Interview

The role of payment orchestration platforms in optimising cross-border payments globally

Tuesday 27 February 2024 07:35 CET | Editor: Raluca Ochiana | Interview

Adam Vissing, VP Sales & Business Development at IXOPAY, discusses the role of payment orchestration platforms in optimising cross-border payments globally.

 

What courses of action are open to businesses for an effective collaboration with local PSPs and acquirers to optimise authorisation rates in different regions?

Local acquirers will often achieve higher authorisation rates for lower fees, making it sensible for merchants to search them out. Many PSPs have acquiring partners in multiple countries, which can simplify the search. Getting advice from experts familiar with the local payments landscape is a good first step. IXOPAY’s in-house experts advise our clients on the peculiarities of specific markets – what payment methods are preferred, which PSPs offer them – and suggest potential partners who can cover these requirements.

What are the best practices for identifying and integrating country-specific alternative payment methods (APMs) to meet local customer expectations, and how can businesses address the obstacles associated with serving markets with low credit card adoption rates and unbanked populations?

Market research is the first step to understanding local expectations. Consumers expect their preferred payment method to be available, and, in the case of the unbanked, a payment method not tied to a bank account. The target audience is important – merchants selling luxury goods are unlikely to target unbanked populations, whereas merchants selling everyday goods need to be inclusive.

Payment methods for the unbanked differ by region. In Latin America, voucher payments are king. Upon completing an online purchase, the consumer is issued a code (bar code, QR code, etc.) used to settle the amount in cash at participating stores, post offices, etc. In Africa, mobile money rules the roost. These regions are home to many different providers, often only operating in a few countries. Again, there are PSPs specialising in these markets who cover multiple payment methods in multiple countries.

However, APMs are not static, as consumer preferences and expectations change. The ability to quickly pivot to new APMs gives the first-mover advantage. Integrating a new payment method is not always a trivial undertaking, but payment orchestration helps overcome this challenge with a single API for all providers.

How can businesses maintain real-time visibility and control over transactions – even when working with diverse service providers and spanning various geographical areas?

A payment orchestration platform like IXOPAY provides a single hub for managing and monitoring all payments. Transaction, settlement, and reconciliation data from all providers is collated in the platform, where it can be analysed and monitored in real time.

Merchants can easily view KPIs like the number of declined card transactions across all providers, or total transaction volume over the past week. Given that each PSP uses its own proprietary API and error codes, with different levels of data granularity, consolidating this information can otherwise be challenging and expensive. IXOPAY translates all data into a uniform format, allowing for side-by-side comparisons and analyses over multiple providers. Comparing PSPs’ performance side-by-side provides insights into which of them perform well in certain scenarios, allowing merchants to optimise their payments strategy and routing. 

Data can be exported to reports or external systems, such as CRM and ERP solutions. As the data has already been translated into a uniform format, exports are vastly simplified. The same configuration can be used for all providers, allowing for a one-time setup. 

What are the challenges associated with maintaining such a setup in-house, given that each provider uses its own proprietary API? 

Developers are expensive; in-house development has high-cost overheads. Furthermore, experience matters to delivery times, and experience takes time to acquire. There is also the opportunity cost to consider – if it takes three to six months to integrate a provider, the merchant misses out on potential sales over that time. With a payment orchestration platform, the time-to-market is much shorter. 

Furthermore, each integration needs to be maintained. The more APIs you are dealing with, the more frequent these changes are. A single API is the most efficient approach – and at the heart of payment orchestration. It’s a one-time integration that insulates merchants from changes to individual APIs, with the platform handling API maintenance. Changes at individual providers generally require no changes to the merchant’s integration. 

While a payment orchestration platform’s API is also subject to change, these changes are far less frequent, and payment orchestrators actively seek to minimise or avoid breaking changes. From the merchant’s point of view, a payment orchestration platform offers a single API that is far more stable, eliminating the need for recurring maintenance projects. 

What strategies can businesses employ to handle settlement and reconciliation processes when dealing with diverse data formats from different providers? 

As with data analysis and API integrations, consolidation is the key benefit of payment orchestration. Merchants no longer need to deal with multiple formats with differing levels of granularity. Reports and data exports are defined just once, making it easy to share reports and export data to other systems. 

Identifying discrepancies between the data from providers and that stored in the platform is automated – IXOPAY automatically flags any discrepancies for review. This results in significant time savings. Moreover, even if the format used by a PSP changes, the format used by the payment orchestration platform is unaffected, insulating merchants from these changes and ensuring an overall better customer experience.

This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2023–2024, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally. 

About Adam Vissing

As VP Sales and Business Development for the leading payment orchestration platform IXOPAY, Adam supports global clients in designing and implementing scalable payment infrastructures.

 

 

 

About IXOPAY

IXOPAY is a payment orchestration SaaS that enables independent and scalable payment processing for enterprise merchants across all industries, in a PCI-DSS certified environment. The extensible architecture provides secure and intelligent transaction routing, risk management, automated reconciliation and settlement, and plugin-based integration of acquirers, PSPs, and APMs.


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Keywords: cross-border payments, ecommerce, merchants, PSP, Acquirer, payment methods, marketplace, unbanked, luxury goods, payments orchestration, ERP, API, customer experience
Categories: Payments & Commerce
Companies: Ixopay
Countries: World
This article is part of category

Payments & Commerce

Ixopay

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