Payments Orchestration Is Opening New Markets

As eCommerce becomes the expected norm in a post-COVID economy, merchants large and small – from novices to established experts – will be testing the limits of their new online platforms by seeking new customers, often outside of their own country.

The potential for cross-border trade and cross-border payments as a new revenue stream for the post-COVID era is large. But, as with landing any big fish, you need the proper gear. PYMNTS’ August 2020 edition of the Payments Orchestration Playbook, done in collaboration with Spreedly, provides answers to merchants’ questions about transacting successfully in new markets.

First, one needs to understand the forces still restraining this commercial potential.

“Businesses looking to break into the Chinese market might need to implement QR code-enabled payment options, such as WeChat Pay and Alipay, to get their foot in the door, for example,” the new Playbook states, while those “…aiming to establish their presence in India, by contrast, might have more luck winning customers over by finding ways to accept cash-on-delivery payments — the most common way in which local consumers pay for eCommerce purchases. Businesses operating in either market must also be able to offer their customers both payment options and ensure that the transactions they facilitate are fast and frictionless.”

Mastering this game of “musical payments gateways” is the job of a payments orchestration layer, and it is delivering transformative effects for digitally expanding businesses.

Complexity, Meet Intelligent Routing

Payment service providers (PSPs) and other solution providers offer merchants access to payments gateways that transact locally and regionally, but that arrangement is limiting.

Merchants need access to numerous gateways and automation that routes transactions intelligently for the greater chance of success – and that requires orchestration.

“Platforms work with many businesses — as partners or customers — each with their own payment services, customer expectations and needs, and that adds layers of complexity,” Lee Jacobs, director of product management at Spreedly, told PYMNTS.

“With payments orchestration, a platform can work with whomever they choose, quickly and safely, via one easily maintainable integration, versus trying to independently build and maintain these integrations on their own,” he said. “This frees up the platform to focus on what matters most — their own unique differentiators and the value they bring to the marketplace.

“It is imperative for cross-border businesses to provide their customers with fast, engaging and seamless payment experiences,” according to the latest Payments Orchestration Playbook. “Studies show that adding even one new gateway can help increase transaction success rates and boost consumer experience for both domestic and international customers. Access to multiple gateways can create a backup in case one gateway falters, improving the chances that consumers’ payments will be processed without a hitch.”

Partnering for Payments Success

As merchants and their payments partners redraw the map on global connected commerce for a post-pandemic world, payments localization and orchestration is expected to make it happen.

“Funds transferred from one country to another are often sent across a network of corresponding banks, translated across different currencies and screened for AML and KYC standards by every bank involved,” per the latest Playbook.

“Each step in this process accrues a transaction processing fee, which can quickly add up and make cross-border trade an expensive venture for SMBs. It is therefore common for SMBs to rely on payment service providers to manage the process for them.”