With the new decade well on its way, e-commerce has safely established itself as the primary way people buy things. In 2020, the US recorded 10.8 billion dollars in sales on Cyber Monday alone according to Forbes, a 15% jump from the previous year.
Because online customers look for convenience when shopping, card-not-present transactions have become widespread which drive more sales for online businesses.
As an online merchant your main goal is to provide a smooth buying experience for your customers, and a vital part of that is creating a seamless payment flow.
People often forget that payment issues are one of the biggest reasons cart abandonment numbers can go up for a business. Providing your customers an excellent online shopping experience goes a long way into building a successful business, and that’s why you need to create a payment stack.
According to Zed Founder and entrepreneur Alan Safahi, your payment stack should work seamlessly with the entire website to ensure the customer journey is as pleasant as possible. That way, you can guarantee future business.
You have to be able to check payment for fraud, authorize the payment, and then complete it while notifying the customer, and you have to be able to do this within a fraction of a second.
The website should also be able to store card information for customers who want to use the same card for future purchases, and for all of these things, you need a payment orchestration layer.
So you might be wondering what payment orchestration is and how it can help your business, right? Well, here in the following passages, we will talk about all there is to know about it.
Hopefully, by the end, you will know what it is and the payment orchestration pros and cons, and why it’s a must-have integration for your business. So let’s get into it!
What Is Payment Orchestration Platform (POP)?
A payment orchestration platform helps you consolidate all your payment technology in one stack to create an efficient process without using an in-house payments team.
ZED Network provides payment orchestration solutions to businesses that need an efficient payment platform with all the advantages of the largest merchant without the need for a bloated payments team..
Every successful merchant needs a payment platform that allows for fast check out. The entire process where the card is verified, authorized, charged, and the customer notified about the order going through needs to be within a few seconds.
Your website needs a payment gateway to properly check a consumer’s card for fraud, check regulatory requirements, and plenty of other factors.
Another aspect your payment platform should be able to accommodate to check the status of the card. All these factors play a vital part in success and decline rates for your business.
Now, in the old days, ‘ e-commerce businesses could get away with one payment gateway solution for their business, but that’s not the case anymore. With new-age customer behaviors utilizing one payment gateway is not a possibility anymore.
An efficient payment platform is something you need now, and it will help you reduce declines, improve latency, and maximize gateway availability.
According to Safahi, using the right POP, you will be able to better manage your payment flows. It will help you consolidate multiple payment gateways, third-party payment services, and fraud tools into one view.
A payment orchestration platform will especially come in handy if you are a business that handles orders from all over the world. Now that you know what a payment orchestration platform is, let’s start talking about why creating it in-house can hurt your business.
Down Side Of Developing A Payment Solution In-House
If you are a small to medium-sized business and don’t have a payment gateway development team in-house, then your decision to build a payment platform might be a bad one. Here are some of the cons of trying to develop a payment orchestration layer:
- Building a payment platform is a developmental burden for your dev team. You will have many internal projects for your team, and adding more will hamper the flow of development. If you are not using developers who are experts in developing payment platforms, it might even hinder your business.
- Building the payment platform in-house will result in uncentralized and incompatible analytics. As a business, you need a lot of data, especially from the sales you make. Insights like total volume, number of payments, average ticket size, percentage of refunds, acceptance rates, ETC are essential. So you have to work with trusted PSPs (Payment Service Providers) will help you grow faster.
- Often with an in-house option, you won’t always be able to match the standard data formats. Using a payment orchestration platform that follows industry standards will help you manage administrative work overload. You will be able to flag outstanding transactions and overcharges for efficient payment solutions quickly.
- When building a payment platform yourself, you will be overloaded with integrating and managing communications between different PSPs and gateways. Creating the right payment platform takes time, and it might exhaust your time from focusing on other aspects of your business.
- When setting up your business, there will be a lot of development work to be done. From Billing, ERP; CRM; to ERP, there are plenty of things you will need to do. When you are creating your own payment platform development, it might hamper your timeframe to bring the business to the market.
Now that you know the cons of building your payment orchestration layer let’s talk about the pros of having a professional service provider’s custom payment solution.
Pros Of Utilizing A Payment Orchestration Platform
A payment orchestration platform helps bring many things in one place through a single API. Companies like ZED Network provide custom payment orchestration services.
We integrate with all the right partners including PSPs, Acquirers, Processors, Gateways, Networks and Security Vendors in one single platform. Here is what a custom payment orchestration platform helps you with:
- You have access to advanced big data analytics in one single dashboard to help you optimize your business.
- It allows you to ensure automatic reconciliation. With the right payment orchestration platform, you will be able to reconcile transactional statements automatically. It’s based on previously agreed rules the distinct payment providers set on inconsistencies in processing fees and payout schedules.
- Offers dynamic routing. Meaning you will be able to ensure a perfectly optimized solution. The Payment orchestration platform will help you with the acceptance and processing rates.
- You can easily ensure perfect risk management with high-end risk assessment solutions with custom payment orchestration layers.
- It allows you to take control of tokenizing cards. With you in control of Dynamic Routing capabilities, you can control each payment provider to perform tokenization independently, ensuring payment flow efficiency.
Now that you know the pros of having a custom payment orchestration layer let’s start talking about the benefits. In the following passages, you will find out how a custom payment orchestration layer helps your business.
Benefits Of A Payment Orchestration Platform
Regardless of your business’s size, a payment orchestration platform goes a long way into ensuring operational efficiency. While a smooth checkout experience is a fantastic benefit, a custom payment orchestration layer is a few other things.
A good PSP will let you salvage lost sales. Often businesses lose sales when transactions are declined. With the right payment orchestration layer, you will be able to monitor your decline rates, which will help you improve.
You have to be able to manage multiple currencies with many payment gateways within your stack. Investing your time and money in acquiring customer attention is your business’s purpose, but losing customers due to transaction failures will be detrimental to your business.
You have to build the average customer lifetime value, and knowing the reason behind your decline rates will allow you to improve your sales numbers.
Another thing that the right payment orchestration layer will be able to help you out with risk management. Custom payment orchestration layers have exceptional fraud prevention and detection tools that optimize your payment flow.
Digital fraud is a big problem for online businesses, so working with the right team for your payment orchestration layer is imperative for creating a safe business environment for your customers.
Work With The Right Payment Partners
So there you go; these are the reasons why you need a payment orchestration layer for your business. Creating a payment platform on your own isn’t a viable option as it would mean you will be allocating your valuable time and resources away from other developments.
Working with the right Payment Orchestration Platform is the right way to go if you want to create an efficient payment flow. So take your time, do some research, and find the right team to develop your payment platform.
If you have any questions regarding building an optimized payment orchestration layer, then feel free to get in touch with our developers. We will be more than happy to help you with all your queries.
If you have any questions regarding payment gateway solutions, you can also put them in the comments below or hit us up on our socials. So that’s it for now. We will come back with something new soon for you. Until then, see ya!