Why merchants should consider using a payment orchestration platform

Many merchants rely on one provider for their online payment methods in their web shop check-out. This gives them the benefit of trying to select the best fitted provider, having one integration and having payment flows for reconciliation purposes through one single provider. This option is fine for merchants who offer products or services in one or a couple of countries but, when merchants grow in volume and start offering services in multiple countries they find that things become a bit more complicated…

The first thing merchants are faced with is the fact that there is no “holy grail” of providers. They will realize their current provider probably doesn’t cover everything they need regarding coverage or performance. They will feel “locked in” with their one provider where they have very little bargaining power in negotiations.

If one provider is not enough, what do you do? 

For starters you can consider routing your traffic static or dynamic through different Payment Service Providers, card acquirers and/or Alternative Payment Method Providers.

But what is payment routing? 

Routing is the nervous system of the payments ecosystem, sending transactions to acquirers and Payment Service Providers (PSPs) for processing and approval so that payments can be completed.

What is static routing?

Static routing is a type of routing that sends transaction data to payment providers for processing along a fixed path. These routes are manually configured and managed and cannot be changed. The rigid nature of static routing means that if a primary route is unavailable, no secondary path can be utilized resulting in an inability to process the payment.

As online payments are getting more complex and global, payment volumes are increasing. Static routing is becoming incapable of dealing with these new realities.

What is dynamic/smart routing? 

Dynamic/ smart routing gives you the ability to intelligently route payments real-time according to changing circumstances rather than being limited to one path. Rules can be set to achieve specific business needs and include routing by card issuing country, vendor, product, currency, acquirer fees, and more. If there’s an inability to process transactions at the time of payment, dynamic routing can help avoid frustrating customers by setting alternative routes to another provider to ensure payments continue to be processed. That means exposure to costly acquirer failures can be reduced, and business can continue as usual.

What is a Payment Orchestration Platform (POP)

A Payment Orchestration Platform is a single technical gateway that you can place in front of your existing platform that is integrated with your provider. An orchestration platform helps merchants to optimize their payment flow at the lowest cost. These platforms include smart/dynamic routing to route transactions to the best performing provider. Ultimately leading to increased conversion, redundancy, A/B testing, flexibility, scalability and cost savings.

Next steps 

If you’re considering routing, are in the process of contracting another PSP or considering a POP, please contact us if you need any help. Our experienced Fintechamps team can help you make the right decision and support you in the selection process.

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