In-House Loyalty System vs SaaS: Why Building Your Own Costs 30x More

You're technical. Maybe you're a developer-turned-business-owner. Maybe you have a technical co-founder. Maybe someone told you: "You should just build your own loyalty system. How hard can it be?"

You're thinking: I could build this myself. Why pay £30/month for something I can code in a weekend?

Here's what you're imagining: a simple database tracking customers and points. A basic admin panel. Maybe integrate with Apple Wallet. Done in a few days, right?

Here's the truth: Building loyalty software is easy. Building reliable, feature-complete, maintainable loyalty software that actually works across iOS and Android while you run a business is extraordinarily expensive in time, money, and opportunity cost.

This isn't about whether you can build it. You probably can. This is about whether you should — and whether the total cost of ownership makes any financial sense for a small business.

This guide explains what building in-house actually entails (spoiler: way more than you think), the hidden costs that accumulate over years, why in-house systems become fragile and burdensome, when building actually makes sense (almost never for SMBs), and what SaaS delivers instead.

By the end, you'll understand why most businesses that start building in-house end up switching to SaaS — and why those who stick with in-house often regret it.

What "Building In-House" Actually Means

Let's be realistic about scope.

What You Think You're Building

The simple version in your head:

• Database to store customers and point balances

• Way for staff to add points at checkout

• Interface for customers to see their balance

• Redemption mechanism

Estimated time: "A weekend, maybe a week"

What You're Actually Building

The real scope:

1. Customer Database & Authentication (Week 1–2)

• Database schema design

• Customer accounts and profiles

• Authentication system (if customers log in)

• Data validation and security

• Privacy compliance (GDPR)

• Password reset flows

• Email verification

2. Points Tracking System (Week 2–3)

• Points accrual logic (spend-based, visit-based, or both)

• Transaction history

• Balance calculations

• Edge cases (refunds, voids, negative balances)

• Audit trails (who added points, when, why)

• Fraud prevention (duplicate scans, manual overrides)

3. Staff Interface (Week 3–4)

• Admin dashboard for viewing customers

• Point addition interface (scan or search)

• Redemption interface

• Transaction history and reporting

• Staff permissions (who can do what)

• Mobile-responsive design (staff use phones/tablets)

4. Customer Interface (Week 4–6)

• Customer-facing app or web portal

• Login and account management

• Balance display and transaction history

• Redemption interface

• Push notification preferences

• Profile updates

5. Apple Wallet Integration (Week 6–8)

• Apple Wallet pass generation

• Pass design and branding

• Pass updating infrastructure

• Push notification certificates and servers

• iOS-specific testing and debugging

• Apple Developer account management

6. Google Wallet Integration (Week 8–10)

• Google Wallet pass generation

• Pass design and branding

• Google Pay API integrati If you've never worked with the Google Pay API before, the Google Wallet loyalty card setup process alone involves merchant verification, service account configuration, and pass class definitions that take most developers 20+ hours to get right.on

• Android-specific testing and debugging

• Google Developer account management

7. Notification System (Week 10–11)

• Push notification infrastructure (APNs for iOS, FCM for Android)

• Campaign creation interface

• Scheduling system

• Message templating

• Delivery tracking

• Opt-out management

8. Analytics & Reporting (Week 11–12)

• Dashboard with key metrics

• Customer segmentation

• Campaign performance tracking

• Revenue attribution

• Export functionality

• Data visualization

9. Infrastructure & DevOps (Ongoing)

• Server setup and configuration

• Database hosting

• SSL certificates

• Backup systems

• Monitoring and alerting

• Load balancing (if you grow)

• Security hardening

10. Testing & QA (Ongoing)

• Unit tests

• Integration tests

• iOS device testing (multiple versions)

• Android device testing (fragmentation hell)

• Bug fixing

• Performance optimization

Total realistic time: 12–16 weeks minimum

And that's assuming:

• You're an experienced full-stack developer

• You work on this full-time

• Nothing goes wrong

• You don't get distracted by running your actual business

The Hidden Costs No One Tells You About

Building is just the start. Here's what accumulates.

