If you are like most retailers, your payment service provider (PSP) is one of your most critical business partners. It connects you with paying customers in a wide range of markets and makes sure your payments are handled securely and efficiently. A well-executed payment process will deliver lower payment costs, increased sales, and more satisfied customers.
PSPs have filled an important gap by simplifying payments. But due to the globalization of e-commerce, another gap has emerged: PSPs are unable to serve merchants on a global scale. So, what happens when your business expands into a new market or region and you need to start working with additional PSPs? In cases like that, managing your payments can become increasingly complex again.
Fortunately, you can now simplify things by using a payment orchestration platform (POP). In this post, you’ll find out what payment orchestration means, how it works, and how it helps your business grow.
Not all PSPs offer the same reach in payment methods or facilitate card acquiring in all the regions where your company operates. Perhaps you want to optimize processing flows and have an active failover to another provider at your fingertips. The ability to actively steer and manage transaction processing over multiple providers enables you to optimize conversion rates, availability and benchmark.
Costs per transaction can be another reason to take control and prevent a lock-in with a single PSP. To fill in the gaps, your company probably works with multiple international PSPs, like Adyen, Stripe, Checkout.com or Worldpay. On the bright side, each of these companies give you access to the payment methods and the leading functionality your business and customers need. But on the not-so-bright side, each one requires you to have a separate account, and you’ll have to use different dashboards to oversee transactions being processed by each different PSP. This can quickly make your company’s payments system complex and hard to manage.
To keep things easier and more transparent, you can add a POP to your payment system. A POP lets you integrate and manage multiple PSPs using a single platform. You can oversee payments from authorization, to routing and settlement, without having to log in to multiple applications.
If your company operates across borders, dealing with multiple currencies and a spread of APMs, you can benefit from integrating a POP into your shop. A POP keeps your payment system lighter and more manageable and gives you a single point of contact for all your payments-related needs.
When a customer places an order on your website, the POP offers a unified payment experience to your customers while giving access to multiple PSPs to process the transaction. The POP determines the best route for processing the payment, depending on business rules and AI technology. Business rules can be created based on payment method, acceptance cost, the risk profile, customer country and many other factors.
A POP may also send failed payments to another payment processor to perform a smart retry. This reduces the risk of failed payment, which increases your conversion rate.
To better understand the role of the POP, take a look at this step-by-step explanation of a common path that digital payments follow:
As long as the payment is approved, the process ends here. Your company processes the customer’s order and you’ll receive the payment during reconciliation with your PSP.
But what if the payment is declined by the first payments processor? If you are using a POP, the payment can be sent to another processor (automatically in some cases), reducing the chances of the customer receiving a ‘failed payment’ message.
And once the payment succeeds, some POPs take care of reporting and provide you with an overview of all your payment information via its platform across multiple PSP’s. This can include reconciliation but, as usual, not all providers offer the same functionality.
As you can see, using a POP can streamline your payment process and reduce the risk of failed payment attempts. This prevents you from losing sales when a customer’s card is unnecessarily declined for technical reasons.
But there are other benefits to integrating a POP into your shop. These include:
Cross-border retail continues to expand and is quickly becoming a major focus for companies of all sizes. Especially for companies with a complex global payment setup, including multiple PSPs, will be inevitable as your international customer base expands.
Using a POP brings more clarity to your complex payment setup and allows you to perform many routine tasks with greater ease. And since it gives you a one-stop platform for your company's global payment flows, a POP can be a vital asset.
If the past few years have taught us anything, it is just how beneficial the multi-channel sales strategy has been for retailers all over the world. But now there’s a new strategy on the rise that combines best practices from both online and offline retail and brings the customer experience to a whole new level. It is called omnichannel. And this post shows you exactly what it means, how it can benefit your business, and how to put it into practice.
In the world of payments, hardly any other task is more overlooked than reconciliation. The mere mention of the word is often enough to trigger a yawn and glaze over the eyes of even the most dedicated payments manager. It's complicated and not fun.