As payment processing shifts from a utility to a business driver, so has the modern approach to payment tech stack development. The benefits of a robust payment stack are largely realised by transitioning from a single payment service provider (PSP) to a multiprocessor stack.
Building these multilayered stacks is a dynamic, iterative process. Fine-tuning payment systems depends on resources, shifting customer preferences, and costs. As businesses scale and their payment needs grow, their payment capabilities mature.
Many businesses invest heavily in payment infrastructure but often lack a clear long-term strategy to maximise ROI. This is where the payment maturity model (PMM) comes in.
The PMM is a framework based on best practices for scaling payment systems. It helps businesses think beyond immediate needs and plan for long-term success and flexibility. For early-stage businesses focused on growth, this may mean researching and integrating multiple payment processors. For established brands, it involves optimising for profitability and customer retention. The PMM helps merchants focus on their next stage of growth and align payment strategies with long-term goals.
The PMM outlines four stages of growth as merchants evolve from startups to mature enterprises. While it provides a phased blueprint, payment maturation isn’t always a fixed process. Merchants may have payment capabilities across multiple stages. For example, a specific payment tool might be crucial for one business early on, but irrelevant for others. This exercise helps identify the current stage of your business and where it’s headed.
In stage one of the PMM, payment processing is a basic necessity and sometimes considered a cost centre. Businesses in this stage rely on a single PSP integration to meet their minimum payment acceptance requirements. Think of your local coffee shop or favourite pizza spot with a tablet or basic order-online site.
With growth in processing volume comes the realisation that additional payment features are crucial for retaining customers and growing profits. During stage two, merchants start to understand the benefits of owning their own payment data. PCI compliance becomes relatively more complex, and basis point savings become more significant. Even if there is no redundancy, many will also integrate with an additional payment provider to improve reliability and customer experience.
Businesses in stage three scale significantly and adopt a multi-PSP approach to optimise cost, performance, and cross-border support. Payment tech stacks become more modular, with features like layered gateway routing, diverse payment methods, and cardholder lifecycle management. Unified reporting across providers often marks this stage.
While improving customer experience and payment monetisation, stage three adds complexity. DIY builds may seem simple at first, but maintaining additional integrations can slow development as payment needs grow. This is a key consideration for global businesses deciding whether to manage payments in-house or work with an orchestrator.
In the final stage, connectivity remains important, but the focus shifts to operational needs. Features like custom reporting, dashboards, ERP integrations, and settlement file reconciliation become critical – priorities that early-stage companies wouldn’t consider. These efficiencies improve the bottom line and streamline workflows across the organisation.
At this stage, mature businesses fully realise the value of a robust payment orchestration platform. While the IXOPAY platform adds value in earlier stages, it is designed for large global players. When done right, firms at this level synchronise payment processing across multiple PSPs, maintain full data ownership, and gain comprehensive reporting across regions and departments.
Payment acceptance has become a core business function that receives constant attention from many of today’s merchants. Over half of businesses now embrace payment modernisation and are taking frequent steps to update their infrastructure.
What’s motivating businesses to continuously optimise their payment tech stack, however? Several business drivers propel merchants along the PMM’s growth trajectory, including lower costs, better data ownership, and global processing capabilities.
A recent survey revealed that 56% of merchants rank payment costs as a top challenge. That’s why cost-saving efforts and technical enhancements are crucial measures of payment maturity. As businesses advance, they can negotiate better terms, implement features that improve authorisation rates, and route for the lowest costs.
Early on, businesses are often tied to a single vendor, unable to access or migrate tokenized customer data. By adopting universal tokenization protocols and payment orchestration platforms, mature merchants take control of their data – an essential function for improving customer experience and reducing fraud.
At least half of merchants operate internationally, and success in global markets requires a multiprocessor system that accommodates regional preferences and regulations. Companies with more mature payment infrastructures can enter new markets faster, with less friction and greater customer satisfaction.
As payments become integral to ecommerce strategy, the PMM offers a practical blueprint for success today and in the future. By lowering costs, improving data analytics, and expanding global reach, businesses can unlock new revenue streams and deliver exceptional customer experiences.
Brady Harris is a seasoned fintech executive with over 20 years of experience leading high-growth financial technology and SaaS companies. As CEO of IXOPAY, he is dedicated to advancing global payment solutions. During his tenure at Dwolla and Payscape, he oversaw significant increases in payment volumes and user engagement and fostered cultures that prioritise agility and high performance. Additionally, his expertise in mergers, acquisitions, and scaling companies is key as IXOPAY positions itself as the one-stop payment industry solution. Harris's commitment is not only to enhance enterprise value but also to empower his teams and clients in the evolving digital payments landscape.
IXOPAY is a provider of enterprise-grade payment orchestration, enabling businesses to simplify, secure, and scale their payment systems. In 2024, IXOPAY orchestrated over USD 40 billion in transactions for customers from over 30 countries. With a fully integrated platform, tokenization, and flexible payment optimisation modules, IXOPAY enables enterprises to manage payments seamlessly across multiple providers. Learn more at www.ixopay.com.
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