Open-source payment gateways: benefits, drawbacks & alternatives
September 30, 2025
9 min
Open-source payment gateways are often the go-to choice for many startups and small businesses. The promise of downloading source code, spinning up a self-hosted system, and tailoring it to support custom flows, region-specific payment methods, or niche use cases is undeniably attractive.
While open-source gateways offer flexibility and low entry costs, beneath the surface, they can pose serious challenges — from compliance gaps to scaling bottlenecks and ongoing maintenance headaches.
This guide breaks down how open-source payment systems work, highlights key projects, and explores alternatives for scaling businesses.
What is an open source payment gateway?
An open-source payment gateway is software with publicly available source code that allows businesses to process digital transactions, including credit card payments, digital wallets, bank transfers, and other forms of payment.
Unlike proprietary or SaaS-based solutions, open-source payment platforms allow developers to access and modify the software, then deploy it within their own infrastructure. They serve as the bridge between the merchant and payment processors, encrypting sensitive data and securely routing it to the acquiring bank for authorisation.
Most open-source payment systems are built and maintained by communities or foundations. While they offer significant freedom in theory, they also place full responsibility for compliance, security, and maintenance on the business.
Popular examples of open-source payment gateways
Several projects are considered the best open-source software for a payment gateway, each with a different focus area. Some aim to provide complete open-source payment systems with billing or wallet management, while others are libraries or middleware that developers can extend into a working payment platform.
Below are some of the most widely recognised options:
| Name | Key features | Main drawback |
|---|---|---|
| Apache Fineract | Banking platform, wallet storage, loan management, extensible APIs | Primarily a core banking solution, not a dedicated payment gateway; requires heavy customisation |
| Kill Bill | Billing and subscription management, payment orchestration plugins, and extensibility | Complex initial setup, limited out-of-the-box PSP integrations |
| Active Merchant | Ruby-based library for integrating multiple payment processors | Requires developer expertise; not a turnkey system |
| Payara | Open-source Java platform with enterprise extensions, cloud-ready | Not payment-specific; better suited as middleware for developers |
| Flutterwave OSS tools | Plugins for open-source payments, regional connectivity in Africa | Limited global reach; primarily a complement to proprietary services |
While these solutions provide functional building blocks, none of them are ready-to-use, PCI-compliant payment gateways out of the box. They serve as valuable starting points for developers, but most are not designed as full-scale, business-ready payment solutions.
Advantages of open-source payment systems
While they aren't always business-ready, open-source payment systems offer meaningful benefits, particularly for small-scale projects, developers, and experimental use cases.
- Lower upfront costs. The software is free to use, so you avoid licensing fees and can experiment without a major initial investment.
- Ready-made solution. If an open-source gateway works for your use case and you have a technical team to set it up, it can be a simple, low-cost way to start processing payments.
- Community-driven innovation. Many projects are backed by active developer communities that contribute patches, plugins, and integrations. This open ecosystem fosters innovation.
- Educational value. For startups, research teams, or developers learning about open-source payment processing, these projects offer hands-on experience with the architecture of payment systems.
Real-world use cases 📚
- Prototyping and MVPs. Early-stage startups sometimes use open-source gateways to validate their payment flows without committing to licensing fees.
- Regional or niche payments. Companies operating in markets underserved by global PSPs (e.g., Africa, LATAM) may experiment with open-source tools that support local methods.
- Educational & training. Universities, coding bootcamps, or R&D teams often rely on OSS projects for learning and experimentation.
Hidden challenges & risks
The appeal of open source fades once you consider the real-world demands of running payment infrastructure. Here are the major pitfalls:
Сost of ownership
While the code is free, deploying a production-grade open-source payment platform requires:
- Dedicated developer teams
- Infrastructure (servers, storage, cloud resources)
- Ongoing monitoring and upgrades
- External audits and penetration testing
These hidden costs often surpass SaaS subscription fees.
Security & compliance
Handling sensitive customer data means strict compliance with PCI DSS, PSD2, and GDPR. Open source software does not come with built-in fraud prevention or compliance guarantees. Businesses must additionally hire security auditors, implement encryption and tokenisation mechanisms, and regularly patch vulnerabilities.
For many, compliance requirements outweigh the apparent cost savings, as a single failure can result in heavy fines and reputational damage.
Scalability & performance
Open-source payment solutions are rarely optimised for high transaction volumes. Large enterprises processing thousands of payments per second face severe bottlenecks without deep system re-engineering.
Maintenance & support
Unlike SaaS providers that offer 24/7 support, open-source projects often rely on community forums and sporadic documentation updates. If something breaks in your open-source payment orchestration flow, support may be limited to community forums and documentation – a significant gap compared to vendor-backed SLAs.
