Buy vs. Build vs. Partner: The Definitive Framework for Payment Infrastructure Decisions in Series B FinTech
- Sean Graham
- 1 day ago
- 3 min read
Updated: 7 hours ago
For a Series B FinTech, payment infrastructure is no longer just a feature—it is the core revenue engine and a primary determinant of enterprise valuation.
At this stage, you’ve validated product-market fit, reached high transaction volume, and are now confronting a critical strategic decision: How should we architect our payment flows for maximum long-term profitability and scale?
The 'Buy vs. Build' dilemma is an oversimplification. The real challenge involves three complex options, each carrying significant implications for your runway, hiring plan, and regulatory risk. The choice you make now will define your operational spend for the next five years.
Here is a definitive framework for evaluating the three strategic approaches to payment infrastructure at Series B.
1. Option: Build (The Custom Engine)
Definition: Developing proprietary technology and directly interfacing with processors, card networks, and banking partners. Your team owns the logic, the ledger, and the compliance framework.
Metric | Analysis | Strategic Fit |
Control & Customization | Highest. Full control over data, routing, and risk logic. Required for highly unique or complex payment flows (e.g., fractional ownership, intricate escrow). | |
Speed to Market | Slowest. Requires a large, specialized engineering team. GTM can be delayed by 12+ months due to compliance and certification. | |
Cost Profile | High CapEx / Low OpEx. Massive upfront investment, but the lowest per-transaction cost long-term. | |
IP & Valuation | Highest IP Value. Your payment infrastructure becomes a unique, defensible asset that significantly boosts enterprise valuation. |
2. Option: Buy (The Integrated Platform)
Definition: Licensing an all-in-one, fully managed payment platform (like a full-service payment processor or gateway) that handles all steps—from acceptance to settlement—through a single vendor relationship.
Metric | Analysis | Strategic Fit |
Control & Customization | Lowest. Limited control over routing, fees, and data. Customization is restricted to the vendor's API layer. | |
Speed to Market | Fastest. Quick implementation via unified APIs. Ideal for immediate feature deployment and geographic expansion. | |
Cost Profile | Low CapEx / High OpEx. High per-transaction fees and platform costs. Can lead to vendor lock-in and difficult migration later. | |
IP & Valuation | Low IP Value. Payment is a commodity utility. The focus shifts entirely to your core SaaS/FinTech product layer. |
3. Option: Partner (The Hybrid Model)
Definition: Strategically partnering to own the critical, proprietary elements (e.g., the ledger, the custom risk engine, the unique user experience) while outsourcing the commodity utility functions (e.g., compliance, core banking access, card issuing).
Metric | Analysis | Strategic Fit |
Control & Customization | High. You maintain control over your strategic IP layer (the how) while delegating undifferentiated complexity (the utility). | |
Speed to Market | Medium. Faster than Build, as you avoid core infrastructure certification. Requires careful due diligence and integration planning with partners. | |
Cost Profile | Balanced. Moderate CapEx for integration; competitive OpEx due to volume-based partner pricing. | |
IP & Valuation | High. This strategy maximizes your internal engineering focus on building competitive advantage while leveraging partner efficiency. |
The Series B Decision Framework
At Series B, your mandate is to scale profitably and predictably. The Partner (Hybrid) Model is often the strategic sweet spot, allowing you to focus your limited engineering resources on your core intellectual property while de-risking infrastructure and compliance by relying on proven specialists.
Use this framework to guide the conversation across your executive team:
Question | If the Answer is YES... | Strategic Recommendation |
Is the payment flow a core differentiator of your product? | YES (e.g., unique escrow, complex multi-party settlement) | BUILD the strategic logic; PARTNER for processing/compliance. |
Do you plan to raise substantial capital at a higher multiple based on payment IP? | YES | BUILD the underlying engine, even if phased. |
Are your needs simple and standardized (e.g., standard e-commerce)? | YES | BUY an integrated platform for maximal speed and simplicity. |
Do you need speed-to-market in a regulated area (e.g., BaaS, lending)? | YES | PARTNER with a provider that already holds the necessary licenses. |
The Right Choice is a Phased Strategy
The decision is rarely permanent. Smart FinTechs use a phased approach:
Phase 1 (MVP/Seed): Buy an integrated platform for proof-of-concept velocity.
Phase 2 (Series A/B): Partner to transition out of the costly "Buy" environment, carving out proprietary functions like the ledger and risk engine to establish control.
Phase 3 (Scale/Pre-IPO): Selectively Build highly differentiated services to drive competitive advantage and maximize margin, pushing towards a Direct Banking Sponsorship model where appropriate.
ExpandUp Consulting helps Series B leaders navigate this complex inflection point, providing the strategic blueprint and the operational expertise to select, integrate, and manage the infrastructure that will drive your next stage of growth.
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