87% of consumers are frustrated by online payments. Merchants who can get payments right by offering the right mix of payment methods and a seamless experience put themselves at a significant advantage.
But the complexity of modern online transactions — with multiple payment methods, currencies, and payment gateways — means that achieving smooth payments is no simple task. As payments get more complex, it’s trickier and trickier for merchants to keep up with the labyrinth of gateway integrations, fraud protection systems, and international payment regulations.
Merchants need an efficient way to manage every step of the payment process. Enter payment orchestration.
Payment orchestration is a payment technology that helps merchants handle various payment components easily. Payment orchestration platforms guide merchants through the payments process, streamlining and optimising everything along the way. More than just facilitating transactions, payment orchestration enhances every stage of the payment journey, improving the customer experience and, ultimately, conversion rates.
In this article, we’ll help you understand more about what payment orchestration is and how incorporating orchestration into your payment stack can help your ecommerce business.
What is payment orchestration?
Payment orchestration connects multiple parts of the payment process under one umbrella. Merchants can use a single platform on the front end to manage payments, and the orchestration platform coordinates various processes and components on the back end.
Think of it as a conductor guiding each instrument in the orchestra to work together. Payment orchestration platforms:
Handle payment transactions from initiation to settlement
Direct transactions through different payment gateways and payment methods based on factors such as the customer’s location or the size of the transaction
Identify and respond to errors that arise during online payment processing, such as by retrying failed payments via a different gateway
Securely manage customer information and adhere to payment regulations, both local and international
Payment orchestration vs payment gateways and payment service providers
Payment service providers (PSPs) perform payment-related services and often include a payment gateway in their offerings. They usually give merchants a merchant account and other functionality like fraud-prevention tools such as address verification services.
Payment gateways process payments and transfer information between the payment portal, the customer’s issuing bank, and the acquiring bank. Most merchants need multiple gateways to handle different payment methods and regions, and larger ecommerce companies will even use multiple payment service providers, especially as they move into new markets and territories.
Payment orchestration platforms unify, manage, and optimise multiple payment service providers and payment gateways under one platform.
Potential benefits of payment orchestration for ecommerce merchants
Payment orchestration technology makes life easier for merchants and their customers if implemented well. Here’s why:
Higher acceptance rates
Payment orchestration improves acceptance rates by intelligently managing transactions, providing backup payment gateways, and retrying payments if they fail.
Sometimes, payments fail because of an error on the customer side — for example, if they have insufficient funds in their account to make the purchase. However, usually, payments fail because of a problem somewhere in the complex chain of interactions that make up the payment process.
Although acceptance rates vary by payment method, payment orchestration is useful for optimising the acceptance rate for each method. Payment orchestration platforms use transaction routing capabilities to dynamically select the best gateway for a transaction. Smart routing helps payments pass through the gateway that’s most likely to accept them, thus increasing acceptance. Gateway selection is based on factors like:
Historical performance of the payment gateway
Payment orchestration platforms also have smart retry mechanisms. They automatically redirect failed transactions through alternative gateways and at optimal times to boost the probability of approval. Plus, they ensure backup providers are available in case any of the primary processors suffer downtime.
A best-in-class global checkout experience
Payment orchestration not only increases acceptance but also improves the customer payment experience. It allows merchants to cater to consumer’s preferred payment methods.
Merchants are also able to be more flexible with the payments they accept on the checkout page. For instance, payment orchestration helps support cross-border payments because it means merchants can:
Access optimal payment gateways for different regions
Adhere to local and international regulatory requirements (such as PCI compliance)
Process payments in different currencies
Orchestration platforms also make it easier for merchants to offer a variety of payment methods. Merchants get data insights so they can test out new payment methods, like open banking payments, to stay innovative and match growing consumer adoption of alternative methods.
Efficient and compliant operations
Payment orchestration makes operations more streamlined and helps merchants stay compliant with complex payment and data security regulations.
With a payment orchestration layer, merchants have a single integration point — one API and interface. Simplifying operations in this way helps with scalability. Merchants can add alternative payment methods and new markets without increasing operational complexity. Organisations also need to assign fewer dedicated resources for each payment method, and smart payment routing increases acceptance rates, which both help to boost revenue.
A centralised place for all payments makes it easier to follow payment security standards (like PCI DSS). Merchants can make sure they’re adhering to both local and international rules without having to manage each payment method or gateway separately.
Additionally, the payment data merchants get from unifying their payments helps them better analyse what’s happening in their business and consumer payment habits. They can use data insights from an orchestration platform to make smarter business decisions.
For ecommerce brands, payment security is paramount. Payment orchestration platforms deploy a blend of technologies to shield against potential fraud.
In addition to using centralised vaults for secure data storage, leading payment orchestration platforms use network tokenisation which enhances the security of digital transactions. Network tokenisation replaces sensitive data with unique symbols, retaining the essential information without exposing it to potential threats. This not only boosts the security framework but also simplifies the payment process, facilitating a smoother, more efficient customer experience.
Does my business need a payment orchestration platform?
Determining whether your business needs a payment orchestration platform hinges on various factors, notably the scale and diversity of your operations. The broader your market reach and the more payment methods and gateways you employ, the more likely a payment orchestration platform will be beneficial.
As your business grows, your need for payment orchestration grows. Expansion means that managing multiple payment gateways, various methods, and navigating through different market regulations becomes increasingly complex. A payment orchestration platform simplifies this complexity, bringing various payment components under a single, manageable umbrella.
Examples of payment orchestration platforms
Here are some examples of payment orchestration platforms that are helping merchants around the world optimise payments.
Nuvei, a payment orchestration platform from Canada, aids brands like New Balance and Virgin Atlantic in accepting a broad spectrum of payment options and currencies. The payment solution also works to optimise payments and boost acceptance through the smart routing of transactions.
Airwallex from Australia provides a payment processor and payment orchestration platform that enables companies to simplify and scale global payments while maintaining compliance. The platform acts as a unified solution for managing international transactions with ease.
Africa is experiencing a payment revolution. There are more and more digital payments happening, but the payment systems landscape is fragmented. Hundreds of different providers, tens of different currencies, and varying customer payment preferences make life tricky for merchants.
Revio is a start-up from South Africa, offering a payment orchestration platform that seeks to simplify the payment ecosystem for merchants and help them meet customer needs.
Where do open banking payments fit into payment orchestration?
Open banking is a way of giving regulated companies, secure, limited access to your bank account, with your permission. One key element of open banking is that businesses can use it to collect online payments from customers quickly and securely. Customers pay straight from their bank account, authenticating the payment with their face ID or fingerprint. There's no need to type in your card details or log into your bank account.
Open banking payments can slot seamlessly into orchestration platforms but they don’t rely on payment orchestration to work.
TrueLayer partners with orchestration platforms like Nuevi and Airwallex, enabling them to offer open banking infrastructure to their customers. Learn more about how open banking can revolutionise ecommerce payments.