Cost 1: Your Time (The Biggest Cost)

Let's do the math:

You're a business owner. Your time is worth at least £50/hour (conservatively, based on what you need to earn to stay afloat).

Development time:

• 12 weeks × 40 hours/week × £50/hour = £24,000

But you're not working full-time on this. You're running a business. So realistically:

• 10 hours/week × 20 weeks to get something working = 200 hours × £50 = £10,000

Opportunity cost:

Those 200 hours could have been spent:

• Acquiring customers (£50–£200 acquisition cost, so 50–200 customers)

• Improving your core product/service

• Marketing and sales

• Actually running your business

You're not saving money by building. You're spending your most valuable resource (time) on something outside your core competency.

Cost 2: Ongoing Maintenance (Forever)

Software doesn't stay working. It degrades.

What breaks regularly:

• iOS updates: Apple releases iOS updates 2–3 times per year. Your wallet passes break. You must update code.

• Android updates: Google updates Android constantly. Compatibility issues arise.

• Certificate renewals: Push notification certificates expire annually. If you forget, notifications stop.

• Server updates: Security patches require updates. Breaking changes happen.

• Dependencies: Libraries you use get deprecated. Must upgrade or find alternatives.

• Database scaling: As customers grow, queries slow down. Must optimize.

Time required:

• 5–10 hours per month minimum (monitoring, fixing, patching)

• 20–40 hours per year for major updates (iOS/Android)

Annual maintenance: 100–160 hours = £5,000–£8,000 per year

This never stops. Year after year after year.

Cost 3: Feature Creep (Scope Always Grows)

What happens after launch:

Month 1:
"Customers want to see progress bars. Need to add visual elements."
Time: 8 hours

Month 2:
"We want to send birthday rewards. Need automated campaigns."
Time: 12 hours

Month 3:
"Staff need better reporting. Current dashboard isn't enough."
Time: 15 hours

Month 4:
"Customers want SMS notifications as backup. Need SMS integration."
Time: 10 hours (plus ongoing SMS Every one of those "quick additions" — progress bars, birthday rewards, better reporting — are standard digital loyalty card features that come built into SaaS platforms from day one. costs)

Month 5:
"We want to track redemption rates better. Need advanced analytics."
Time: 20 hours

Year 1 feature additions: 100+ hours = £5,000+

And customers compare your homemade system to professional SaaS platforms with teams of 10–50 people building features constantly.

You can never keep up.

Cost 4: Technical Debt (Quality Deteriorates)

What happens when you build under pressure:

• You skip proper error handling ("I'll add that later")

• You cut corners on testing ("It works on my phone")

• You don't document code ("I'll remember what this does")

• You hardcode things that should be configurable ("I'll refactor later")

The result: Technical debt accumulates.

3–6 months later:

• Code is messy and hard to modify

• Simple changes take hours because you don't remember how it works

• Bugs multiply because everything is interconnected

• Adding features breaks existing functionality

• You're afraid to touch anything

Refactoring to fix this: 40–80 hours = £2,000–£4,000

Cost 5: Single Point of Failure (You)

What happens when:

• You're sick for a week

• You go on holiday

• You get busy with business crisis

• You want to hire someone and onboard them

With in-house system:

• Only you know how it works

• Only you can fix it

• Only you can add features

• If you're unavailable, system breaks and stays broken

With SaaS:

• Platform runs regardless of your availability

• Support team handles issues

• Updates happen automatically

• Any staff member can use it

Your in-house system creates dependency on you. You can never truly step away.

Cost 6: Distraction From Core Business

Here's the brutal truth:

Every hour you spend maintaining loyalty software is an hour you're not:

• Serving customers

• Developing your product/service

• Marketing your business

• Hiring and training staff

• Improving operations

• Growing revenue

You're effectively becoming a software company (which you're probably not good at) instead of being a café/salon/shop/service business (which you are good at).

