Buy or Build a Payment Orchestration Platform?

June 04, 2020 | Expertise

What you learn from building your own payment management platform

If you are reading this article, your company might be faced with the decision: to build or to buy a Payment Orchestration Platform. Now, you are wondering what I might say to convince you to buy a platform instead of developing one yourself. Don’t worry, this isn’t a sales pitch! In fact, I want to tell the story of when I was faced with this exact same question (not for the first time) and why I finally decided to develop.

In 2001 we, at IXOLIT, began developing and technically supporting eCommerce platforms for our customers. During this time, we worked on an increasing number of projects that required recurring payments, enabling us to expand our know-how and expertise in this area. As our customers became more and more renowned and international from year to year, we started to put all our technical knowledge into this business model. This resulted in a product that is known today as IXOPLAN: a billing platform for managing recurring payments. Not to be confused with a payment platform, which is what this article is actually about, but I will come to that in a moment.

With IXOPLAN, we were able to quickly acquire a mix of customer projects that were individually developed by us, as well as projects that were based on our platform. Many of these projects can be found in the Alexa 300 ranking – meaning they are projects with extreme growth and fast expansion into new markets. Due to this global growth, there was a constant need for new payment methods and local payment partners.

The challenges of extreme growth and fast expansion into new markets. 

Ten years after the company was founded, almost half of our developers were working on payment integrations - often the same integrations with a different code base. On top of that, customers had a wide range of needs, such as wanting more influence on the transaction flow. At the time we were not always able to meet all of these customer requirements. 

That was the moment we realized that we needed our own technical layer that could centralize all payment related issues. It was important for us to free up our internal resources for our actual daily business: the business logic of the platforms we support. It was at this point that I asked myself, for the first time, the question: to buy or to build?

To buy or to build: what we expected from a Payment Orchestration Platform

I decided to buy. Confident, with the very respectable transaction volume of all our platforms, I began looking for a suitable platform:

  1. Do they have all the payment integrations that we have already integrated ourselves?
  2. Do they have all the integrations that we wanted to integrate over the next 6 months?
  3. Is it able to provide new integrations in a timely manner upon customer request?
  4. Can it process all downstream processes, such as Reconciliation & Settlement Handling etc., in aggregated form?
  5. Have they mastered topics such as centralized vaulting of payment instruments and routing of transactions? 
  6. Do they offer a wide range of integration options on the shop side?
  7. Is it open for feedback and willing to implement new functions?  

I won’t bother you with all the details of the selection process now, but at this point I did not find a platform that met 100% of our requirements. In the end we decided to use three platforms in parallel and simultaneously. At that time I thought  “better three payment integrations than hundreds” and “our coverage of payment processor integrations should, from now on, be unlimited.”

The initial euphoria about having finally solved this extremely complex task by purchasing three platforms at once evaporated a few months later.

We soon realized that the offered integrations did not meet our requirements and were often incomplete (e.g. did not map all transaction types). We were faced with the problem that our customer was live and their account with the payment processor was on a different technical platform. Meaning that the integration of an intermediary payment platform was useless, as it communicated with another endpoint of a payment giant that had grown through M&A. It was never transparent for us and our customers, which of the many different endpoints was actually integrated.     

"During the selection process we realized that there was no platform that met all our requirements, even our minimum requirement – connectivity."
Rene Siegl
Founder & Executive Chairman of IXOLIT Group

Our requests to complete the incomplete integrations were answered with horrendous additional costs and development times beyond 9 months - if we were lucky enough to get a response. 

So as not to disappoint our own customers, we continued to perform direct integrations in parallel to our three purchased platforms, at the code bases managed by us, further complicating the setup. As we handled a large part of our transaction volume via our own direct integrations, we were unable to achieve the minimum transaction volumes for the purchased platforms and our business case disappeared into thin air. Unfortunately, this meant that we sometimes had to sit on the contracts and pay them off 100%. A medium-sized disaster.

In the meantime, our customers' demands on their payment setup have continued to grow, and the number of integrations we had to do ourselves reached an unimaginable number. I was again faced with the question - payment platform buy or build?

Based on our experience we decided to build 

We gathered all the experience we had gained in the years before with our “Payment Pain” and searched for possible solutions. We analyzed every customer ticket and problem, no matter how superficial it seemed, and thought about how we could optimize this process. However, we also wanted to be able to make these processes simple for ourselves. Finally, we started to build our internal payment platform IXOPAY. That's right, our "own internal" platform. You are reading this article to be able to make a decision: Buy a payment platform or build one yourself for internal purposes, right? 

But our payment platform did not stay "internal" for long. Only a few months after we put the platform into operation, companies began to approach us wanting to use IXOPAY. Companies with whom we had no business relationship with until they learned about our platform through word of mouth. What to do with all these requests? We turned down the first inquiries and told them that it was an internal platform for IXOPLAN and our existing customers...

... 3 years later, IXOPAY is one of the most successful products of our group of companies.

A payment platform that is so flexible that it can cover all your current and future payment topics requires attention, passion and a love of detail. In my career I have developed many eCommerce platforms with my team, but never anything as complex as IXOPAY. Today I am of the opinion that IXOPAY fulfills all my requirements (see points 1 to 7 above) and more, because it has grown with the wishes of our customers. 

If you would like to put as much heart and soul into your "internal" payment platform and in the end even become our competitor, I advise you to build the platform yourself. Otherwise we look forward to hearing from you.

About IXOPAY

IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a highly scalable and PCI-DSS certified “fintech enabler”, IXOPAY fulfills the needs of large merchants as well as those of “white label” clients: payment service providers (PSPs), acquirers and independent sales organizations (ISOs). The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, payment service providers and alternative payment methods (APMs).

IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The owner-led and -financed company has grown from 2 to more than 65 employees and is focused on building innovative solutions for eCommerce.

Please find more information about IXOPAY here: https://www.ixopay.com

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