Simplifying the Complex: Harnessing the Power of Payment Orchestration

Payment orchestration is about to have its moment.

That’s right, the next decade of payments innovation is here and payment orchestration is leading the way.

Let’s backtrack a bit here to understand what’s driving this growth.

Payment companies have reached a tipping point where digital acceleration has become more of a state of mind than just another activity to complete. COVID-19 has played its part in speeding up the adoption of payment technologies for several years, ensuring that most of these changes are here for the long haul.

E-commerce, on the other hand, is barreling at full tilt — with online sales in the U.S. growing by 14.2% in 2021.

With all this in the backdrop and the number of online transactions on a meteoric rise, it has become more critical than ever to provide remarkable customer experiences while collecting payments. Though there may be many ways to go about this, from my experience — one area that you cannot afford to overlook is the payments flow.

Designing a payments stack that will ensure that payments are accepted seamlessly and securely, without disrupting the customer experience, has become the need of the hour. This is where payment orchestration steps into the picture.

There’s a lot that goes beneath the surface of accepting digital payments. Right from checking a payment for fraud, authorizing and accepting it, to notifying the customer of a successful payment (not to mention, achieving all this in a matter of seconds) and retaining the card details for future purchases — payment orchestration layers have become an indispensable consideration for merchants that are looking to provide gratifying payments experiences.

So why is there a need to orchestrate payments?

Before we get to the need for payment orchestration, let’s understand what it is all about.

At the very essence of it, payment orchestration is the process of making all the components of a payments technology stack work better together. It is the simplified process of integrating and managing multiple Payment Service Providers (PSPs), acquirers, and banks on a single, unified layer, thereby enabling the end-to-end management and automation of payments processing.

Now moving to the rising need for the payment orchestration layer — the world of payments is only getting more complex to navigate for merchants, marketplaces, and businesses in general. When we take the case of merchants alone — they are trying to keep pace with expanding complexities of managing payments across geographies and channels. Within a single geography itself, customers have varying payment method preferences. In parallel, payment systems are now increasingly shifting to the cloud, opening up to plug-and-play ecosystems and APIs. As a result of all this, payment processing is a lot more complicated, especially when operating in multiple markets.

The payment orchestration layer is a much-needed solution, helping merchants deploy best-in-class solutions throughout the entire payments flow and improving the customer journey at every touchpoint. This explains why payment orchestration platforms have now come to be the most preferred B2B solutions for E-commerce merchants.

Source: Finextra

Payment orchestration: A high ROI proposition for merchants

Today, merchants are looking to adapt their payment infrastructure to embrace growth and deliver robust customer experiences in an ever-changing digital landscape.

Over the last decade, there has been a rapidly increasing shift to full-stack, collecting PSPs, with the likes of Stripe and Adyen taking over the market. While they became the prevailing model of merchant payment services, these players also popularized the concept of a ‘one-stop-shop’.That said, multinational enterprise merchants struggle to keep up with geographic localization, adhere to compliance, system integration, and an intricate combination of multiple PSPs, among many other ordeals.

Payment orchestration not only reduces the complexities of multiple PSPs but also enables the seamless integration of Value-Added Service (VAS) providers.

With features like embedded checkout and biometric validation, payment orchestration platforms simplify payment processing and remove the many hurdles that customers would otherwise encounter before completing a transaction.

By allowing customers to pay the way they prefer, payment orchestration meets customer expectations and maximizes conversions. Additionally, by connecting to multiple PSPs/acquirers, payment orchestration platforms also reduce the pre-payment costs for merchants by enabling dynamic failover routing. With lower costs incurred and higher conversion rates, payment orchestration is bringing in more ROIs for merchants.

Overall payment orchestration takes the load off the merchants, introducing greater flexibility, speed, connectivity, and enabling seamless management of transactions.

Payment orchestration is future-proofed

While payment orchestration has been dominating the online retail space, the trend is expected to be a hit with in-store sales in the coming months.

More importantly, payment orchestration prepares businesses to gear up for what the payments landscape might present in the future, in other words, become a future-ready organization. Payment orchestration allows merchants to adapt easily to the standards that customers demand and build a payments stack that is ready for the future.

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