Opportunity cost is the killer.

Why In-House Systems Become Fragile

Let's talk about what goes wrong.

Problem 1: The "Works on My Machine" Syndrome

You built it on your MacBook. It works perfectly.

Then:

• Staff use Android tablets → different behavior

• Customer uses old iPhone → crashes

• Another staff member uses Windows laptop → doesn't work at all

Cross-platform testing is brutal.

You need to test on:

• iOS 15, 16, 17, 18 (multiple versions in the wild)

• iPhone 11, 12, 13, 14, 15, 16 This is exactly why wallet-based cards outperform custom loyalty apps — Apple Wallet and Google Wallet handle cross-device compatibility for you, so you're not debugging layout issues on a customer's iPhone 11 at midnight. (different screen sizes)

• Android 10, 11, 12, 13, 14, 15 (massive fragmentation)

• Dozens of Android device manufacturers (Samsung, Google, Xiaomi, OnePlus, etc.)

SaaS platforms spend hundreds of hours on cross-platform testing. You don't have time for this.

Problem 2: The Update Treadmill

September 2024: Apple releases iOS 18.
Your wallet passes break. (This happens every major iOS release.)

You must:

1. Diagnose what changed

2. Update your code

3. Test thoroughly

4. Deploy fix

5. Hope nothing else broke

Time: 15–30 hours minimum.

And you must do this every time Apple or Google makes changes.

SaaS platforms have teams monitoring these updates months in advance and releasing fixes immediately. You're scrambling to keep up alone.

Problem 3: The Security Nightmare

Data breaches are expensive:

• GDPR fines: up to 4% of annual revenue or €20 million

• Customer trust destroyed

• Legal liability

Your responsibilities with in-house system:

• Secure database (encryption at rest and in transit)

• Prevent SQL injection

• Prevent XSS attacks

• Secure API endpoints

• Rate limiting to prevent abuse

• Regular security audits

• Patch vulnerabilities immediately

• Comply with PCI DSS (if storing payment info)

• GDPR compliance (data access requests, deletion, portability)

Do you have expertise in all these areas? No?

Then you're building a system with security holes you don't even know exist.

SaaS platforms employ security experts, undergo audits, maintain compliance certifications, and have insurance for breaches.

You have... yourself.

Problem 4: The Backup Catastrophe

Scenario: Your database gets corrupted. Or your server crashes. Or you accidentally delete production data.

Questions:

• When was your last backup?

• Where is it stored?

• Have you tested restoration?

• Can you recover within minutes or does your business stop for hours/days?

Most in-house systems have terrible backup strategies (if any).

Result: One disaster can destroy all customer data permanently.

SaaS platforms have:

• Automated daily backups

• Redundant storage (multiple locations)

• Disaster recovery tested regularly

• 99.9%+ uptime guarantees

When Building In-House Actually Makes Sense

Let's be fair. There are scenarios where building makes sense.

In-House Makes Sense If:

✓ You're a technology company with a full development team

If you employ 5+ full-time developers who maintain your core product, adding loyalty as an internal tool is viable. You already have infrastructure, expertise, and bandwidth.

✓ You have extremely unique requirements that no SaaS can meet

If your business model is so unusual that off-the-shelf solutions genuinely don't work, custom development may be necessary.

✓ You're at massive scale (10,000+ customers) and costs justify it

At very large scale, building in-house can be more cost-effective than per-customer pricing. For everyone else — single-location cafés, salons, barbershops, and shops — a complete guide to loyalty program software will show you that modern platforms handle 95% of what you'd build, at a fraction of the cost. But this is enterprise territory, not SMB.

✓ Loyalty is your core product (you're building a loyalty platform to sell to others)

If your business IS loyalty software, obviously you build in-house.

Reality check: This describes 0.1% of UK small businesses.

