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Should you Build or buy a payments solution?


Many high-tech companies face this question sooner or later: should I build or buy a payments solution? On the one hand, payments are not their core business. On the other hand, the company's revenues are at stake, so every small percentage of improvement could lead to a not-so-small amount of extra income, often critical to the company’s future.

At Wix, the main reasons we came up with our own solution were:

  1. Globalization (Payments) - we found that no other solution was effective enough for rapid global growth. We did not want to be dependent on another company’s roadmap.
  2. Dependency on one provider (Payments) - we wanted the flexibility and ability to send transactions to any provider we chose, then optimize, AB test between acquirers etc.
  3. Specific billing system logic (Billing) - we had our own demands (upgrades, downgrades, refunds logic) and most billing solutions force you to go by the logic they provide.

Later on, we realized we also gained an abundance of optimization capabilities, although we did not understand this at first. Many best practices on subscription optimizations, re-tries etc., all this logic could be written on our own, free from dependency on any one billing system logic.

So, when deciding whether to develop or buy;

- The first decision has to do with the billing system.

- The second one concerns the payments solution.

Billing System

Since at Wix we first bought two different billing and payment solutions, then decided to develop our own, I can share with you the significance of the development process; building a billing system (mostly for handling subscriptions) took us almost a year. Luckily, we already had a deep knowledge and understanding by that time of the billing system eco-system.

It meant we needed to write a flawless subscription manager, alerting system, coupon management, currency management and full product catalog.

It meant that the purchase logic needed to handle upgrades/downgrades, use-cases and edge cases for many different scenarios, refunds and more.

So, ask yourself: is your company ready to handle these complex issues in-house?

Payments Solution

I admit, this is a tricky one. On the one hand, when you connect to a provider, you can connect directly based on what we discussed in the “which provider is right for you” section.

So it seems that a third-party solution would be sufficient enough for most start-ups at first.

But on the other hand- if we dig deeper into a more advanced stage of payments, that’s where you realize that there’s much more to advanced payments then just integrations.

The “costs” of handling it on your own are explained in the next chapters (Globalization, Optimization, Operation) where I will go over these three main demands and elaborate on their meanings.

Your main challenge, as explained here, is the PCI certification. Generally, if you decide to handle the payments, and connect to several chosen providers, you would need to be PCI level 1 certified. This would allow you flexibility in all the optimization and operational processes. Becoming PCI level 1 certified is a long process, and costs money.

A few more interesting reads

COVID-19 Pushes #homecommerce to the Forefront

What fraud trends can we expect to see post-SCA?

Payments 101: Learn the Fundamentals

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