Updated: September 2025 (Originally published June 2022)
"Every B2B platform will become a fintech in the next 5 years—the only question is whether they'll build or buy their way there."
TL;DR: Building financial features in-house typically takes 12-18 months and requires 15-20 engineers, while buying embedded finance solutions enables launch in 4-6 weeks with 10x higher adoption rates. The 80/20 rule of embedded finance: 20% of complexity is visible upfront, 80% emerges during implementation.
The Fintech Capability Trap
"The Fintech Capability Trap: Teams skilled enough to build financial features are precisely the ones who shouldn't—their expertise is too valuable to waste on solved problems."
This paradox defines modern platform strategy. Your best engineers—the ones who could theoretically build invoicing or payments—should be building your unique value proposition, not recreating infrastructure that already exists.
The 80/20 Rule of Financial Complexity
"Financial automations follow an inverse iceberg principle: 20% of complexity is visible during planning, while 80% lurks beneath the surface, only discovered during implementation."
The Invoice Automation Iceberg:
Visible (20%): Generate PDF, send email, track status
Hidden (80%):
60+ country-specific formats
Tax compliance across jurisdictions
Payment reconciliation across methods
Partial payments and FX fluctuations
E-invoicing regulations (Peppol, CFDI)
Dunning sequences and credit notes
This hidden complexity causes teams to underestimate resources by 3-5x, turning 6-month projects into 18-month marathons.
The Real Cost of Building
Factor | What Teams Expect | Reality |
|---|---|---|
Timeline | 6 months | 12-18 months |
Team Size | 5-7 engineers | 15-20 specialists |
Initial Investment | $500k-1M | $2-5M |
Maintenance | 20% of build cost | 40-60% annually |
Feature Adoption | 10-15% | 1-2% |
"In-house financial features achieve 1-2% adoption rates while embedded solutions reach 20-30%—a 15x difference that reveals the gulf between functional and excellent."
The Stripe Moment for Embedded Finance
"We've reached the 'Stripe moment' for embedded finance—where building in-house shifts from competitive advantage to competitive disadvantage."
The Historical Parallel:
Era | Payments Industry | Embedded Finance Today |
|---|---|---|
Pioneer Phase | Everyone built gateways (2000s) | Everyone building invoicing (2020) |
Inflection Point | Stripe emerges (2011) | Embedded APIs mature (2024) |
New Reality | Building = competitive disadvantage | 👈 We are here |
End State | Nobody builds payments | Nobody builds financial features |
Just as no serious platform builds payment processing today, building financial features in-house will seem equally absurd by 2030.
The Opportunity Cost Equation
"Every month spent building financial features is a month not spent building your moat. In winner-take-all markets, this opportunity cost is often fatal."
The True Cost Calculation:
Direct costs: $2-5M development + $1M annual maintenance
Opportunity cost: 15-20 engineers not building core features
Revenue delay: 12-18 months of lost transaction revenue
Market cost: Competitors gain ground while you build tables stakes
The Multiplier Effect: Platforms that buy embedded finance solutions don't just save costs—they compound advantages:
Launch financial features in 6 weeks
Redeploy engineers to core innovation
Generate revenue 12 months earlier
Iterate based on real usage data
Why Smart Teams Still Build (And Why They're Wrong)
"The smartest teams often make the worst build decisions because they can envision the solution. But possibility isn't probability, and capability isn't capacity."
The Three Dangerous Beliefs:
"It's just CRUD operations"
Reality: Financial data has unique constraints, compliance requirements, and error tolerance
"We'll start simple"
Reality: Customer expectations are set by best-in-class solutions, not MVPs
"We need custom features"
Reality: 95% of requirements are common; the 5% rarely justify building 100%
The Network Effects Advantage
"When you buy embedded finance, you're not buying today's features—you're buying every feature every customer will ever request, built by someone else."
The Compound Benefits:
R&D leverage: 100+ platforms funding innovation
Regulatory expansion: Shared cost of new market entry
Integration ecosystem: Pre-built connections multiply
Industry expertise: Vertical-specific features emerge
Security updates: Continuous hardening against threats
This network effect means the gap between build and buy widens every day.
The Strategic Framework
"The decision to build or buy financial features is really a decision about what kind of company you want to be—a fintech or a category leader in your vertical."
Build Only If:
Financial services ARE your core business
You have 50+ engineers sitting idle
You need genuinely unique functionality (not just preferences)
You're willing to become a regulated financial institution
Buy If:
You want to win your actual market
Speed matters more than control
You value focus over features
You understand that infrastructure is not differentiation
The Platform Evolution Playbook
Leading platforms follow a predictable pattern:
Phase 1: Focus on core value proposition
Phase 2: Identify financial friction points
Phase 3: Integrate embedded finance APIs
Phase 4: Monetize financial features
Phase 5: Expand financial offerings based on usage
"Platforms that try to jump to Phase 5 by building everything themselves never make it past Phase 3."
The 2025 Reality Check
Three market forces make buying inevitable:
Regulatory Acceleration: New compliance requirements every quarter
Customer Expectations: Set by billion-dollar fintech products
Competitive Pressure: First-mover advantage in financial features
"In 2025, building financial features in-house isn't just slow—it's strategically negligent. The question isn't whether to offer financial services, but how quickly you can deploy them."
Conclusion: The Choice That Defines Winners
The build vs buy decision for embedded finance will separate the next generation of platform winners from also-rans. History shows that infrastructure commoditizes, and companies that recognize this trend early gain insurmountable advantages.
"A decade ago, companies like Uber and Shopify bet on Stripe instead of building payments. Today's billion-dollar platforms will make the same bet on embedded finance infrastructure."
The platforms that win won't be the ones that built the best invoicing system—they'll be the ones that deployed financial features fastest and focused on what makes them unique.
The only question that matters: Will you spend the next 18 months building table stakes, or will you spend the next 6 weeks deploying financial features and the next 18 months building your moat?