Open-source payment gateways can quickly become a nightmare. Sometimes you deal with outdated libraries and frameworks that are tough to maintain, and when a security issue arises, it may take weeks for the community to fix it. On top of that, the true cost of an open-source payment gateway often emerges when customisation is needed — maintaining development teams, DevOps, and cloud infrastructure can turn a free solution into an expensive one.
Vadym Berezdetskyi
Software Engineer at Corefy
Integration gaps
Most open source payment systems lack pre-built integrations with popular PSPs, wallets, and banking APIs. Businesses must build and maintain these connectors themselves.
Best practices if you still want to use open-source for payments 📚
- Keep your system updated and regularly patched.
- Hire compliance consultants for PCI DSS and data protection audits.
- Use third-party fraud prevention tools.
- Treat your open-source payment solution as a stepping stone, plan for migration to SaaS or white-label once volumes grow.
Open-source vs SaaS payment platforms
Both approaches aim to facilitate secure payment processing, but they differ drastically in cost structure, compliance responsibilities, scalability, and long-term sustainability.
Let’s break down the key differences side by side:
| Criteria | Open-source payment gateway | SaaS payment platform |
|---|---|---|
| Cost | Free software, but high hidden costs (development, compliance, servers, audits) | Predictable subscription fees, usually cheaper long-term |
| Compliance (PCI, PSD2) | DIY responsibility, businesses manage certification themselves | Built-in compliance, provider certified |
| Security | Internal team must implement and monitor security | Provider-managed monitoring, regular updates |
| Scalability | Limited, requires custom engineering | Enterprise-grade scalability out of the box |
| Integrations | Limited or no pre-built integrations | Dozens to hundreds of ready-made PSP and wallet integrations |
| Support | Community-driven, inconsistent | Dedicated vendor support with defined SLAs |
| Speed of deployment | Long deployment cycles (weeks to months) | Rapid deployment (go live in days) |
Open source suits experimentation and small-scale projects. For growing businesses, SaaS solutions typically provide greater security, faster time to market, and lower total cost of ownership.
When open-source payment gateways make sense
Despite its drawbacks, there are scenarios where an open payment gateway makes sense:
- Prototype projects. Testing payment flows for early-stage startups or research labs.
- Education. Training developers and engineers in the mechanics of payment processing.
- Non-critical applications. Internal tools or environments without strict compliance requirements, such as demos or sandbox testing.
- Budget-limited experiments. Small businesses with low transaction volumes and in-house technical expertise.
For revenue-generating businesses, the challenges usually outweigh the benefits, making SaaS platforms a more secure, scalable, and cost-effective choice.
Open-source payment gateways are perfect if you’re building a prototype, testing new ideas, or running an educational project. They give your team something to experiment with at almost no cost. But once you’re handling real customer transactions, you’ll want the peace of mind that comes with a secure, compliant, and scalable platform. That’s the point where moving to SaaS or white-label solutions makes much more sense.
Denys Kyrychenko
CEO & Co-founder of Corefy
Why businesses choose Corefy instead
Although payment gateways offer flexibility, they also shift the burden of compliance, security, and maintenance onto your business. That's why many growing companies turn to payment orchestration platforms and white-label payment gateway providers, like Corefy, that combine the freedom of customisation with enterprise-grade reliability.
Corefy delivers all the benefits of open source – customisation, integration flexibility, multi-provider routing – without the burdens of constant patching, costly audits, or building integrations from scratch.
Here's what you get by opting for Corefy:
- Out-of-the-box compliance. PCI DSS certification is built in, helping you reduce liability, avoid costly audits, and focus on growth.
- Accelerated time to market. With 550+ ready-made integrations to PSPs, acquirers, wallets, and local payment methods, you can go live in new regions or channels faster without the need to build connections on your own.
- Ability to build your brand, not infrastructure. Our solutions let you launch your own white-label PSP or payment gateway without the heavy lifting of development and maintenance.
- Boost to payment success rates. Our Routing & Cascading ensure more transactions are approved, making the customer experience smooth and increasing revenue.
- Expert support. You have access to dedicated guidance, proactive updates, and clear SLAs to keep your operations running smoothly.
- Grow without limits. Our platform supports scaling businesses, so you can confidently process enterprise-level transaction volumes as your project expands.
By choosing Corefy, you gain the freedom to grow securely and efficiently, while reducing costs on development, compliance, and infrastructure, which open-source gateways often require.
Conclusion
Open-source payment gateways seem attractive – they're free, flexible, and useful for learning. However, the challenges of compliance, security, scalability, and hidden costs make them unsuitable for growing businesses.
For startups experimenting with prototypes, open-source options may serve as a stepping stone. But for companies handling real customer payments, SaaS-based and white-label payment platforms like Corefy are the stronger long-term choice. They provide security, compliance, scalability, and support – critical factors for success in the highly regulated payment industry.
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