As Merchants Go Digital and Global, Payments Orchestration Needs an Overhaul

Not all that long ago, being a payments service provider (PSP) was a relatively simple affair.

They offered a range of activities within and across their platforms, advertising themselves as “one-stop shops” — especially for payments functionality.

See also: Payments Orchestration Smooths LatAm’s Path to Digital Commerce Hub

But now, as merchants enter new markets and grow their customer bases, it’s increasingly difficult to provide everything merchants need in one place or across just one or two PSPs.

Ideally, merchants should be able to quickly and safely launch their own offers — and the ability to accept payments — on a case-by-case, market-by-market basis. However, the technological heavy lifting that requires can be both time- and cost-prohibitive, so enterprises turn to payments orchestrators to help get it all done.

The increasing complexities of commerce done at scale and digitally demands that PSPs, in turn, band together to offer merchants a broad range of choices and features — preserving the relationships enterprises have with providers while enabling them to forge new ones, as needed, almost in an a-la-carte fashion.

Partnerships With Potential

As Spreedly CEO Justin Benson told PYMNTS’ Karen Webster, a partnership that brings merchants and the providers Spreedly works with — where Spreedly acts as the “orchestrator of the orchestration” — can cement payments systems across the globe.

The orchestrators, in other words, are organized, centralized and on offer to help merchants stay flexible while optimizing their payments.

The company is expanding its Payment Service Provider Program in 2022. Last month, Spreedly announced that European payments company Worldline would be joining. The program links with Spreedly’s platform to offer gateways and PSPs payments orchestration and integrations to more easily onboard merchants and platforms, reducing the process from weeks to days.

In total, Spreedly’s platform currently supports over 120+ PSP integrations. At the program’s launch last year, its preferred partners included PayPal and Stripe. Worldline, for its part, is focused on payments optimization for merchants, particularly those entering emerging markets like Latin America.

Past is prologue. Go way back into the last decade, and as mobile payments began to really take off, merchants’ businesses got well ahead of infrastructure capabilities, Benson said.

“Payments just weren’t ready,” he added.

All manner of firms went global, so to speak, creating opportunity for the Stripes, Adyens and Braintrees of the world, who offered end-to-end payments functionality that merchants plugged into.

More recently, PSPs have been introducing application programming interfaces (APIs) to speed software integration, closing large-scale acquisitions and perhaps threatening to drag on merchants’ growth as they refashion their own operations.

Changing the Payments Optimization Mindset

“The idea for payments optimization is less about single-stack solutions and more about, ‘What do I take and from whom to make the optimal payment stack for me?’” said Benson.

In other words, merchants have been pushing their providers to strike partnerships, even with competitors, to ensure they can market a range of services.

For example, Benson said that partnership model allows stakeholders to access Stripe’s Radar, provides access to alternative payment methods and allows them to make inroads into Europe. Most PSPs differentiate themselves around, say, support for regional acquirers or anti-fraud efforts.

“We want our merchants to be able to access all of these services,” he said, as merchants pick and choose what’s important to them — and Spreedly’s responsibility is to layer in those relationships, even among competitors, marked by anchor tenants like Stripe.

The model is efficient for merchants and even larger firms that have in-house payments teams but may have issues with Payment Card Industry (PCI) compliance connectivity.

See also: Travel Sites Use Payments Orchestration to Quickly Expand Into New Markets

Looking Ahead

As for what’s to come, Benson said Spreedly might well delve into new use cases that are emerging in regions like Latin America, including microtransactions and new ways to serve underbanked communities where credit card processing fees are prohibitive.

Benson said the checkout process is increasingly in focus, regardless of market, as merchants gear up for real-time payments. The company will also look to add to the 120+ integrations already in place.

“Merchants will support things that they believe consumers want to use, such as subscription services or donations or restaurant ordering,” he said. “When there’s evidence that the consumers want something, the merchants will come knocking for the value-added [and Spreedly’s] services.”