When to Build a Payment Gateway and When to Opt for Open Source

Changing your payment gateway is a massive undertaking, regardless of how you approach the matter.  Building your own payment gateway from the ground up is especially complicated when you consider all of the technical and legal issues that come into play.

For most companies, licensing an existing open source payment gateway is a better option than starting from scratch.  Any payment solution, including open source, has its drawbacks, but for many companies, open source is significantly easier than building from scratch.

When Building a Payment Gateway Makes Sense

Today there are more companies looking for a good payment gateway option than ever.  For most small businesses, a third party hosted solution is sufficient.  Larger companies, however, typically need a solution with more flexibility and power.  Hosted payment gateways are owned and managed by gateway service providers at large data centers.  They charge by the transaction, and many of them also charge monthly fees.

Opting for a hosted solution has the advantages of minimal upfront costs, no need to be concerned with PCI compliance, and good technical support.  The biggest drawback comes in the form of fees that can be significant if your sales volume is high.  Also, you have little control over processing, features, or many other aspects.

As your company grows and your transaction volume increases, you may find that you need your own payment gateway, but creating one can be a daunting proposition at best, unless you have a team of programmers working for you, an asset most small businesses can’t afford.

Challenges Involved with Building a Payment Gateway

For many small businesses, hiring a team of programmers is not in line the model or goals of the business.  If your business offers financial services or is interested in accomplishing your own financial needs with a payment gateway, hiring a team of software developers could end up defeating your purpose.

That’s not to say there are no advantages to creating your own payment gateway, there are significant advantages to building a payment gateway, including:

  • Control – When you build your own payment gateway, it’s your from beginning to end.  This means you have complete control over every feature and every aspect of how it works.  Once done, it will meet your needs perfectly.
  • Unique – Because it’s made to meet the very specific needs of your business, your payment gateway will be completely unique.
  • You own it – Because it is all yours, you never have to worry about losing it.  There’s no concern about your host going out of business, or changing their terms and dropping you.

For all the advantages, there are some serious drawbacks to building your own payment gateway.  Besides needing to hire a team of developers, building the software takes time.  Building payment gateway that has all the features and functionality you want can take years before you’re ready to launch.  If you don’t have knowledgeable people on your development team, you could find yourself starting over several times, or even failing outright.  Then, of course, you have to make sure you are in compliance with all legal requirements.

All the work required to develop the software can also cause you to lose focus on your business.  Unless payment processing is your core business, it makes little sense to spend the amount of time and money required to create the software.

Even after you get your payment gateway built and deployed, the work still isn’t done.  You will still need to monitor every aspect of operation to ensure it continues working properly, which means long term commitment.

Why Open Source is a Better Option

Licensing a payment gateway involves licensing software from a third-party company which is deployed on a PCI-compliant platform owned by your company.  This may be your own data center, or a series of servers in the cloud.

Open source payment gateways have many advantages, including:

  • Function – An open source payment solution is ready to launch and use immediately, without having to hire a development team.  If you need special functions, that can be arranged through the software company.
  • Advancements – Because the software is not unique to your company, you can benefit from enhancements made by other companies that already use the software.
  • Fixed cost – Licensing an open source solution is generally far less costly than creating your own.  Because you know exactly how much it will cost, you can figure it into your budget and ensure that it isn’t going to drain your resources.

Just like any other solution, open source does have some drawbacks.  You may be reluctant to rely on an outside company for your payments.  You may find yourself using a product with a bunch of features you don’t need, and any improvements made for your company will be available to other businesses that use the software.

For many companies, the most important considerations are cost and functionality.  In most cases, having unneeded features and sharing enhancements are not serious issues compared to being able to have a fully functioning gateway ready to launch immediately and for a set cost.

Open Source Payment Gateway May Be Right For You

The payment gateway at Open Source Payment Gateway is a licensed commercial open source solution that can be implemented immediately.  If you need to launch a payment gateway right now, Open Source Payment Gateway is a fantastic option that will do the job well, without the expense and time commitment of building your own gateway.

You can deploy the software quickly with minimal legal issues.  We can move forward whenever you are ready.

If you are ready to proceed without building your own solution from the ground up, give us a call and we will be happy to answer all of your questions about the Open Source Payment Gateway.  Our solution may be the perfect one for you.  What have you got to lose?  Give us a call today.