Managing payments across various platforms and channels can be time-consuming and challenging. This is where payment orchestration helps. It is an innovative way of transaction management that combines payment gateways, methods, and processors into one platform.
Payment orchestration platforms (POP) can help companies that are continuously searching for practical solutions to navigate online transaction complexities. These platforms optimize payment flows and ensure seamless customer experience.
In this guide, I will share the meaning of payment orchestration, its importance in modern commerce, and how it differs from traditional payment gateways. I’ll explain the mechanics of orchestrated payments, highlight their advantages for businesses, and provide guidance on choosing the appropriate platform provider.
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Payment orchestration integrates front-end and back-end between a website and different payment service providers. As the result, it helps businesses be more agile and scale more rapidly.
By consolidating payment methods and payment service providers, payment orchestration platforms allow everyone selling online to handle its payment service providers from a single web page.
A payment orchestration provider unifies various entities, including user and merchant accounts, payment providers, acquirers, and fraud detection services, to enable seamless transaction initiation, validation, routing, and processing.
A payment orchestration platform can also manage payment flows and processes, including, but not limited to, billing and settlement, reconciliation, payouts, and reporting.
Statistics reveal a significant shift towards payment orchestration. In fact, in 2022, the global payment orchestration platform market size reached $1.13 billion.
1. A customer adds a service or product to their shopping cart and proceeds to checkout.
2. At checkout, the customer selects a payment method and inputs their payment details.
3. The payment gateway encrypts payment card information and transmits it to the acquiring bank through the payment processor.
4. The acquiring bank communicates to verify and authorize the payment with the issuing bank.
5. The acquiring bank is responsible for sending the authorization or failure response code to the merchant and payment gateway. However, payment orchestration platforms have a unique approach to handling failed payments. In such cases, the platform automatically forwards the payment request to another payment processor to reduce the chances of false declines.
6. Finally, if the payment is successful with the second payment processor, the payment is approved.
Payment processing has become increasingly complex and diverse in order to keep up with the constantly changing payment ecosystem. Payment orchestration is designed to help merchants adapt to new payment methods and technologies as they emerge, ensuring they stay competitive and provide the best possible customer experience.
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A payment gateway is a software app that facilitates payment processing. A payment orchestrator allows you to handle many payment methods, currencies, and gateways under one roof.
Think of it this way: a payment gateway is similar to a toll booth, enabling you to collect payment for crossing a particular road. In contrast, a payment orchestrator is similar to a traffic control center that routes traffic and handles multiple toll booths more efficiently.
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Expansion of services into new markets is usually challenging. In addition to regulatory compliance, you have to handle local payment methods and currencies and integrate region-specific providers. A POP simplifies all of this.
This payment system architecture is designed to be flexible and vendor-agnostic, which means it can easily integrate with third-party provider APIs and manage all PSP data within a single layer. This architecture lets you launch new payment options and scale your business faster.
It’s a known fact that many customers who shop online abandon their carts because of payment-related issues. Payment orchestration platforms can solve this problem by optimizing the checkout process.
Enabling embedded checkout options allows customers to stay on the merchant's site. POPs also make it easy for merchants to offer diverse payment options, which reduces the likelihood of cart abandonment due to limited options.
For merchants, POPs provide tailored solutions that streamline payment processes, such as splitting payments and handling refunds.
They also simplify reconciliation by eliminating the need to manage multiple file formats from different providers. With a unified API, merchants can effortlessly manage payments, refunds, billing, and settlements, which enhances operational efficiency.
As POPs simplify the payment process and enhance customer experience, e-commerce businesses can boost online sales. That ultimately leads to increased revenue.
POPs can dynamically route payments. Because of that, e-commerce merchants can set up specific rules and better control payment flows.
For example, companies can set up a rule to automatically direct transactions through channels that provide the most favorable conditions. These conditions can include low-risk payment options for high-risk customers or channels that offer low transaction costs.
