Payments Orchestration Helps Smaller Merchants Compete With eCommerce Giants

Small- to medium-sized businesses (SMBs) can finally remove persistent payment pinch points that have long favored the online juggernauts.

While superior service has always been a hallmark advantage of small businesses, their ability to compete with billion-dollar platforms and brands at checkout has been limited and out of reach, a critical shortcoming in an area that PYMNTS’ data shows to be among the most vital in conversion and customer retention.

“When you’re competing for a sale,” Volusion CEO Troy Pike said, “just one extra click could mean the difference between winning and losing. Taking friction out of the transaction process is just as important – if not more so – for the smaller merchants.”

At a high level, said Pike, the payments journey is becoming increasingly important, given the complexities of the online payments (especially those done across borders). Fraud is also an ever-present concern, he added, as no merchant or issuer wants to decline a transaction that should be accepted.

“Fraud is moving around the globe,” observed Spreedly CEO Justin Benson during the same discussion with PYMNTS. “The bad guys are international, and different regions have different regulations.” The criminals are moving to areas and transactions where the schemes and scams are easier — and that includes card-not-present transactions.

Pike and Benson noted that payments orchestration — automating the payments experience from beginning to end, across providers, acquirers and banks — can give smaller players a leg up in the eCommerce arena, and make payments pay off.

Payments Orchestration in Practice

Benson said the payments orchestration model builds out payments infrastructure that as recently as five years ago was available only to companies like Netflix and Uber, and brings that competitive functionality to smaller enterprises.

At the point of consumer facing interaction, Benson added, the merchant can offer a range of preferred payment options, from credit cards to the “Pays” (Google and Apple). For the providers (Volusion helps client firms build their eCommerce operations), the advantage lies in partnering with payments orchestrators rather than taking on those functionalities in-house.

Benson said that orchestration also does the critical job of “filtering” payment options. The platform helps to keep consumers from being “bombarded” with too many payment options at checkout. Orchestration and optimization take into consideration where the individual is based, what the primary payment methods are, and even whether P2P payments are gaining ground.

This approach keeps the checkout experience from devolving into one where merchants throw “every payment method against the wall, hoping that one will stick,” Benson explained.

Musing on the preferred payment methods at the moment, “wallets have also done a good job of taking complexity away from consumers, so that they have a portability of information and don’t have to drag out credit cards,” Pike added.

Pike noted that Volusion has been seeing that “BNPL is all the rage for transactions over $100” and that B2B customers are also demanding a broader range of payments options.

In the end, Benson said, it is the last few steps of the transaction that will wind up becoming a strategic differentiator. Price matching is becoming a staple of online commerce, he said, so price alone won’t get consumers to pull the trigger and click the buy button.

“Thinking about the ease and simplicity of the checkout flow,” he told PYMNTS, “and the preferred methods….it’s going to be that checkout experience that determines who you buy from.”