The hidden cost of scaling: When payment operations become a bottleneck

You have a solid platform business and are ready to scale. But all of a sudden you notice more and more operational load on your teams. Turns out your payments solution does not scale, because it was never built for platforms. You might think this complexity is unavoidable. It's not.

Why traditional payments don't work for platforms

Payment providers designed their systems assuming payments are linear. A simple transaction between buyer and seller. You can authorize, capture, maybe refund, and you're done.

Platform businesses need something completely different. Airbnb doesn’t pay a host until the guest checks in. GetYourGuide doesn’t even know who the host is when the payment is made. SaaS companies serving SMBs don’t just take a cut. They are so interwoven with the payment operations they become a payment provider themselves. If not handled properly, this can become very complex.

Why your ops team is drowning in payment chaos

The core issue is that you need to track everything yourself. This creates operational complexity that grows with your platform. Resulting in less innovation and more maintenance.

Consider a simple example: booking software for events where you need to split payments between the platform, event organizer, and venue.

How do you facilitate this use case? Each PSP is different. Sometimes you need to settle to one account and then transfer the money later. This approach forces you to split one logical transaction into two unrelated financial events. Now how do you get your fee? Do you just transfer less? And what about a chargeback or a cancelled event?

Your event organiser can’t close the books anymore because she only sees net amounts. Alternatively, you can keep track of everything yourself and generate your own reports. It’s possible, but it won’t be easy. 

Maybe your setup doesn’t require you to transfer the split, but instead the splits are special objects which you can’t refund, or the fee is a split itself. These workarounds create new operational headaches, but the root cause is the same. Splits, balance transfers and fees are special things bolted on later. You lose the connection to the original transaction and therefore traceability.  Your ops team wastes hours every week reconciling payments across different systems.

Sooner or later you will find yourself with workarounds eating into your margins. Why not use a system that gives you all of this out of the box?

Payment operations that actually scale

With Rootline, every split is a payment itself. Any action you can do on a payment, you can also do on a split. You only have to implement one refund or capture API call, not a separate one for splits. This saves time on integrations and reduces operational complexity.

Just like splits, fees are first-class citizens in our system. Because fees have their own identifiers, you can change them later without creating clutter in your reporting. Reconciliation becomes easy for your users and your own accounting team. 

On top of this, our flexible fee structures allow you to define which interactions you charge. You can charge on every payment or only successful ones, on refunds, or on payout.  Whatever makes sense for your business.

Turn payment operations into revenue opportunities

Easier operations does not only mean less cost, it can also support new business models.

What you often notice is that platform operations are designed around traditional payment operations:  shopper interactions (capturing funds from a card) are too tightly coupled to seller operations (determining the split) resulting in a rigid system and a subpar experience for the seller.

So what does this mean concretely? You, as a booking platform, might not know who will facilitate an event when the ticket is bought. Traditional systems force you to decide how to split money before you have all the information. This means you have to come up with some hack to make it work, which will translate into engineering and operations costs. With Rootline you can reserve money on your payment, and add a split later. 

Another example is dynamic funds release. You can set when the money should be released per transaction or per account. For reasons of fraud protection, no-shows, and chargeback mitigation, you might want to only release the money after the event. Of course, the fees you earn can be released immediately.

Lastly, platforms need flexible fee management. The fees you charge your users often depend on dynamic variables, like the actual cost from your PSP and characteristics of the transaction itself. Rootline gives you full visibility into these details and lets you update fees independently of traditional payment lifecycle events. This means you can adapt in real time and optimize margins on each individual transaction. 

Stop building payment infrastructure. Start building your business.

The right payment architecture unlocks new revenue streams. It’s time to think about how to grow your revenue instead of how to manage your operations.

Plan a demo now to see our product in action.