Table of Contents
- Introduction
- Platforms’ Unique Payment Needs
- Payments Orchestration: The Value Proposition for Platforms
- Orchestration Offers Options — Even Outside eCommerce
- The Case for Payments Orchestration in Platforms
- Conclusion
- FAQ Section
Introduction
Enter the world of payment systems, and you'll quickly realize how complex they can become. For merchants, offering a variety of payment options is critical to customer satisfaction and retention. Yet, they aren't the only ones grappling with this challenge. A growing number of platforms, encompassing marketplaces, aggregators, and non-eCommerce entities like nonprofits and unions, face similar—if not more complicated—issues when it comes to managing diverse payment options.
Imagine you're an IT manager at a bustling eCommerce platform. Your company continues to onboard merchants, each with its own preferred Payment Service Providers (PSPs). Juggling these relationships, ensuring seamless payment experiences for end-users, and maintaining regulatory compliance can put an enormous strain on your infrastructure and team. This is where payments orchestration can make a transformative impact.
This blog post delves into the world of payments orchestration, shedding light on its invaluable benefits not just for merchants but also for platforms covering various sectors. From accelerating growth to enhancing the consumer checkout experience, payments orchestration can serve as a linchpin for a platform's success. By the end of this post, you'll have a comprehensive understanding of how payments orchestration can alleviate the multifaceted payment challenges faced by platforms today.
Platforms’ Unique Payment Needs
Platforms like eCommerce marketplaces and service aggregators serve as vital conduits between merchants and their customers. They provide numerous services, from marketing to scheduling, but one of their most essential roles is in payment facilitation. Handling the payments of potentially thousands of merchants, each with its own PSP, is far from straightforward.
The Rising Complexity of Payment Methods
As consumer preferences evolve, so too does the variety of payment methods. Studies estimate that by 2028, 58% of eCommerce transactions will utilize local payment methods, up from 47% in 2023. These include Account-to-Account (A2A) payments, instant payments, and regional systems like Pix in Brazil or UPI in India. The rapid growth of A2A payments alone is projected to comprise 18% of all transactions by 2028, a significant leap from the 8% share in 2023.
An Increase in International Transactions
Global eCommerce is on the rise. With predictions that 54% of online shoppers will make more international purchases in the coming years, platforms face the task of processing payments across various gateways, methods, and currencies. The failure to offer preferred payment options could lead to abandoned shopping carts, with studies indicating that 77% of customers would exit if their preferred methods aren't available.
Payments Orchestration: The Value Proposition for Platforms
Marketplaces and platforms often find themselves under immense pressure to offer a plethora of payment options. Payments orchestration can substantially alleviate this burden.
Rapid Scaling and PSP Relationships
Platforms lack formal relationships with the myriad PSPs that their merchant customers might require. Building these relationships from the ground up is unsustainable, especially as the platform scales. Payments orchestration offers a solution by providing access to a broad array of payment gateways and PSPs, thus enabling platforms to rapidly onboard new merchants.
Reducing Payment Failures
Failed payments significantly impact revenue and operational efficiency. It's reported that 11% of transactions failed over the past year, with 80% of firms struggling to identify the causes. Payments orchestration can address the root causes of these failures by automating payment retries and rerouting through alternative gateways. This not only improves transaction success rates but also enhances the overall customer experience.
A Case Study: Olo's Adoption of Payments Orchestration
A prime example comes from the hospitality sector. Olo, a SaaS provider for restaurant digital ordering and payment experiences, integrated Spreedly’s open payments platform to streamline guest payment processes. This move has empowered more than 700 brands across 80,000 locations, showcasing how payments orchestration can enable platforms to meet diverse merchant needs efficiently.
Orchestration Offers Options — Even Outside eCommerce
Payments orchestration is not confined to traditional eCommerce platforms. Its benefits extend to nonprofit organizations, unions, religious entities, and more.
Flexibility Across Various Sectors
For instance, nonprofits and religious organizations often rely on platforms to manage donations and dues. In such cases, payments orchestration can route transactions through appropriate gateways, ensuring a seamless experience for users, regardless of the payment method or location. This capability makes platforms appealing to a broad range of organizations seeking efficient and flexible payment solutions.
Enhanced Capabilities for Mission-Driven Organizations
Advanced Solutions International (ASI) provides an excellent example with its iMIS platform. This platform helps nonprofits, unions, and other mission-driven organizations manage their payment needs more effectively. By integrating payments orchestration, ASI has shortened the time to add new gateways, providing these organizations with the necessary tools to focus on their core missions.
The Case for Payments Orchestration in Platforms
Payments orchestration offers a raft of benefits for platforms of all kinds, from eCommerce giants to nonprofits handling donations. By streamlining payment processes and offering instant access to multiple PSPs, platforms can enhance their value proposition to merchant customers. This leads to faster onboarding, fewer payment failures, and improved customer retention.
Global Expansion Made Easier
For platforms eyeing global expansion, payments orchestration can be particularly beneficial. It facilitates international transactions, providing access to regional gateways and ensuring compliance with local regulations. As platforms integrate with PSPs that dominate target markets, they can smoothly enter new regions, maintaining competitive and delivering exceptional user experiences.
Conclusion
In a world where payment complexity continues to grow, payments orchestration emerges as a vital solution for platforms of all types. From eCommerce marketplaces to nonprofit entities, the ability to offer a seamless, versatile, and efficient payment experience becomes crucial for growth and customer satisfaction.
Adopting a payments orchestration strategy can be the differentiator that sets a platform apart, enabling rapid scaling, minimizing payment failures, and opening doors to global markets. As the digital economy evolves, platforms leveraging payments orchestration will be well-positioned to lead the charge, delivering unparalleled value to their merchant customers and maintaining robust, seamless payment processes for their end-users.
FAQ Section
What is Payments Orchestration?
Payments orchestration is the process of integrating multiple payment gateways and PSPs to provide seamless payment solutions. It optimizes routing, retries failed payments, and ensures compliance with various regulatory requirements.
Why is Payments Orchestration Essential for Platforms?
Platforms manage a wide array of merchants, each with different PSPs. Payments orchestration simplifies this by offering access to multiple gateways, enabling quick merchant onboarding, and reducing payment failures.
How Does Payments Orchestration Benefit Non-eCommerce Platforms?
Nonprofits, unions, and other entities also benefit from payments orchestration. It routes payments efficiently, ensuring a consistent user experience and enabling these organizations to focus on their core missions without the burden of complex payment management.
Can Payments Orchestration Help with Global Expansion?
Yes, by facilitating international payments, providing access to regional gateways, and ensuring compliance with local regulations, payments orchestration aids platforms in expanding their global footprint seamlessly.