For everyone else — cafés, salons, shops, gyms, clinics — building in-house is a terrible use of resources.

What SaaS Delivers Instead

Now let's understand the alternative.

SaaS Loyalty Platforms: The Complete Package

What you get with platforms like Perkstar:

Immediate deployment:

• Sign up → design card → go live in 30–60 minutes

• No code. No servers. No technical knowledge required.

Proven, reliable infrastructure:

• 99.9%+ uptime

• Automatic backups

• Security best practices

• GDPR compliance built-in

Cross-platform tested:

• Works on all iOS versions

• Works on all Android devices

• Regular testing across devices

Ongoing maintenance:

• Platform handles iOS/Android updates

• No work required from you

• Just keeps working

Continuous feature development:

• Platform adds features regularly

• You get updates automatically

• No development time required

Professional support:

• Email, chat, WhatsApp support

• Same-day response times (UK hours)

• Someone to call when things break

Cost predictability:

• £15–£60/month flat fee

• No hidden costs

• No time investment

• No opportunity cost

Total time investment: 1 hour (setup).
Total cost: £360–£720/year.

The Economics: In-House vs SaaS

Let's compare 3-year total cost of ownership. Before comparing these numbers to any SaaS option, it's worth understanding how loyalty card software pricing actually works — most platforms use flat monthly fees, but some bury costs in per-transaction charges, per-customer fees, or mandatory add-ons that inflate the real price.

In-House System:

Year 1:

• Development: 200 hours × £50 = £10,000

• Maintenance: 100 hours × £50 = £5,000

• Server/hosting: £500

• Apple Developer account: £79

• Google Play account: £25

• Year 1 total: £15,604

Year 2:

• Maintenance: 120 hours × £50 = £6,000 (more time as complexity grows)

• Feature additions: 60 hours × £50 = £3,000

• Server/hosting: £500

• Renewal fees: £79

• Year 2 total: £9,579

Year 3:

• Maintenance: 120 hours × £50 = £6,000

• Feature additions: 40 hours × £50 = £2,000

• Server/hosting: £500

• Refactoring tech debt: 40 hours × £50 = £2,000

• Renewal fees: £79

• Year 3 total: £10,579

3-year total: £35,762

SaaS Platform (Perkstar):

Year 1:

• Setup: 1 hour × £50 = £50

• Subscription: £30/month × 12 = £360

• Year 1 total: £410

Year 2:

• Subscription: £360

• Year 2 total: £360

Year 3:

• Subscription: £360

• Year 3 total: £360

3-year total: £1,130

Savings with SaaS: £34,632 over 3 years

That's not marginal. That's 30x difference.

Real-World Example: A Developer-Owned Café in Bristol

Let's see this play out.

The business: Specialty coffee shop in Bristol. Owner is a former software developer who left tech to open café.

Month 1: "I Can Build This"

Owner's thinking:

"I see these SaaS platforms charging £30/month. I'm a developer. I can build this myself in a couple weekends and save the ongoing cost. Plus, I can customize it exactly how I want."

Week 1–2 (20 hours):

• Sets up database (PostgreSQL)

• Builds basic customer tracking

• Creates simple admin panel

Week 3–4 (25 hours):

• Adds point accrual logic

• Builds redemption interface

• Tests with a few customers

Status: Working prototype. Owner feels validated. "See? It wasn't that hard."

Month 2: "Wallet Integration Is Harder Than I Thought"

Week 5–8 (40 hours):

• Attempts Apple Wallet integration

• Realizes this requires:

  • Apple Developer account setup (£79)

  • Understanding PassKit framework

  • Certificate management

  • Pass signing

  • Web server for updating passes

• Gets wallet passes working... mostly

• Doesn't work on some iOS versions

Status: Frustrated but committed. "I'm 70% there."