Contrary to popular belief, traditional payment systems aren’t cheaper to uphold. When looking at the bigger picture, POPs save you more money. Their modern infrastructure prevents third-party integration expenses from exploding and helps you improve operations, reducing costs. Not to mention the automated routing of transactions to least-cost payment providers.
Use a unified platform which handles transaction processes for various payment providers and methods and enhance your fraud prevention measures, especially when managing 3DS.
This is because these platforms can use Strong Customer Authentication and execute pre- and post-payment authorization checks, which in turn helps reduce the number of chargebacks.
Payment Orchestration's advanced data analysis capabilities can also improve transaction security. Payment reports provide valuable resources for identifying potential security risks. Fraud detection and risk management tools can be integrated to mitigate potential risks and ensure safe transactions.
Payment orchestration platforms simplify payment data analysis by centralizing all payment service providers in one place. This way, businesses can effortlessly compile real-time data reports across multiple PSPs and share them with merchants, fraud detection services, and financial authorities.
Executives such as CEOs, Chief Payment Officers, or Heads of E-commerce in multinational corporations find this aggregated data invaluable for strategic decision-making. They can make informed decisions about future partnerships by comparing key metrics like latency and success rates across different PSPs.
Using these platforms also gives businesses insights into customer behavior and payment patterns. This gives them a competitive edge, enables personalized customer experiences, and streamlines back-office processes like payment failure analysis and reconciliation.
Online retailers can use POPs to gain access to a range of pre-approved payment providers. So, if the retailers change their requirements, they can include other payment methods on their website through a single API connection. This is ideal for merchants who have international customers.
Remember that almost seven in ten consumers abandon their shopping cart if their preferred payment method isn’t listed.
Payment orchestration simplifies the process of integrating and maintaining payment options, reducing the time and engineering resources needed to do so.
Without a payment orchestration platform, an engineer could spend months building and maintaining a single connection, from coding to integrating the new payment partner. However, with a POP, this can be done in just a few clicks.
Magnius provides a state-of-the-art POP that is customizable for banks, payment service providers, and large businesses. It is a software-as-a-service model and enterprise solution that helps clients optimize conversions, expand globally, combat fraud, and significantly reduce IT costs.
With features like intelligent payment routing, multi-currency support, and dynamic 3-D Secure, Magnius provides:
Clients benefit from Amazon cloud hosting, robust fraud prevention tools, and PCI Level 1 and PSD2 compliance, ensuring security and scalability.
Magnius also offers white-label services, including buy and sell rates management, client-specific URLs, merchant invoicing, expert support, and documentation for seamless integration.
Akurateco is an Amsterdam-based company that offers a complete white-label payment service platform to cater to businesses' diverse needs. Their platform provides access to over 150 payment integrations, robust data reporting, and smart routing features, which can help merchants enhance their payment processing efficiency and increase conversion rates by up to 30%.
In addition, the platform utilizes real-time payment analytics to enable users to make informed decisions that improve customer loyalty through a seamless payment experience.
Akurateco's solution includes:
It ensures businesses can streamline operations while maintaining PCI DSS compliance and high service availability.
Nexio is a reputable payment orchestration platform dedicated to simplifying the complicated payment landscape for merchants. With a comprehensive range of services, Nexio allows merchants to expand globally, comply with new regulations, and quickly adapt to strategic changes.
Merchants can leverage Nexio's connectivity through a single integration point to access a neutral network of gateways and processors, avoiding lock-in and ensuring control over their tokens and data. With security being a top priority, Nexio helps merchants keep their sales and customers safe by reducing chargebacks and preventing fraud.
Merchants can increase authorization rates and minimize processing costs by optimizing payments, saving lost sales, and reducing decline rates by up to 30%. Also, Nexio empowers merchants to enhance redundancy, maintain modern payment stacks, and stay adaptable to new technologies and compliances.
