For TrueLayer's payment initiation service, should we prioritize adding support for more payment methods or focus on reducing transaction fees for existing methods?

Introduction

The trade-off we're considering for TrueLayer's payment initiation service is whether to prioritize adding support for more payment methods or focus on reducing transaction fees for existing methods. This decision is crucial for our product strategy and will impact our market position, user acquisition, and revenue streams. I'll analyze this trade-off by examining the product context, potential impacts, key metrics, and experimental approaches to inform our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Based on our current market position, I'm thinking we might be facing increased competition. Could you share insights on our market share and how it's trending compared to our main competitors?

Why it matters: Helps determine if we need to focus on differentiation or cost leadership. Expected answer: We're a strong player but facing pressure from new entrants. Impact on approach: Would influence whether we prioritize new methods or cost reduction.

• Considering our user base, I'm assuming we have a mix of individual and business customers. Can you provide a breakdown of our user segments and their respective transaction volumes?

Why it matters: Different user segments may have varying needs and price sensitivities. Expected answer: 60% individual users, 40% business users, with businesses generating 70% of transaction volume. Impact on approach: Would help tailor our strategy to the most valuable segments.

• From a technical standpoint, I'm curious about our current infrastructure. How scalable is our system for adding new payment methods versus optimizing existing ones?

Why it matters: Technical constraints could limit our options or increase costs. Expected answer: Our system is modular and can handle new methods, but optimization might require significant refactoring. Impact on approach: Would influence the feasibility and timeline of each option.

• Regarding our financial position, I'm wondering about our current profit margins on transactions. Can you share our average margin per transaction and how it compares to industry standards?

Why it matters: Helps assess the potential impact of fee reductions on our bottom line. Expected answer: Our margins are slightly below industry average, around 1.5% per transaction. Impact on approach: Would determine how aggressive we can be with fee reductions.

• Considering our product roadmap, I'm thinking this decision might impact other planned features. What are our key strategic initiatives for the next 6-12 months?

Why it matters: Ensures alignment with broader company goals and resource allocation. Expected answer: We're focusing on expanding our API offerings and improving user onboarding. Impact on approach: Would help prioritize this decision within our overall strategy.