The key role of payment orchestration for Ecommerce growth

With the massive rise of online shopping in the past years and the steep increase in retail sales around the world, it has become strategic for Ecommerce to ensure a flawless buying experience to customers. In order to achieve this, businesses are actively looking for the right infrastructure for their Ecommerce in order to maximise conversion, reduce failed transactions and increase sales.

When looking at the customer journey, payment processing and a quick and secure check-out are important factors that lead to successful transactions. Maximising Ecommerce sales while reducing payment processing costs – together with a reduction in system maintenance - is made possible by orchestrating different payment solutions and methods within the same access point.

With the integration of multiple alternative payment methods through a single provider, costs often tend to rise rapidly. Additionally, without an orchestration platform, integration issues can occur and, in the lack of a common, centralised reporting system, data are fragmented and heterogeneous. Moreover, relying on a single payment service provider may lead to a higher number of failed transactions, e.g. in case of technical problems of the acquirer.

Those mentioned above are just some of the reasons why payment orchestration platforms are increasingly popular among medium-sized and large companies: a single point of access to multiple gateways and providers for payment processing is the most effective solution to the complex international scenario in which large online retailers operate.

What is payment orchestration?

The meaning of payment orchestration comes from the analogy to music, where the maestro orchestrates different instruments in order to achieve the perfect symphony. The same idea works for payment processing. Each integration works within the system in order to allow the most efficient route for a quick and secure transaction, reducing processing time and maintaining high security standards. This simplifies processes and saves the time and costs of individual integrations (e.g. of alternative payments), ensuring a frictionless check-out experience for customers.

Furthermore, one of the strategic aspects of payment orchestration is the effectiveness of data analysis and reporting. Relying on partners capable of integrating multiple solutions and providers reduces data fragmentation, favouring a holistic integrated reporting system. Thanks to a single dashboard, the number of payment providers and methods becomes secondary because all flows converge on a single touchpoint, which provides uniform data and facilitates reconciliation and information processing. The popularity of these platforms is confirmed by the increase of the global payment orchestration market expected in the coming years: according to a report published by Grand View Research, the CAGR in the period 2023 - 2030 will be around 24.7%.¹

What are the benefits of payment orchestration platforms?

In the increasingly competitive Ecommerce environment, factors such as transaction speed, simplified access to preferred payment methods and high security standards are decisive for consumers and online businesses. And it is precisely on these aspects that payment orchestration is able to:

• Increase conversion rate
  Customer experience is key. Everything that can be done to help customers successfully carry out transactions must be of high priority, as it directly impacts conversion rates. Smart routing, alternative payment methods and local currency availability are only some of the assets of these platforms.
• Reduce failed transactions
  The artificial intelligence engines underlying smart routing ensure that, in the event of problems with one of the payment providers, such as the acquirer, the transaction is carried out by an alternative provider.
• Expand to international audiences
  Selling globally requires understanding diverse customers and buying habits. Providing preferred payment methods according to geographic region or preferences for specific market niches can differentiate businesses from competitors.
• Help businesses scale faster and reduce time to market
  Payment orchestration is fully customisable and offers the opportunity to quickly integrate new solutions and alternative payment methods (e.g. local wallets). This reduces time to market by facilitating access to new markets, quickly integrating new payment methods and solutions when the offering expands or changes.
• Reducing fraud
  Having a single platform that manages all stages of the transaction across multiple payment methods and providers enhances fraud prevention, especially in terms of managing 3D protocols. In fact, the ability of these platforms to leverage Strong Customer Authentication exemptions, combined with pre- and post-payment authorisation checks, significantly reduces chargebacks by optimising approval rates.
• Automatic reconciliation
  The precise monitoring of all financial flows on a centralised route saves time, effort and economic resources otherwise needed for manual tasks. In addition, the risk of errors is significantly reduced, as the reconciliation activities between sales orders and credit flows to accounts take place automatically, according to rules pre-set by the company.

Payment orchestration for international online retailers

For international companies, a global multi-provider aggregator results in more effective payment and collection orchestration, both because it simplifies the management of payments from different countries and in the customer's preferred currencies, and because it reduces the number of contracts required to build a complex and structured ecosystem of suppliers across all geographies in which they operate.

In conclusion, payment orchestration is the key to growing an Ecommerce business internationally, offering customers the best possible shopping experience while reducing the complexities of managing multiple geographies with local partners and platforms.

Would you like more information on the payment orchestration market and the improvements in approval rate for businesses after its adoption? Download Fabrick's whitepaper on payment orchestration.