La Minute Builder #20 — E-commerce, SaaS, ticketing or marketplace: how do you choose the right payment architecture?

When I started working on a paid ticketing platform, I thought the first question would be: which payment provider are we going to integrate?

But the real question was: who collects the money, on whose behalf, when, and with what responsibility?

An online store, a SaaS product, a ticketing platform and a marketplace can all display the exact same “Pay” button…

While relying on very different financial architectures.

E-commerce: the company collects for itself

In traditional e-commerce, the company generally sells its own products and collects payment on its own behalf.

Customer → Company

SaaS: managing the payment lifecycle

With a SaaS product, I had to account for different concerns:

• Recurring subscriptions
• Plan changes
• Proration
• Invoices
• Failed payments
• Dunning and payment reminders

Ticketing and marketplaces: orchestrating flows between several parties

Then, while working on a paid ticketing platform, I discovered an essential distinction.

If the company sells its own events, payment can work just as it does in traditional e-commerce.

But if the platform collects payments for several event organizers, everything changes.

Buyer → Platform → Organizer

At that point, this is no longer only about accepting a credit card.

You also need to manage:

• Identifying the organizers
• Their KYC (“Know Your Customer”), which verifies a person's identity, or KYB (“Know Your Business”), which verifies a company's identity and legal existence
• The platform's commission
• Payouts
• Refunds
• Disputes
• Potential negative balances

That is when I realized I was no longer only looking for a PSP (Payment Service Provider): a provider that lets you accept and process electronic payments.

I was looking for a solution able to orchestrate financial flows between several parties.

That is precisely the role of solutions such as Stripe Connect, Lemonway, Mangopay or Lyra Marketplace.

Four questions to ask before comparing providers

• Who collects the money?
• On whose behalf?
• At what point?
• With what responsibility?

Choosing the provider only comes after that.

That is also what I like about Product Engineering: behind a button that looks very simple can sit an entire product's technical, financial and regulatory architecture.