82% of fintech companies initially chose best-of-breed vendor solutions, but 64% wish they had never gone down that path. What's behind this dramatic disconnect between strategy and reality?
New research from Totavi, commissioned by Marqeta, examines the gap between what sounds good on paper and what works in practice. We surveyed several scaled fintech companies, and the patterns we found may permanently reshape the way you think about vendor strategy.
It wasn’t a perfectly assembled team of “best” individual solutions that led to the strongest outcomes. Instead, integrated solutions rose to the top, reducing total cost of ownership (TCO), cutting complexity, and delivering superior results—despite the higher upfront cost.
The cost of false promises
The best-of-breed strategy sounds great. You get the flexibility to shop the market and choose the strongest vendor for each function while avoiding vendor lock-in and “keeping your options open.”
But the reality often looks starkly different. Multiple vendors can mean multiple hidden fees, higher integration and maintenance costs, and significant operational strain. As one surveyed executive put it, it can lead to “death by a thousand API calls.”
Rather than getting the best of the best for each solution, many companies end up with redundant capabilities. As one multi-product company reported, rather than one cohesive compliance process, "they were building four...one for each product.”
Not only does this approach create significantly more work and delay development, it also means companies are paying several times over for the same functionality.
The real story, by the numbers
- 91% of companies reported switched processors or vendors at least once as they scaled, citing control, product delays, or outages as reasons for their move.
- 70% reported migrations taking two to three times longer than anticipated, leading directly to delayed product launches and lost revenue opportunities.
- Over 50% of companies reported vendor-related delays directly blocking revenue-generating product launches.
- 100% of respondents emphasized that total cost of ownership extends far beyond transaction fees to include engineering costs, legal risks, and migration complexity.
The reality of “death by a thousand API calls”
Integration overhead compounds over time, with each additional vendor adding complexity as more systems are required to interact. These “taxes” can mean significantly more time spent on operations—training staff on multiple systems, data reconciliation, monitoring, etc.—and less on building the features customers truly want.
Each new vendor represents:
- An additional system to update and maintain
- API usage and monitoring costs that grow with volume
- Potential overlapping vendor fees and redundant spending
And making the switch once you’ve started down the multi-vendor route presents its own challenges. As one neobank executive noted, their team spent years operating with "one hand behind our back" while developing an alternative solution. By the time they realized a shift was necessary, changing from their original vendor had become highly complicated.
Debunking the control paradox
The most counterintuitive finding from our research? Companies that chose multi-vendor strategies to maintain control and flexibility often ended up with less operational agility.
Our report found that 73% of respondents transitioned away from full-stack vendors toward closer-to-metal solutions, seeking greater control over their technical stack. But this perceived increase in control came at the cost of operational complexity, which ultimately limited their flexibility. This pattern highlights why modern comprehensive platforms are different: they provide the control companies seek, without the operational burden of managing multiple specialized vendors.
One neobank learned this the hard way. After deciding to internalize core processing to gain more control, they reported that the move consumed roughly half of their engineering resources for an extended period. This diversion of valuable time and resources came at a significant opportunity cost.
When “flexibility” becomes complexity
The multi-vendor approach may promise flexibility, but it often delivers the exact opposite. 100% of companies surveyed viewed fallback capabilities and modularity as critical for long-term resilience, but few were able to achieve this cleanly in a multi-vendor approach. The operational complexity of maintaining multiple systems often created more challenges than freedoms.
As one neobank put it, they initially had a very modular, in-house plus many vendors approach, and while it gave them flexibility, they eventually confronted the operational strain.
The hidden costs of multi-vendor strategies
As every company in our study recognized, TCO goes far beyond contract pricing. From engineering costs, to legal risk, to operational overhead, there’s much more to consider beyond per-transaction fees.
Integration complexity over time: What starts as straightforward vendor integration becomes ongoing cycles of system updates, edge case handling, and manual processes for workflows that weren’t fully automated.
Scaling surprises: Some providers have cost structures that don't scale favorably. Companies that didn't negotiate scalable pricing models upfront got caught off guard by soaring costs in years 3-5, with per-active-user fees accumulating significantly as user bases expanded.
The comprehensive advantage
The findings of our research strongly support a shift toward comprehensive solutions. A single platform offers cost benefits like volume discounts and streamlined integration, as well as cutting costs that often come with multi-vendor complexity. As one fintech executive noted, they prefer to streamline platforms, because multiple platforms “increase contacts, meetings, infrastructure.”
100% of companies prioritized rapid deployment when initially launching, often foregoing a fuller stack solution to do so. The key insight: 64% later wished they had chosen more comprehensive platforms from day one, as vendor limitations and migrations caused significant delays during critical growth phases.
Moving forward
82% of companies surveyed may have liked the idea of best-of-breed solutions on paper, but a whopping 64% later wished they had delayed launch until their payment infrastructure was built or abstracted their processors from day one.
The companies in our research may have learned some of these lessons the hard way, but you don’t have to. The evidence is clear: comprehensive solutions that can grow with your business are the best way to avoid a costly vendor migration down the line.
Ready to avoid these costly mistakes before they happen? Our comprehensive research reveals the hidden costs of vendor fragmentation and why comprehensive platforms consistently outperform multi-vendor approaches.
Read the full report to discover the strategic advantages that separate market leaders from the companies still managing vendor complexity.