Voice of the Industry

To build or to buy? The payment processing conundrum

Wednesday 23 August 2023 08:56 CET | Editor: Irina Ionescu | Voice of the industry

Nadia Bull Bernikova, Senior Sales Manager and Jonathan Fuller, Senior Sales Manager at Silverflow, discuss the main question of acquirers regarding payment processing – building their own solution to cater to their specific company needs or externalising the service to PSPs, payfacs, acquirers and merchants.

The payment processing landscape

Acquirer processing is entering an interesting and challenging time. This vital part of the payment ecosystem – handling the processing of merchant transactions with the card networks – has been dominated for years by a handful of processing platforms. These solutions have been built on outdated technology that is over 30 years old. 

While they have been able to process transactions from Point A to Point B, they have serious limitations (hard to maintain and upgrade, unable to deliver heavy payloads of data, slow to integrate, expensive to scale, etc.) that have frustrated users for years. The focus is often on firefighting and staying compliant rather than delivering innovation and solutions to merchants’ problems.

Challenges for acquirers in today’s landscape

Acquirers in today’s payments landscape face more challenges than ever before. In addition to the challenges caused by using outdated technologies for their payment processing, they also now face new competition from innovative fintechs. These fintechs are dominating the market because they are addressing the challenges customers are facing due to the antiquated technology of legacy processors. Additionally, they are forcing traditional acquirers to face the reality that they must address this legacy processing technology by buying newer, more innovative solutions, or building it themselves.

Should acquirers buy a new payment processing solution? 

Switching to another payment processor seems like an easy solution for these acquirers looking for more capabilities and innovations, but this too comes with its own set of issues for the acquirer. 

Most legacy payment processors do not have the modern technology required to provide the data and innovation necessary to address customers’ needs. In addition, switching to a new payment processor can take years, as the acquirer is likely under a lengthy contract with the existing processor and the process of selecting a new vendor can be arduous. 

To top it all off, a legacy processor will take months, if not years, to implement the new solution. When acquirers need a solution now to keep pace with the competition, they are looking at a lead time of one-two years minimum before they are able to implement a new processing solution. So, what if they build their own?

What if acquirers build their own payment processing solution? 

With the plethora of challenges posed by selecting a new payment processing vendor, it may seem much more appealing for acquirers to build their own processing solution. This would provide full control of the process, and enable the ability to build exactly to their specifications in theory. 

However, building a processing solution from scratch is an expensive and time-consuming project that requires a deep understanding of both the technical and business requirements of processing a credit card transaction through the entire charge lifecycle (authentication, authorisation, clearing, reconciliation, chargeback, etc.). 

Additionally, building a solution implies the ongoing maintenance and constant upkeep of new card network rules, regulations, and products. In most cases, processing is not their main business, so to keep investing into this area is only taking resources away from their core client services. This disconnection often results in build projects going well over time and over budget.  

Often, acquirers may spend more than five years and hundreds of millions on a solution that might not be better than their existing one, and, in some cases, already out of date and non-compliant as soon as it is deployed into production. 

With so many challenges in these two solutions, what can acquirers do to stay competitive?

How can acquirers stay competitive? Innovation in payment processing

Payment processors have not evolved in the past three decades, forcing acquirers to consider building their own platform just to compete with the new PSPs and acquirers. A few payment industry veterans recognised this growing problem and came together to create Silverflow, a new kind of payment processor that provides acquirers, ISOs, payfacs, and even marketplaces with: 

  1. Modern technology: The cloud offers a flexible and scalable infrastructure to build a modern processing platform.

  2. Ease of use: The solution should offer easy APIs to make integration quick and reduce development resources. 

  3. Access to data: Ideally, the solution should have direct connections to the card networks and provide all transaction data. This would lead to more efficient and effective processing.

  4. Ability to support global expansion: Acquirers should be able to expand into new countries/regions without lengthy and expensive certifications.

Interested in learning more about this modern payment processing solution? Contact Silverflow at info@silverflow.com. 



About Nadia Bull Bernikova

Prior to joining Silverflow, Nadia has worked for multiple payments companies providing solutions to merchants, gateways, acquirers, and other payments' companies. She has over 14 years of experience in consulting and selling alternative payment methods, international acquiring, payments processing platforms, fraud prevention and FX tools. Nadia is part of the commercial team and is responsible for the relationships with new clients and growing the overall global client base within Silverflow.

Jonathan Fuller

Jonathan has held numerous client and partner-facing roles over the course of 18 years in payments. After several consulting roles, he started his career in payments in 2004 with ChasePaymentech, followed by stints at RBS Worldpay, Adyen, Vantiv, Silicon Valley Bank, and Gulf Oil. Jonathan is focused on expanding Silverflow's presence in the United States.



About Silverflow

Silverflow is a new kind of payment processing platform designed for today's payment needs and fit for the future. A cloud-native solution with a single API to the card networks. One platform with one connection. Reducing cost and complexity, easy to use, and data-rich, Silverflow frees you to innovate.


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Keywords: online payments, PSP, merchant, marketplace, payment processor, payment processing, online authentication, reconciliation, chargebacks, fintech
Categories: Payments & Commerce
Companies: Silverflow
Countries: World
This article is part of category

Payments & Commerce


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