Building A Payment Gateway From Scratch Vs. Licensing An Open Source Solution

in Blog
on Friday, 12 December 2014 18:23

Implementing a new payment gateway is a large project -- no matter how you look at it. But creating a payment gateway from scratch can be particularly daunting, especially since there are so many technical and legal issues that must be considered.
For many companies, it makes sense to license a commercial open source solution rather than reinventing the wheel. This option has its downsides, but in the eyes of many executives, the challenges are considerably fewer than starting from scratch. Which approach is right for you?

When To Consider Your Own Payment Gateway

More companies need a payment gateway than ever before. For small businesses, choosing a hosted solution provided by a third party is more than acceptable. But as a company grows, there’s often a desire to move to a more flexible and robust system. While hosted solutions are managed at large data centers and owned by a gateway service provider, your company must pay per-transaction fees and often monthly fees to use these services.

While a hosted solution means few upfront costs, no need for a PCI compliance infrastructure and a high level of support, the fees -- which can be substantial as your sales volume grows -- aren’t the only downside. You don’t have complete control over the processing environment, the feature set or much of anything else.

Growing companies with a high and increasing volume of transactions can often benefit from having their own payment gateway, but building a gateway from start to finish can be a daunting task for a company that doesn’t already have a team of programmers at its disposal.

The Challenges Of Building A Payment Gateway

In fact, employing a large team of programmers is contrary to the goals and business model of some companies. For a company interested in providing financial services or in meeting its own financial services needs with a payment gateway, adding a software development team could be quite a diversion.

There are significant advantages to building your own payment gateway, however. These include:

- Total control. It’s your baby from beginning to end, and that means you have control over its features and how it works. It’s sure to perfectly meet your needs.

- Complete uniqueness. It won’t be like anyone else’s system because it will take into account the specialized needs of your company and the industries you serve.

- Ownership. Since all the functionality and APIs are yours, no one can take them away from you.

But there are disadvantages. In addition to needing a specialized group of developers, you’ll need a lot of time. It can take years to get a full-featured payment gateway ready for deployment. That’s if you have the right programmers with the right specialized knowledge on your team. If you don’t, the project could fail or require starting over multiple times. Plus, there are all the legal and compliance issues.

Developing this technology from scratch can also cause you to take your eye off the ball. If payment processing isn’t your core business, it might not make sense to devote significant time and resources to payment issues when your company could be focused on what it does best.

If you’re successful in developing a gateway, every aspects of its operation will have to be monitored perpetually to make sure it works correctly and doesn’t go down. That means a long commitment to a big management project.

Why A Commercial Open Source Payment Gateway Makes Sense

A licensed payment gateway involves software licensed from a third-party development company and deployed for you to a PCI-compliant environment that you own. This could be a set of servers in the cloud or your own data center.

With a commercial open source solution, there are many advantages, including:

- It works. Just as it comes, it will work for you and is ready to use from Day 1. You don’t need a development team of your own, and you can arrange for special functions and customization with the software company.

- You benefit from advancements by and for others. Because a commercial open source software project has other users, your company benefits from enhancements made on their behalf. The other clients push for new functionality just as you do.

- The cost is fixed. The cost of a licensed solution is usually much less than creating your own gateway -- and since the cost is fixed, you can budget for it and know for sure that the project won’t exceed your available financial resources.

Of course, every approach has its disadvantages. Your company may be reluctant to depend on a third party for your payment gateway. The product may contain many features you don’t need, and you can’t keep any advancements made for your benefit to yourself. Others who use the same licensed payment gateway benefit from your ideas just as you benefit from theirs.

For many companies, it comes down to cost and functionality. It’s not a major issue, in most cases, if the feature set is wider than you need or if you must share your enhancements and advancements when you can get a fully-functional solution up and running quickly and for a fixed cost.

UniPay Could Be The Solution For You

The UniPay payment gateway is available as licensed commercial open source software that your company can implement and use right away. If your business model requires getting a payment gateway solution in place immediately, turning to UniPay is a smart decision that will serve you well since developing your own solution simply isn’t an option.

The UniPay gateway from United Thinkers is flexible, robust -- and ready. The legal hassles are minimal, and the deployment time is quick. We’re ready to move forward when you are.

Is it time to get moving without reinventing the wheel? If so, let us explain the UniPay gateway to you. We could offer just the solution you’ve been looking for.

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