The challenge of managing payment processing, a specialized set of capabilities and technologies that can go wrong in horrible ways, isn’t a task many organizations undertake. Many businesses without in-house engineering resources who fully understand the payments ecosystem to make proper architectural and engineering decisions, have created a legacy architecture that is manual and burdensome on IT.
Compounding this challenge are the multiple systems (e.g. A/R, billing systems, fulfillment systems, order entry) that interact directly with payment endpoints – each requiring updates every time the card schemes introduce a new rule. It isn’t difficult to see why the function gets outsourced.
Simplifying Payments Complexity with Payments Orchestration
The payments ecosystem is fragmented and complex without a single payment service provider who can fully service every market. Yet each merchant must develop the exact same logic and requirements to comply with the changes imposed by the card schemes.
A new breed of business-oriented architecture is addressing these challenges. By separating the complexity of connections to PSP and VAS providers, enterprises can now focus on the customer experience and better adapt to the evolving payments landscape. It enables enterprises to select a strategic blend of payment services without being locked-in to using a fixed set of providers.
Like a conductor overseeing the direction of different musicians or groups to start playing, to stop, to play louder or soft. So too are businesses now better equipped to influence transactions. By routing payments to the most efficient processor for each individual transaction, benefits of improved speed, reduced cost, and fewer false-positives results. Because at the end of the day, good checkout experiences that enable more payment methods help businesses capture all of a customer’s spend, not just some of it – whereas false declines and other bad checkout experiences can lose a customer for life.
Payments orchestration addresses two major issues; the shortage of engineering technical know-how, and customer expectations for the same type of frictionless buying experiences they get with the likes of Amazon and Apple across all their buying decisions.
Solving for payments complexities isn’t plug and play. The link between the data about payments and the actual flow of funds resulting from those transactions needs to be solved. Until such exercises are mapped, operational and financial issues will continue to exist along the payment lifecycle.
What are Next Generation Merchants Time to Explore
Payments orchestration has been occurring at the largest merchants for some time given their volumes and contracts with multiple processors. They have in-house payments teams at their disposal integrating into processor legacy systems and coding payment logic.
Younger organizations have tended to build their own payments stack, whereas older companies likely bought something and then built operations around it. Still, many do not have a payment stack at all. They run on proprietary platforms, or on proprietary code getting a view of yesterday’s data today. Reporting to them is seen as a cost-control function rather than a growth management tool.
Left out of the orchestration landscape are mid-market and SMB merchants. However, increasingly modern payment orchestration platforms are emerging that take all the essential payment functionalities a business needs and stack them together in a more efficient streamlined way. Soon they too will benefit from offering better checkout experiences, fortifying security and freeing up valuable time and resources for merchant interactions.
We believe in realizing payments as a strategic asset. If you need help simplifying a complicated environment, let’s talk.
