What is Payment Orchestration?

Payment orchestration is the process of consolidating all aspects of online payments, including payment gateways, payment methods, processing, and other financial service providers, into a centralized platform.

Businesses expanding internationally and working with multiple Payment Service Providers (PSPs) benefit from this unified approach due to its simplicity and efficiency.

Using a payment orchestration platform (POP), merchants can route transactions across this system and manage all facets of the payment operations. It ensures a seamless checkout experience by providing the most relevant payment methods to customers.

If a user faces difficulty paying from the initial payment method, the system automatically directs them to the next best option. For example, businesses can route transactions from Visa to Mastercard or PayPal if they face issues with the initial payment method.

Secondly, it focuses on increasing conversion rates through intelligent payment routing. Payment orchestration also unifies money movements across all providers, automating them for smoother processing. With its advanced analytics feature, businesses can keep track of their payment performance efficiently.

How Does Payment Orchestration Work?

With the payment ecosystem evolving over the years, payment processing has also become more complex. Through the use of payment orchestration, businesses establish a control centre that adapts to new payment methods and payment advancements as they surface. This allows them to stay ahead of the market curve and provide excellent payment services to their customers.

Let’s look at the step-by-step process of payment orchestration.

1.      Putting a product or a service into the shopping basket

Based on factors such as pricing, preference, and need, a customer adds a product or a service to their shopping cart. This is where the payment orchestration process begins. In the checkout section, the customer is provided with a list of payment method options, and they select the one that suits them best.

2.      Payment details are sent to the relevant payment gateway

Once the customer has chosen the payment method and made the payment, the order is placed, whereafter their details are sent to the appropriate payment gateway.

Payment orchestration handles the collection, encryption, and routing of the transaction to the relevant gateway.

3.      Processing the payment

By using the logic set by the merchant, payment orchestration automatically manages the transactions. It determines which payment processor to use for each transaction based on factors such as currency, geographical positioning, and transaction type.

4.      Verifying the details

After the payment details are received by the merchant bank, they are verified and given authorization approval under legal methods. Once approved, the payment gateway and the merchant are notified.

5.      Payment processing complete

Payment orchestration works to increase customer satisfaction by reducing the risk of payment declines and the cost of payment processing. It uses multiple payment processors to help businesses increase revenue and prevent losing sales due to payment processing challenges.

What features should a payment orchestration platform have?

When selecting a payment orchestration platform, there are certain features businesses should consider, such as its ability to scale, PCI compliance, real-time intelligence, security, advanced visibility, and flexibility. Let’s dissect them further.  

End-to-end visibility

To move in tandem with the digital world today, businesses require systems that can detect, scrutinize, and evaluate areas of improvement. A modern payment orchestration platform does exactly that.

It utilizes visuals and reports to highlight core payment processing insights to help you identify bottlenecks, make data-driven decisions, and increase sales. These insights range from presenting fraud rates, trading volume, and authorization rates.

Simple Integration

A comprehensive payment orchestration system supports integration with multiple payment methods and providers. Each customer has a distinct need, and for businesses to succeed, they should opt for a payment platform that caters to all.

Another feature that should be present is local international payment support. If your business operations target an international customer base, make sure that relevant payment methods and currencies are available in the payment platform.

Additionally, a unified frontend experience makes the checkout experience smoother for the customers. This positively impacts your business revenue.

Up to date with industry standards

In the online world, building trust proves to be the key indicator of a business’s success. Tokenization is vital when it comes to securely storing sensitive customer data and reducing the risk of data leaks.

This is ensured if a business is PCI Level 1 compliant, which is the security standard for handling payment card information. Other than that, an all-encompassing payment orchestration system leverages strong fraud detection tools that shield your income.

Prevents failed payments

Payment orchestration allows businesses to secure maximum payments by routing transactions to alternative processors if one payment processor faces downtime. This optimizes payment reliability by limiting any disruptions and offering a seamless checkout experience to customers.

What are the advantages of payment orchestration for businesses?

Payment orchestration benefits businesses in several ways. From offering lower costs, simplified processing, increased revenue, scalability, to enhanced customer experience and more. The list of benefits is endless, so let’s discuss it below.

Lower costs and time

Establishing an engineering team to manually write and code entire payment systems can take months. Payment orchestration enables you to integrate and maintain payment options with lower costs and time. 

Other than that, administering a single payment processing platform allows businesses to reduce operational costs and streamline their workflows. This helps them allocate that budget to more productive business tasks.

 Simplified payment processes

Simplicity is key when it comes to maintaining a steady cash flow. With payment orchestration, all your payment service providers (PSPs) are integrated into a unified platform. This saves you the burden of managing multiple vendor relationships separately.

Enhanced customer experience

Payment orchestration offers support for multiple payment methods such as credit and debit cards, PayPal, e-wallets, and more. This inclusivity optimizes customer experience, helping you retain them in the long term.

Moreover, with payment orchestration’s intelligent routing, you can navigate the most reliable payment paths that reduce declines. With minimized payment failures, you can offer a more convenient and streamlined checkout experience, inevitably adding to customer satisfaction.

