To compete in a rapidly evolving ecommerce market, payment service providers (PSPs) and their merchants need to find new ways to be more cost-effective, more agile, and better able to adapt to consumer tastes and trends than ever before. This presents payment players with a challenge.
PSPs need to provide an almost infinitely configurable set of payment services, but they need to do so in a way that is manageable and cost effective for them — one that avoids the introduction of unmanageable technical and cost overheads. The answer is service orchestration.
Service orchestration takes multiple payment products and services, from different providers, and integrates them through one interface. PSPs can then easily deploy and scale all the products and services they need, while eliminating complicated RFP processes and the dependence on a single provider.
For instance, to create the optimum payment experience for a particular merchant or category of merchants, the PSP might combine fraud detection, compliance, reconciliation, currency conversion, transaction routing, and analytics — all from different providers.
Rather than being locked into a single provider for the whole range of services, the PSP can choose a different provider for each. This increases the range of services a PSP or merchant can access through a single integration, which translates into reduced complexity, in a world of fragmented payments.
This modular approach to payments delivers precisely the adaptability that PSPs and merchants need if they are going to keep up with — and get ahead of — consumer trends and preferences that are changing faster than ever.
Lack of agility means that adding new payment options is slow and challenging, leading to decreased competitiveness and missed revenue
Actionable and insightful data are difficult to attain if the transactional data is spread over multiple PSPs and gateways
Fraud is harder to detect due to disparate platforms and formats
The risk of payment outages is increased by not controlling the transaction flows and depending on one provider
Savings are missed by not routing to providers that offer favourable pricing
Revenue and customer satisfaction is negatively impacted by not allowing for failed transactions to be re-routed to the next acquirer
The costs of maintenance, IT, integrations, and development of new features are much higher across disparate solutions
Reconciliation of multiple diverse file formats from different acquirers at different times, including refunds and chargebacks, contribute to financial leakage
New payment methods and value-added services require a perpetual investment in the development roadmap
Development teams are used to create and manage different payment integrations versus building out differentiators
Elimination of the traditional RFP process
Lower than average acceptance rates, high chargebacks and fraudulent transactions are just some of the issues payment orchestration addresses.
To sum up, service orchestration is the answer that PSPs and merchants have been waiting for. It allows them to develop and maintain robust payment platforms. And it gives them the ability to design payment services that will help merchants win over and hold on to new customer segments. As the ecommerce market evolves and accelerates towards a new normal, those players that embrace the potential of service orchestration have a head start over their competitors.
Interested in learning more about service orchestration? Please get in touch to speak to an expert. In the meantime, take a look at our recent on-demand webinar entitled ‘Accelerating Growth with Service Orchestration’.
PPRO is a fintech company that provides digital payments infrastructure to businesses and banks so that they can scale their checkout, acquiring, and risk services through one connection. Payment platforms, acquirers, and merchants that plug into PPRO’s infrastructure are able to access payment methods, fraud screening tools, and other essential products from multiple providers.
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