Build versus buy: the decision framework for payment technology

The build versus buy decision is the most expensive decision a payment firm makes, and it is usually made with too little information. Building a payment hub means hiring a team, writing the code, testing it, certifying it, and maintaining it for years. Buying a payment hub means paying a licence fee, configuring it, integrating it, and paying for support. The decision must be made on total cost of ownership over five years, not on the first year cost, because the first year of a build looks cheap and the fifth year looks expensive, while the first year of a buy looks expensive and the fifth year looks cheap. Total cost of ownership has five components. The first is the licence or the build cost. The second is the implementation cost, which is the integration, the configuration, the testing and the certification. The third is the run cost, which is the infrastructure, the support, and the operations team. The fourth is the change cost, which is the cost of each scheme rulebook update, each new corridor, and each regulatory change. The fifth is the exit cost, which is the cost of moving to another vendor or another platform. A decision that ignores the exit cost is a decision that locks the firm in without knowing it. Time to market is often the deciding factor. A firm that needs to launch in six months cannot build a payment hub in six months, because a hub takes 18 to 24 months to build, test and certify. A firm that buys can launch in six months, because the vendor's hub is already built and certified. But the firm that buys must accept the vendor's roadmap, the vendor's release cycle, and the vendor's priorities, which may not match the firm's own. The decision must therefore weigh the value of launching early against the cost of losing control. Control is the other deciding factor. A firm that builds its own hub controls the roadmap, the release cycle, and the architecture. It can add a corridor in weeks, change a screening rule in hours, and fix a defect without waiting for a vendor. A firm that buys must wait for the vendor's release, must pay for customisation, and must accept that the vendor's other customers have different priorities. The firms that build are usually the large banks with the scale to justify it. The firms that buy are usually the smaller firms that need to launch quickly. Risk is the factor that is most often underestimated. A build carries the risk that the team cannot deliver, that the hub fails certification, or that the key architect leaves. A buy carries the risk that the vendor fails, that the vendor is acquired, or that the vendor's roadmap diverges from the firm's needs. Both risks must be assessed, and the mitigation must be written down. For a build, the mitigation is a strong team and a realistic plan. For a buy, the mitigation is a contractual exit right, a data export capability, and a second vendor as a backup. The hybrid is the most common outcome. Most firms buy the core payment hub and build the parts that differentiate them, such as the customer journey, the pricing engine, or the analytics. The hybrid gives the firm the speed of buying and the control of building, but it creates an integration boundary that must be managed. The requirements must state exactly where the boundary is, who owns each side, and how the two sides communicate. A hybrid where the boundary is not defined will fail, because each side will assume the other handles the exception. A worked comparison shows how the decision is made. Building a hub costs EUR 2 million to build over two years, EUR 400,000 a year to run, and EUR 200,000 a year in change costs, a five-year total of EUR 5 million. Buying a hub costs EUR 800,000 in licence and implementation in year one, EUR 500,000 a year in licence and support, and EUR 100,000 a year in change costs, a five-year total of EUR 3.8 million. The buy is EUR 1.2 million cheaper over five years, but the business case must also price the exit cost of EUR 300,000 and the value of launching 18 months earlier. For a business analyst, the build versus buy decision is a business case. The business case must state the total cost of ownership over five years, the time to market, the control, the risk, and the recommendation, with the numbers. The acceptance criteria must include a test where the business case is reviewed by finance, technology, risk and the product owner, and all four agree. Last reviewed 7 November 2026. Further reading: the Gartner Magic Quadrant for payment hubs; the Celent payment hub vendor reports; the McKinsey paper on payment modernisation; the Bank for International Settlements work on payment system modernisation.