Integration depth.
WHAT USING A PROVIDER GIVES YOU
Immediate access to every rail they support Compliance burden largely theirs Support when something breaks No licensing requirement of your own
WHAT IT COSTS
Their margin on every transaction Dependence on their decisions Limited control over routing and approval Their risk appetite constraining your customers
WHAT DIRECT INTEGRATION WITH INFRASTRUCTURE GIVES YOU
Lower cost per transaction at volume Control over routing Direct relationships
WHAT IT REQUIRES
Licensing, or a sponsoring institution Certification with each scheme or switch Settlement and reconciliation operations of your own Compliance capability
WHAT THE THRESHOLD IS
Volume where the margin saved exceeds the operational cost.
WHY IT IS HIGHER THAN PEOPLE EXPECT
The operational cost is continuous and includes people, not only systems.
WHAT MOST BUSINESSES SHOULD DO
Use providers, and negotiate as volume grows.
WHAT TO DO IN BETWEEN
Integrate several providers behind your own abstraction.
WHY
It captures most of the routing benefit with none of the licensing burden.
WHAT TO RECALCULATE PERIODICALLY
Whether the threshold has been crossed.