Operational efficiency

Any business making efforts to stay on top in the B2B market adopts automation for repetitive tasks. Payment orchestration enables you to automate routing, reporting, and reconciliation. This helps you mitigate risks and errors and expedites payment processes. All in all, you benefit from saving valuable time that can be dedicated to more high-yielding company functions.

Increased revenue

Payment orchestration resolves any friction present in the transaction process. This includes reduced cart abandonments, routing to better payment options, and improving the overall checkout experience.

This encourages users to complete their purchases, resulting in increased sales and greater revenue generation.

Optimized scalability

As businesses proceed on a growth track, payment orchestration easily adapts to the scaling platform by adding or switching PSPs as per their need. It can easily handle complex payment processing and increased transaction volumes, and expand its operations without heavy reconfigurations.

This provides businesses with a competitive edge and a smoother global expansion, all achieved with cost-effectiveness.

Reduced fraud

With comprehensive fraud detection tools and all payment activities executed on a single platform, businesses can carry out their operations stress-free.

Payment orchestration manages the entire transaction lifecycle by leveraging Strong Customer Authentication (SCA), 3-D Secure (3DS), and machine learning to prevent fraudulent activities.

Faster time to market

Payment orchestration platform helps businesses expand into new markets and regions with minimal time and resource usage. It is a well-known catalyst that simplifies payment processes, equipping businesses with the tools to launch new payment options smoothly. This helps you accelerate your growth and easily enter new markets.

What are the key challenges in payment orchestration?

Although a payment orchestration platform significantly improves payment management, it can also pose challenges for businesses. Let’s have a look at some of the challenges in payment orchestration.

Third-party provider dependency

Businesses that opt for payment orchestration platforms can have a lack of control over operational processes. Since operational control is dependent on the Payment Service Providers (PSPs), any technical discrepancies or downtime can impact the entire payment flow. This leads to potential revenue loss.     

Requires technical expertise

While running a payment orchestration platform, once it’s integrated, is quite simple, implementing it in the first place can be complex. Setting up an efficient payment orchestration platform requires careful planning, evaluation of integration needs, budgeting, and understanding transaction types, payment methods, and risks.

In addition to that, you need to hire expert staff or rely on specialized external consultants who can handle the complexity of the platform. This can add to the total cost, making it a challenge for businesses.

Compliance

To operate under legal bindings, payment orchestration platforms must comply with industry standards. These include the Payment Card Industry Data Security Standard (PCI DSS) and other region-specific standards like the EU’s General Data Protection Regulation (GDPR) to ensure sensitive data protection and avoid legal disputes.

Data security

Payment orchestration functions handle sensitive financial and customer data, exposing them to potential cyberattacks.

To uphold security standards and adhere to PCI compliance, leverage features like tokenization, multi-factor authentication, and encryption. This is essential to run your business operations smoothly.

Integration issues

During the payment orchestration integration phase, you may be faced with multiple challenges. These can be compatibility issues, data inconsistencies, time delays, and overload.

A comprehensive payment orchestration platform requires integration with multiple payment gateways, providers, and processes. Hence, anticipating such issues and designing a workable plan to resolve them can do wonders for the success of your business.

Lack of familiarity

Integrating a new system into your existing workflows can be an overwhelming change. This can disrupt your day-to-day activities, affecting employee productivity. To ensure a smooth transition, craft a well-defined change management plan that mitigates interruptions.

Other than that, businesses should prepare for possible system failures that may arise and address them promptly. Ongoing maintenance is also essential for continual optimization.

How does SubscriptionFlow support payment orchestration?

SubscriptionFlow is a billing management software that handles all aspects of payment orchestration. This includes payment routing, automating recurring payments, integration with various payment gateways, advanced analytics, and dunning management strategies.

Payment Routing

SubscriptionFlow decides the most intelligent payment routing for your transactions through multiple payment gateways. This ensures high conversion rates through the most cost-effective and efficient gateway. It results in a favorable outcome for both the business and the customer.

Increased Automation

With SubscriptionFlow’s automated recurring payments facility, you can streamline your entire subscription lifecycle management. This includes automated invoicing, dunning management for failed payment recovery, handling upgrades, downgrades, or cancellations, and payment retries.

Adopting SubscriptionFlow’s automated payment orchestration allows you to shift your focus from redundant tasks to core company business operations.

Multiple Payment Gateway Integration

SubscriptionFlow offers integration with various payment gateways, including PayPal, Stripe, Adyen, Braintree, Authorize.Net, and more. This extensive range allows routing payments through the most efficient gateway depending on customer location, cost, and transaction success rate.

Advanced Analytics

Getting insights on payment trends, churn rate, customer behavior, and overall subscription performance allows you to implement a comprehensive financial system.

SubscriptionFlow provides valuable data through visuals and reports that can guide you to administer cash optimization strategies. Ultimately, you can generate target revenue while making your customers happy.

Dunning Management

Reducing the churn rate is essential to streamlining revenue generation. With SubscriptionFlow’s smart dunning management features, you can reduce involuntary churn and automate payment retries.

Another important feature is sending dunning emails to customers, enabling them to complete their payments on time. Through Dunning Analytics, you can also identify potential gaps in performance and strategically work to resolve them.