We use cookies to better serve you
I AgreeMore InfoMore Info
1. Update to our Privacy Policy

Hi! We have updated our Privacy Policy to make sure you stay well informed about how we process personal data.

2. Cookie Policy

We place cookies in order to make sure our website works properly and to improve your browsing experience, to offer social media functionalities, to streamline and personalize our marketing content and to show you personalized advertisements (including on third party websites). We sometimes share cookie data with our partners for these purposes. Our cookies remember your settings and the data you fill out on forms on our website and analyze traffic to our website. Our cookies also register how you found us and collect information about your browsing habits. You can read more about our use of cookies and how we share data with our partners, and can change your settings on our Cookie Policy.

Should you Build or buy a payments solution?

14
Dec

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

International Payment Preferences part 1

International Payment Preferences part 2

Six Ways to Increase Your Approval Rate

Stay on top of your payments

Sign up for our newsletter to get the latest payment news

By clicking Subscribe you agree to ZOOZ’s Privacy Policy.