Month 3: "Google Wallet Is Even Worse"

Week 9–12 (45 hours):

• Attempts Google Wallet integration

• Different API, different requirements

• Android fragmentation is brutal

• Gets it working on some devices

• Fails on others

Status: "This is taking way longer than expected."

Month 4: "Maintenance Is Killing Me"

Ongoing issues:

• iOS 18 releases → wallet passes break → 15 hours to fix

• Customer reports bug → 6 hours to diagnose and patch

• Server runs out of disk space → 3 hours to resolve

• Certificate expires → notifications stop → 4 hours to fix

• Staff want better reporting → 12 hours to build

Total: 40 hours in one month on maintenance

Owner's realization:

"I'm spending 10 hours per week maintaining this thing when I should be running my café. I haven't developed a new menu item in 2 months because I'm too busy fixing bugs."

Month 5: The Turning Point

Owner does the math:

• Total time invested: 170 hours

• Value of time: 170 × £50 = £8,500

• Ongoing time: 10 hours/week = £500/week = £2,000/month

Owner compares to SaaS:

• Perkstar: £30/month

• Would have saved: 170 hours (£8,500) + 4 months × £2,000 = £16,500

Owner switches to Perkstar:

• Signs up

• Migrates customer data (export from database, import to Perkstar)

• Generates new wallet cards

• Notifies customers to re-add cards

• Takes 6 hours total

Month 6 onward:

• Owner spends zero time on loyalty software

• Perkstar handles everything

• iOS updates? Handled.

• Android compatibility? Handled.

• New features? Automatically added.

• Support needed? Same-day response.

Owner's reflection:

"I wasted 5 months and £16,500 trying to save £150 (£30 × 5 months). I should have just used Perkstar from day one. My ego told me I could build it. My business needed me to focus on running a café, not becoming a software company. Switching was the best decision I made all year."

Modern Take: Why "Just Build It" Advice Is Outdated

Here's why this advice is so common (and so wrong).

The Myth: "Building Is Easy"

Where this comes from:

• Developers build simple CRUD apps quickly

• Early prototypes look impressive

• 80% of functionality takes 20% of time

What they miss:

• The last 20% of functionality takes 80% of time

• Production-ready is 10x harder than prototype

• Maintenance is infinite

Result: People underestimate scope by 5–10x.

The Modern Reality: SaaS Matured

2010–2015:

• SaaS loyalty was expensive (£200+/month)

• Limited features

• Poor support

• Building in-house was sometimes justified

2026:

• SaaS loyalty is affordable (£15–£60/month)

• Feature-rich (8 card types, automation, analytics)

• Excellent support

• Building in-house makes zero financial sense for SMBs

Technology democratized. What cost £50,000 custom development in 2015 now costs £360/year SaaS subscription.

The Opportunity Cost Principle

The question isn't: "Can I build this?"

The question is: "Is building this the best use of my limited time and capital?"

For SMBs, the answer is almost always no.

Your time is better spent:

• Acquiring customers (direct revenue imp A solo operator can launch a loyalty program in under an hour and get back to revenue-generating work the same morning — try doing that with a custom-built system.act)

• Improving your product/service (competitive advantage)

• Training staff (operational excellence)

• Marketing (business growth)

Not building software outside your core competency.

Final Thoughts: Be a Business, Not a Software Company

You can probably build loyalty software. But should you?

In-house makes sense when:

• You're a technology company with dev teams

• You have truly unique requirements

• You're operating at massive scale

• Loyalty software IS your product

SaaS makes sense when:

• You're a small business (under 50 employees)

• Your core business is not software

• You value your time

• You want reliability and support

• You need to launch quickly

• You want predictable costs

For 99% of UK small businesses, SaaS is the obvious choice.

Stop trying to save £30/month by spending hundreds of hours building something that will break constantly and distract you from your actual business.

Start your free 14-day trial with Perkstar — no credit card required. See how much faster, cheaper, and more reliable a professional platform is compared to building in-house.

Your business needs you focused on what you do best. Let specialists handle loyalty software.