue with this integration.
Finally, the key takeaway and tradeoffs to this integration.

Introduction

Nigeria is the Giant of Africa in all industries, markets, and social media like Twitter (now X). However, the local payment challenges in Nigeria have slowed down premium subscriptions for Twitter users in Nigeria.

According to Statista, there are about 619 million global Twitter users as of January 2024, with an approximated 4.95 million users in Nigeria.

Following the cancellation of the 7-month ban on Twitter by the Nigerian government in 2022, Twitter users in Nigeria grew by over 1,400% from 325,400 users in mid-2021.

This number will surge as the internet penetration rate grows above 55.4% and more creators rush to Twitter to earn via the Ad revenue payout for premium subscribers.

This rush to Twitter comes with some challenges

Everyone wants a share of the earnings but the premium subscription process has serious challenges for users in Nigeria. These challenges are not caused by Twitter but by the local payment system.

The payment limit for Nigerians using local bank cards is $20 per month, which restricts their capacity to subscribe to Twitter’s premium service along with other monthly subscriptions.
Banks are not slowing down on transaction fees involving bank cards.
Virtual card companies also charge a fee for transactions declined due to insufficient funds.
It isn’t easy to open and maintain a dollar account with Nigerian banks.
Virtual card companies like Flutterwave, Busha, Payday, Eversend, and others shut down their services to Nigerian customers, limiting online payment options.
The high inflation rate and bizarre exchange rate cripple payments as forex is scarce.

These payment hurdles have made Nigerians resort to cryptocurrency payment as a better option than bank and virtual cards.

Nigerians love Crypto

In 2023, Chainalysis reported that Nigeria received $60 billion in cryptocurrency. This proves a high adoption rate of crypto by Nigerians.

To make this even better, the central bank of Nigeria called off its 2-year ban on cryptocurrency, allowing Nigerians to own and trade crypto.

Following this, Cryptocurrencies are now legal in Nigeria, and their adoption rate is surging. This is the best time to integrate crypto payment for Twitter users in Nigeria.

The Twitter integration of $USDC on Solana Pay

Can the $USDC payment on Solana Pay ease premium subscription on Twitter?

Yes.

First, let’s understand what Solana Pay and $USDC are.

Solana Pay is a fast, easy-to-use, secure payment solution built on the Solana blockchain. Its instant transactions are free of fees and available to businesses globally.

Developed by Circle, $USDC is a stablecoin (digital dollar) backed 100% by highly liquid cash and cash-equivalent assets and is always redeemable 1:1 for US dollars (1 USDC = $1) It is a type of crypto like Bitcoin and is the default crypto used by Solana Pay.

There are five key features that Twitter needs to integrate crypto payment ($USDC payment on Solana Pay) for premium subscribers in Nigeria.

Accept Stablecoin Deposits

Create a Solana wallet to handle stablecoin deposits, specifically focusing on receiving $USDC from premium subscribers.
Develop a protocol that generates a payment URL in the form of a QR code.
Develop a protocol that confirms transactions on-chain and proceeds to activate a user’s subscription after a successful transaction.

Redesign the User Interface

Redesign the payment interface to accommodate stablecoin deposits, ensuring a user-friendly experience.
Feature $USDC as a payment option under “Pay with Crypto,” providing users with a straightforward and intuitive selection process.
Optimize the checkout process for premium subscriptions, maintaining simplicity and ease of use.

Enforce Regulatory Compliance

Conduct a thorough analysis of cryptocurrency regulations in Nigeria to ensure full compliance.
Develop and enforce robust Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedures.
Establish a system for regular audits to ensure ongoing adherence to evolving regulatory requirements.

Create Customer Support

Create dedicated customer support channels to assist users with inquiries, issues, and guidance related to $USDC payments.
Develop an extensive knowledge base, FAQs, and user guides to address common questions proactively.

Monitor and Optimize

Implement monitoring tools to track the performance of stablecoin deposits and overall system reliability.
Establish mechanisms for collecting user feedback on the new features, enabling continuous improvement.
Use gathered data and feedback to iteratively optimize the integration, addressing any technical, usability, or support-related issues.

Product Mock-up

Technical side

As seen in the image below, the merchant (Twitter) creates a payment link (URL) or a QR code for a customer (Premium subscriber) to scan.

The customer scans the QR code and makes a payment.

Once the payment is complete, the transaction is confirmed on the Solana blockchain and the premium subscription/ renewal is successful.

User side

All Twitter users do a proper Know-Your-Customer before using the app.

Users navigate to the premium subscription page. The “Pay with crypto” option would allow premium subscribers in Nigeria to generate a URL embedded in a QR code for payment.

