Payments orchestration may have made headlines in the last two or so years as the segment has gotten more attention, but it’s not nearly as new as it might feel. As CellPoint Digital’s Kristian Gjerding noted, the reality is that a lot more providers are simply identifying themselves as payments orchestrators, which has implanted the concept more fully into the public consciousness.
But more importantly, coming out of the global pandemic, payments orchestration has simply become more needed among a wider range of firms. Airlines, for example, have been incorporating it for almost a decade, with so much of their business happening across global borders.
“When we look at other sectors that either have been a traditionally single market or in a few markets with a single acquirer strategy, they’re now realizing that there’s a whole bunch of reasons why they need payments flexibility, and why they can’t base their business on those traditional models,” Gjerding explained.
Large and small eCommerce players are coming around to the idea that they need things like failover capacity in the event of a transaction denial, or the ability to quickly tie in appropriate local payment methods. In short, firms are globally realizing the need to manage their payment processes in the same way they’re managing their CRM – with custom-built platforms designed to automate and streamline the process, so firms can focus on growing their businesses and serving their customers.
”Large enterprises need orchestration to transform, and young eCommerce startups need it to grow into large enterprises,” said Gjerding.
The Power of Partnering With a Platform
Flashback to the 1990s: firms building their own database software was a common occurrence. Today, noted Gjerding, that would be an anomaly. Nobody’s going to write a database nowadays – they will either use one of many open-source options or buy a commercial product.
“It’s the same thing with building payment orchestration,” he said. “Doing it in-house is just not financially feasible. There’s no way you’re going to make money or get a return on that investment for many, many years.”
And while the reasons a firm might adopt orchestration can vary, an increasing number of companies are seeing the necessity and seeking out orchestration partnerships for the opportunity to increase their conversions. Optimizing payments is a good way to collect more of them – and an orchestration can help to achieve that in “a simpler fashion than before,” said Gjerding.
The Reforming Market
How well firms take to payments orchestration and how ready they are to adopt it will vary based on their background. A lot of the newer eCommerce players – the ones who have grown significantly during the pandemic and came into a market with a background in eCommerce – are often “very savvy,” noted Gjerding. They know exactly where they’re going and how they want to get there, and their main questions are how fast they can get up and running and how much it will cost them.
Legacy businesses, he noted, have a bit more work to do, with back-end silos to bust so they can examine orchestration from a whole-business perspective.
“Legacy businesses need to get around this, but they are beginning to look at it in a different way,” he said.
The market is rapidly digitizing, with new marketplace and commerce channels emerging by the day. A lost opportunity due to a bad payments experience could easily mean a merchant missing their one-and-only chance at converting a customer and bringing them back. Optimization, at its simplest level, makes those conversions happen, said Gjerding.
“We’re beginning to see these eCommerce businesses branching out into controlling their own destiny, and they want to control payments, too,” he said. “It’ll be interesting to see how it all evolves.”