The use of payment orchestration is rapidly spreading across the online retail sector. But there will be a range of reactions, as there are with every innovation that shakes up the status quo. Even the process of coordinating payments is complex. While many online retailers have welcomed this new technology with open arms, others remain wary because of the difficulties they may encounter. Payment orchestration has several potential downsides, but the upsides are substantial.
In order to help you, the merchant, pick and implement the best solutions, this article will define payment orchestration and discuss its advantages and disadvantages.
Payment Orchestration: What Is It?
In order to maintain the smoothest possible transaction flow, payment orchestration is a fintech solution that automates and streamlines payment processing for e-commerce enterprises. A single platform with several payment methods and gateways allows businesses to accept credit cards, debit cards, e-wallets, and wire transfers. This simplifies the checkout process for merchants and customers by minimizing the need for multiple connections.
To facilitate all three phases of the payment processing lifecycle—authorization, clearing, and settlement—this fintech solution makes use of a payments orchestration layer (POL). Having a centralized hub for managing all of your PSPs is a huge time saver. By streamlining transactions and adhering to a dynamic decision-making strategy, POLs can speed up the implementation of PSPs.
Advantages Of Using A Payment Orchestrator
As was previously noted, payment orchestrators provide several advantages for online retailers. Some examples are:
1. Fewer payments failed as a result
A transaction going wrong may have a major effect on your revenue and conversion rates. One in five 3D secure (3DS) transactions is declined, according to research from Visa and Mastercard. Customers are usually to blame for payment failures such as inadequate cash, incorrect card information, and so on, but technological faults and a lack of backups or choices in the payment processing infrastructure also play a role. Using a payment orchestrator or other payment processing platform may help reduce these problems by smart routing payments.
2. Regional adaptability
Local payment service providers (PSPs) may help keep transaction fees to a minimum, although they may not be accessible in all nations. Even ‘global’ payment processors, service providers, and acquirers may let you down. This might wind up restricting your clientele to a small region, which would cut into your profits.
Through the use of payment orchestration platforms, businesses may easily and affordably connect with a wide range of international payment providers. In the event of problems with the PSP, their availability in the area, authorization or approval rates, etc., dynamic payment routing allows online retailers to switch providers and regain control of payment flows.
3. Multiple payment options are available
Let’s say you own an online store and some of your customers choose to use alternative payment methods like mobile wallets or a “buy now, pay later” (BNPL) option. In that situation, you won’t have to worry about complex integrations to bring these features to your website. In addition, several payment orchestrator solutions connect online merchants with PSPs that have already been authorized, streamlining the approval process.
Is your business prepared to transform its payment processes by making use of payment orchestrators? If you need assistance navigating the complexity of payment orchestrators and realizing their full potential for your organization, Akurateco’s highly skilled engineers are here to help.