3. The default payment crypto is $USDC and a real-time exchange rate (from a reliable price feed) is available for users. This converts the cost of subscription from NGN (the Nigerian local currency) to USD.

4. Once the user’s payment is successful, the transaction is confirmed on the Solana blockchain and the premium subscription/ renewal is successful.

This simple integration of $USDC payment on Solana Pay is valuable for customers and also highly profitable for Twitter.

Seizing the opportunity for more profit

TL;DR — I estimate that Twitter can generate an additional ~$110 million annually from 2 million new premium subscribers in Nigeria through the $USDC on Solana Pay integration.

These assumptions come from the data below:

1.Since the rush by creators to Twitter to earn via the Ad revenue payout for premium subscribers, Twitter users increased but fell consistently as the challenges with the local payment system hindered premium subscriptions.

2. As seen in the chart above, users who faced challenges with premium subscriptions moved back to Facebook, meaning they resorted to a seamless social media app.

3. With $USDC Solana Pay integration by Twitter, these unhappy users will return to Twitter.

Based on this, I estimate that Twitter can generate an additional $5,544,000 annually from every 100,000 new premium subscribers in Nigeria and ~$110 million from 2 million new premium subscribers.

Integrating crypto payment on Twitter is already on Twitter’s roadmap. CEO of Twitter, Elon Musk said in a text message before buying Twitter for $43 billion back in April 2022,

I think a new social media company is needed that is based on a blockchain and includes payments.

This indicates an interest in crypto-enabled payments and $USDC on Solana Pay is the best option.

Twitter has secured money transmitter licenses across several US states, including Arizona, Maryland, Georgia, and New Hampshire. This expertise positions Twitter to potentially acquire a license to legally process cryptocurrency payments in Nigeria, a country where crypto transactions are legal.

Risks and Mitigation

Security Concerns and Wallet Management

Risk: Managing cryptocurrency wallets introduces an additional layer of complexity and security considerations. Any vulnerabilities in the system could lead to potential security breaches, risking user funds and trust.
Mitigation: Implementing robust security measures, including encryption protocols, two-factor authentication, and regular security audits, is crucial. Collaborating with reputable blockchain security experts like Chainalysis can further enhance the integrity and safety of the integrated payment system.

Regulatory Compliance Challenges

Risk: Even though crypto is legal in Nigeria, these regulations are dynamic and subject to change. Adapting to evolving regulatory requirements may challenge Twitter in ensuring continuous compliance.
Mitigation: Conducting regular audits and staying abreast of regulatory updates can help Twitter maintain compliance. Establishing strong partnerships with local regulatory bodies like the Nigerian Communications Commission and legal experts can provide valuable insights and guidance.

Key Takeaways and Tradeoffs

Key Takeaways

Market Potential: Twitter has significant growth potential in Nigeria, evidenced by the rapid increase in users following the lifting of the government ban in 2022.
Payment Challenges: Nigerian users face substantial challenges with the premium subscription process, primarily due to limitations in the local payment system.
Cryptocurrency Adoption: The adoption of cryptocurrencies is high in Nigeria, and the regulatory environment has become more favorable following the lifting of the cryptocurrency ban.
Opportunity for Integration: Integrating $USDC on Solana Pay can address payment challenges, improve user experience, and tap into the growing crypto adoption in Nigeria.
CEO’s Interest: Elon Musk’s expressed interest in blockchain-based payments and the acquisition of Twitter for $43 billion in April 2022 aligns with the direction of integrating crypto-enabled payments into social media.
Revenue Potential: The integration could generate an additional ~$110 million annually from 2 million new premium subscribers in Nigeria, considering the return of users who moved away due to payment challenges.

Tradeoffs

Regulatory Compliance: Ensuring compliance with evolving cryptocurrency regulations can be challenging and may require ongoing efforts and resources.
Security Concerns: Managing cryptocurrency transactions requires heightened security measures to protect user funds, adding complexity to the overall system.
Operational Changes: Integrating $USDC on Solana Pay would necessitate significant changes to Twitter’s existing payment infrastructure, requiring thorough testing and potential disruptions during implementation.
Dependency on External Platforms: Relying on external platforms such as Solana Pay and Circle for stablecoin transactions introduces dependencies and potential vulnerabilities linked to the performance and security of these third-party services.

Conclusion

Since the Internet penetration rate in Nigeria is increasing above 55.4% and the rate of crypto adoption in Nigeria is high, a $USDC payment solution on Solana Pay would unlock a new use case.

By integrating $USDC payment with Solana Pay, Twitter users in Nigeria can pay their subscription fees with crypto to become a premium user. This integration could potentially increase Twitter’s income by ~$110 million.

The product mock-up serves as a real-world implementation guide for Twitter or any social app or company to follow.

Start your Solana Pay integration here.