With features like 3DS support, virtual terminals, and 24/7 customer support, the Premier Platform by Nexio ensures fast, secure, and reliable payment processing while providing merchants the flexibility and control they need.
Ikajo is a payment orchestration platform that offers over 100 payment connections in 150 currencies through a single integration point. The platform is designed to be simple and functional, providing merchants with various payment options, including credit cards, cryptocurrencies, and popular alternatives like Klarna and PayPal.
With a centralized dashboard, users can easily manage payment methods, prioritize options, and access real-time analytics to make informed decisions. Automated reconciliation and a payment calendar streamline transaction tracking. At the same time, Ikajo's smart routing service helps boost conversion rates by up to 30% by selecting the most favorable terms and rates for payment processing.
Also, Ikajo's cascading tool enhances payment approval rates by up to 20%. The platform offers integration options, along with features like AML/CTF compliance, currency conversion, round-the-clock software and hardware maintenance.
Corefy is a POP that connects merchants with over 650 providers and 400 payment methods in 200 different currencies. This comprehensive platform is designed to help businesses increase their revenue potential. By using Corefy's services, companies can benefit from various features, including routing, cascading, failover, retries, tokenization, anti-fraud protection, abandoned cart recovery, and A/B testing.
Corefy offers integration options such as embedded/iFrame, components, pay-by-link, flash/modal, and self-hosted solutions, providing flexibility to meet diverse business needs. With features like ISO certification, currency conversion, PCI DSS Level 1 compliance, 3DS support, PSD2 and GDPR adherence, and 24/7 software and hardware support, Corefy equips businesses with the tools they need to optimize their payment operations.
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When selecting a POP, consider several factors due to the complexity of payment technology.
In the online world, customers expect a smooth and uninterrupted journey, mainly when checking out. However, different payment processors have different authentication procedures, which can create inconsistencies in the user experience.
A payment orchestration platform helps to overcome this challenge by enforcing rules that apply to multiple processors, ensuring a frictionless checkout experience regardless of the underlying payment method, location, or currency. POPs present users with relevant options without altering the interface, significantly improving the conversion rates.
Payment disruptions can have a major impact on customer experience and sales revenue. However, a reliable Payment Optimization Platform can address this challenge by seamlessly rerouting transactions to alternative processors in case of downtime or issues with the primary provider. This ensures uninterrupted payment processing and enhances reliability, ultimately minimizing the risk of lost sales and maintaining customer satisfaction.
Modern orchestration platforms can provide valuable insights into your entire payment infrastructure. These platforms aggregate and analyze data from multiple processors, presenting it through intuitive visualizations and reports. This holistic view allows businesses to optimize performance and reduce costs effectively. Also, some platforms offer proactive alerts and scheduled reports, which enable timely responses to emerging trends or issues.
Building trust with customers is of utmost importance in online transactions. Security plays a pivotal role in achieving this. A PCI Level 1-compliant vault securely stores sensitive payment data as tokens to meet stringent industry standards.
Organizations can centralize payment information and process payments securely without managing multiple vaults. Additionally, this solution is compatible with various payment service providers, which adds to its versatility and effectiveness in keeping customer data safe.
Are you struggling to manage payments for your growing online business? If so, DepositFix can help. Our comprehensive payment solution is designed to streamline financial operations and drive growth. We offer pricing plans tailored to businesses at different stages of development, and our integration with HubSpot makes it easy to manage your payments.
With DepositFix, you won't have to worry about fragmented payment data, manual spreadsheet work, or reliance on a single payment gateway. Our solution is designed to scale with your business, and it includes features like flexible product grouping, global payment acceptance, and built-in fraud protection to ensure a smooth checkout experience for your customers while maximizing your revenue potential.
If you're ready to take your online business to new heights, request a demo today and see the difference DepositFix can make.
Discover the hidden automation potential in your payment, billing and invoicing workflows. Talk to our experts for a free assessment!
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