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Why Payment Orchestration Can't Be Provided By A Payment Processor

Why Payment Orchestration Can't Be Provided By A Payment Processor

Navigating the intricacies of payment systems is an essential part of every eCommerce operation. A key question that comes up often when speaking with customers, prospects and partners is the role of payment processors versus payment orchestration platforms.

Specifically, what are they, how they differ, and which one is right for their business.

In this piece, we'll delve into the specifics of why a payment processor cannot double as a payment orchestration platform. 

First, let's define these two terms. A payment processor essentially handles transactions between the buyer and seller. It's the engine that drives the transaction, processing card data, ensuring fund availability, validating the authenticity of the funds, and ultimately transferring money from the buyer to the seller.

In comparison, a payment orchestration platform serves as a conductor, managing all aspects of the payment process from hyper-local product detail pages and shopping carts to checkout processes to payment processes (acceptance, authorization and settlement), order confirmation, and customer support. It offers businesses the flexibility to use multiple payment methods, manage different processors, mitigate risk and fraud across all partners, and handle various currencies and languages all from one platform.

For these reasons, and more, payment orchestration is becoming an increasingly important capability for merchants to optimize their payments infrastructure. 

With this in mind, let’s look at five key reasons why payment orchestration should not be provided by a payment processor:

  1. Lack of Incentive for Payment Processors

Finally, payment processors are not incentivized to transition processing away from their platforms. In fact, quite the opposite is true. Payment processors make money from the transactions they handle. Therefore, encouraging clients to use multiple processors (and potentially process fewer transactions on their platform) would directly impact their bottom line.

  1. Lack of Flexibility

Payment processors specialize in the efficient and secure processing of transactions. However, they are not designed to provide the high degree of flexibility that a payment orchestration platform can. By design, a payment orchestration platform allows businesses to utilize a diverse mix of payment methods, processors, and currencies. This flexibility is particularly valuable in today's global marketplace, where eCommerce companies need to adapt to local payment preferences to maximize conversions.

  1. Single Point of Failure Risk

When you rely solely on one payment processor, your business faces the risk of a single point of failure. If that processor experiences downtime, undergoes maintenance, or encounters a system-wide error, your transaction capabilities could be entirely halted. On the other hand, a payment orchestration platform is built to handle such scenarios, with multiple processors in the mix and failover mechanisms to ensure uninterrupted transaction processing.

  1. Inadequate Reporting and Analytics

Most payment processors offer some level of reporting and analytics. However, this tends to be limited to transactions they've processed. By contrast, a payment orchestration platform provides a holistic view of all transactions, regardless of the processor or payment method used. Such consolidated data can reveal patterns, correlations, and insights that a single-processor view could miss, driving more informed business decisions.

  1. Complexity in Multi-Processor Management

Even if a business does decide to use multiple payment processors without a payment orchestration platform, managing them can become a complex task. Different processors come with varying interfaces, integrations, contracts, and fee structures. Streamlining these multiple touch-points is virtually impossible without the umbrella-like structure that a payment orchestration platform provides.

Payment orchestration is a capability that requires neutrality and transparency. Relying on a payment processor leads to inherent conflicts of interest and little incentive to improve a merchant's overall payments infrastructure. 

Merchants need independent payment orchestration solutions to take control and enable optimization.

Leveraging the power of a payment orchestration platform allows businesses to operate with increased flexibility, manage risk more effectively, gain valuable insights into customer requirements, streamline operations – and make more money with increased authorization and conversion rates!

All eCommerce is global and, in the world of payments, the best strategy is one that promotes adaptability, customization and resilience. 

A payment orchestration platform delivers the framework to make this possible.

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