A better consumer experience starts with a better merchant experience. As the payment experience is an important part of a merchant’s success, how are the technology players adapting to the merchants’ demands?
Convenience is at the top of merchants’ minds, no matter where they are in the world. This is especially true when managing complexities with different geographies, government regulations, and payments. Merchants are seeking that single point service to handle increasing demands for localisation, smarter routing, cost reduction, more security, and higher efficiency to accept payments at top volume and speed.
With the advent of open APIs, industry players have begun to lean on Payment Orchestration Platforms (POPs) for ‘one to many’ payment orchestration solutions. This helps merchants connect directly to various payment providers, rather than having to connect directly to multiple payment methods. Merchants all around the world also turn to orchestration platforms to level up omni-channel experiences, smart routing, customer loyalty and mainly, to keep fraud in control.
POPs improve reach through single point connectivity, data access, and security. Orchestrator platforms can deal with many pain points at once by centralising their payment partners and capabilities into a single platform and potentially across all their channels. Many paytechs have specialised to support these critical needs from merchants however they often still solve only a part of the problem. BPC focuses on bridging that gap so merchants can take full control over their payment strategy in any country, currency, and jurisdiction.
Let’s take a look behind the new façade of ‘dynamic routing’, ‘smart transaction routing’, and ‘smart payment optimisation’. All words ring true but also empty without clear direction and this is where the term ‘orchestration’ comes in. Could you explain how the term is tightening everything together?
Orchestration embraces any of the terms used above. In this industry, there is always a race to stay ahead of the game: this means optimising, doing things intelligently, and growing with the market conditions and customer behaviour. Smart routing means finding the fastest most cost-effective route for a particular payment type and smart means deploying the data that sits in and around the payment. All true, but the real value comes in through automated orchestration. Allowing a merchant to make all necessary connections to complete an online payment on a single page. In a near ‘non-experience’ merchants run on streamlined payment systems with much more security, convenience which can lead to more revenue.
For instance, when the customer makes a payment, the merchant cashier will have the same experience as the user on the ecommerce website. This works brilliantly for airlines, multi-chain supermarkets, and fashion brands which operate in multiple countries and need one service to handle currency acceptance, local market adaptation, and routing. In fact, any company operating various legal entities, brands, and markets equals the vast majority of the ecommerce global market share.
Through APIs in payment orchestrators, merchants can let their customers pay in local currencies, with the conversion taking place at the merchant’s end, giving them more control over transactions. Customers can use local wallets, which means more revenue for merchants. Perhaps most crucially, these big and medium-sized merchants have full access (where so allowed) to the data collected through transactions on their websites since all PSPs are managed uniformly. At the very least, they can optimise by following the usage trends, at best, they can create made-to-measure propositions. Furthermore, big merchants want to operate independently, and by leveraging payment orchestrators, they can standardise their payment methods and bring more transparency and efficiency into their operations.
Build your own or work with a payment orchestration platform vendor?
Airlines are a great example of multi-leveled organisations – they require payment orchestration through partners who can tackle a high volume of transactions, including exceptions, refunds, disputes, and more, all in different locations and currencies.
Being in an unfavourable spotlight for a range of operational issues at the moment, airlines exemplify organisations that are urgently questioning if their infrastructure at least offers a seamless online experience. ‘Can our in-house built orchestration layer provide flexibility, shorter time to market, and wider geographical coverage at low cost?’ Finding the right POP partner or building payment orchestration with a full suite of payment solutions can be extremely challenging. The right orchestration solution should provide an agnostic overview, covering multiple global PSPs, and tick all the boxes on security and regulation.
As digital payments become more popular (reaching a breathtaking 80% in China in under ten years), more regulations are developed to keep transactions secure. How can companies keep the track?
Payment orchestrators which handle payments from different channels and currencies must also help merchants navigate the increasingly stringent regulatory requirements within various geographies. With the right technology, merchants, especially in the travel example just mentioned can achieve greater, and in particular, constant compliance at a lower cost.
Businesses can gain a competitive edge as all of their payments are aggregated on one platform, simplifying all payment processes involved and making compliance easier to follow through by lifting some of the regulatory load.
Even though we speak primarily about the online aspect of payment orchestration, we must remember the importance of backend solutions which include managing and processing payments through various PSPs within a regulatory context around customer data and transaction checks, all while providing a centralised hub.
Are there any innovations in the payments industry that you are really excited about?
Payment Orchestration as a service is gaining a lot of traction lately, with big and medium-sized merchants opting for it in different parts of the globe. Recently, even TV satellite companies are opting for this solution: they are trying to standardise their payment methods all into one streamlined channel. It is encouraging to see non-financial institutions, alongside financial, recognise the need for seamless payment processes to be a critical part of their offering. They are now working with tech providers who are prioritising that merchants accept various payment methods, keeping it seamless for the end user, whilst providing backend solutions like settlement, reporting, and much more. The right tech providers of POPs will truly manage and organise money flows, starting right from payment acceptance to settlement with various third parties involved.
These POPs are gaining momentum within the marketplaces as multiple parties are involved, and orchestrators help them improve their infrastructure. Even SaaS providers are opting for orchestrators to streamline their tech stack across various payment channels without compromising on ownership of business models.
What used to be viewed as part of the management of a complex infrastructure has – mainly because of the impact of opening up technology with APIs and the advent of many niche fintech players, turned into a market segment of its own: orchestration – a job that requires its own tools, practices, skills, and above all global experience. In short, orchestration is crucial in streamlining complex payment ecosystems, and the world is certainly waking up to that. I am excited to see what’s next.
About Jane Loginova
Jane wears multiple hats within BPC, a leading ‘any to any transaction’ company headquartered in Switzerland. Having been with the company for nearly ten years, she has a global responsibility for corporate strategy, marketing, and business growth. She is successfully leading the development of BPC through the rapidly changing landscape of payments, banking, commerce, and mobility.
Founded in 1996, BPC has transformed over the years to deliver innovative and best in class proven solutions which fit with today’s consumer lifestyle when banking, shopping, or moving in both urban and rural areas, bridging real life and the digital world. With 350 customers across 100 countries globally, BPC collaborates with all ecosystem players ranging from tier one banks to neobanks, Payment Service Providers (PSPs) to large processors, ecommerce giants to startup merchants, and government bodies to local hail riding companies.
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