Far from being a fleeting trend, payment orchestration is swiftly becoming a strategic tool for merchants dealing with the complexities of digital payments.
The rise of ecommerce has shifted customer expectations when it comes to the payment process, leaving merchants with the task of needing to offer multiple payment options, all whilst creating streamlined, safe, personalised, and secure checkout experiences. Payment orchestration has quickly become the go-to solution for tackling such pain points by facilitating seamless transactions, boosting success rates, and addressing regional payment preferences.
What is payment orchestration?
Payment orchestration is a strategy that implies working with multiple payments stakeholders to maximise payment conversion in a cost-effective manner. Payment orchestration optimises customer experience, enables businesses to offer region-specific payment methods, increases conversions, and ensures regulatory compliance.
Payment orchestration platforms (POPs), also known as payment orchestration layers, enable merchants to manage payment gateways, processors, acquirers, and other payment service providers (PSPs) via a single integration. Partnering with a payment orchestration provider is particularly useful for businesses that operate on a global scale or that want to offer a wide range of payment options.
The components of payment orchestration
The process of orchestrating payments is quite complex. It includes everything from selecting the right payment gateway, routing transactions based on different considerations, and complying with local regulations to handling fraud and chargebacks, managing currency conversions, and data analytics and reporting. The main components of payment orchestration are:
Payment gateways
Payment orchestration layers usually integrate with multiple payment gateways to ensure that merchants can accept payments through different providers.
Payment routing
Smart routing is a key component of payment orchestration. Orchestration layers use complex flows that take into consideration aspects such as the amount being transferred, the payment method being used, currency, cost/fees, security, speed, and geographical location to route transactions. This ensures optimised acceptance rates and reduced costs for merchants.
Payment method support
Payment orchestration providers enable merchants to present their customers with various payment methods such as credit and debit cards, e-wallets, bank transfers, prepaid cards, mobile payments, vouchers, or cryptocurrency.
Fraud prevention capabilities
Some payments orchestration platforms also provide functionalities that aim to detect and prevent fraud. Many orchestration layers leverage advanced fraud detection technologies like machine learning (ML) and artificial intelligence (AI) to analyse transaction data, identify patterns, and stop fraudulent activity.
Currency conversion tools
For merchants operating in multiple countries, currency conversion tools are a must. Payment orchestration companies equip merchants with conversion tools that help businesses accept payments in several currencies and convert them in the desired currency.
Data analytics and reporting
Data analytics and reporting represent another very important tool for merchants. Having access to such features helps businesses analyse and identify patterns and payment trends – and, consequently, better cater the payment process to the needs of their customers in order to improve conversion rates.
Payment orchestration benefits
Payment orchestration is steadily becoming a must-have for merchants that have to navigate the complexities of digital payments. Some of the most notable benefits of payment orchestration include:
Improved conversion rates
Payment orchestration layers aim to help merchants improve their conversion rates by minimising card abandonment rates. By partnering with a POP, businesses can present their customers with their preferred payment method, and they can leverage smart routing to ensure each payment is processed successfully. Moreover, fraud prevention management can help businesses deter fraudulent transactions, while having access to reports and dashboards enables them to get a better understanding of various transaction stats.
Payment security
Most payment orchestration solutions include features such as encryption and tokenization (be it network tokenization, proprietary tokenization, or both) that protect customer payment data and, consequently, reduce the risk of data breaches and fraud.
Without a POP, merchants need to handle PCI compliance across multiple PSPs, gateways, and acquirers. However, by partnering with a payment orchestrator, businesses can offload part of this responsibility and ensure their payment processing processes are secure and compliant with industry standards.
Furthermore, payment orchestrators feature fraud management capabilities that further minimise risk for merchants.
Enhanced customer experiences
By leveraging a partnership with a POP, merchants can provide customers with a wide range of payment options, all while ensuring that transactions are processed quickly and securely. This can help merchants ensure increased customer loyalty and satisfaction.
