The rapidly evolving payments landscape can be a nightmare for merchants to navigate, all the more so when they’re entering into expansion mode. When moving into a new market for the first time, the complexity can increase tenfold, with multiple new payment methods, gateways and channels that they have no choice but to adopt and try to deal with.
Justin Benson, CEO of payment orchestration platform Spreedly, told PYMNTS’ Karen Webster in an interview that many merchants come to him for the first time when their business starts to scale and expand into new geographies.
“The trigger tends to be as soon as you move outside of one region,” he said. “You can simplify greatly, but the U.S. is still primarily credit-card driven. [For example,] as soon as a U.S. merchant leaves, they’re in shock as they start looking at all [these payment methods they must support and new regulatory hurdles]. As soon as you leave your primary region, that tends to be an inflection point for looking at adopting an orchestration layer.”
Benson isn’t joking about the shock and the need for orchestration. He told Webster there are multiple logistics for merchants to think about, especially with the ongoing supply chain woes that are crippling the ability of many to deliver goods on time. One of the biggest pain points for merchants these days, he said, is simply trying to work out which kinds of payments they’re willing to accept and then decoupling those from the supply chain.
“The whole idea of how to think about payments, holding payments, fulfilling delivery of shipments, on multiple fronts,” he said. “This year will be the year where many merchants really look back and think about how payments are tied into their ability to ship, their ability to do refunds and know they can actually process the second part of the payment captured because the shipment was successful. There’s lots and lots of pains around that.”
See also: Spreedly Use up 300% by Retailers for Fraud Prevention
Then there are the perennial headaches around fraud that merchants must deal with. According to Benson, it remains an almost constant topic in his conversations with merchants, although he said these days it’s getting far more nuanced than before.
Benson said most merchants already have some kind of anti-fraud service provider, and now because of that, what they’re seeing are more sophisticated attacks through very specific vectors.
“So now they’re looking at what’s the most important thing for them, whether it’s fraud around account creation or fraud around physical goods being stolen,” he explained.
That only adds to the headaches though, Benson said, because when they realize their standard fraud solution no longer works because it’s too broad or isn’t ideal for a new geography, they need to look for something more specialized. Then the challenge becomes finding the right fraud solution that also plays nicely with their preferred payment providers.
Read also: Payments Orchestration Helps Online Merchants Find, Plug Fraud Vulnerabilities
“It puts merchants back into the situation of needing to understand, or have some of that expertise in-house,” he said. “You can go to a large platform like Shopify and maybe hope to outsource some of that. But there will be some trade-offs then because now you’re working on a particular platform, so you’re dependent on them for many components. There are no easy answers in payments because the broader eCommerce ecosystem is so big, and there are so many really valuable niche players. And there’s no one who can really elegantly tie the whole thing together.”
Of course, that is exactly what many companies are trying to do under the banner of “payment orchestration.” The concept has been getting more traction in recent months, and Spreedly is one of the major players in the space. Still, Benson said there’s still a bit of confusion around what payment orchestration actually is and what it can do.
“It’s really important to keep that orchestration definition at the macro layer for merchants,” he said. “Things like payments, orchestrating credit card payments, APM, failover redundancy, integration to fraud systems — that’s where we can really help out. We fit into maybe, like, one of three core pillars that merchants need to think about in terms of executing an eCommerce platform.”
One thing payment orchestration doesn’t always do so well is connect to systems like inventory management and customer databases. Benson said the systems are connected to a certain degree, but how well they work is really a case-by-case determination for individual merchants.
See also: The Rise of Platforms (and Payments Orchestration)
“A good example is on the omnichannel side and wanting a 360-degree view of a buyer or a user of your products,” Benson said. “That often resides in CRM, you know, companies like Salesforce and Microsoft Dynamics. But talk to some merchants, and they’ll be trying to manage that 360-degree view of their customer primarily in the payments stack, while the next merchant will be managing that somewhere else in a CRM system. They want those two to connect efficiently and securely, but maybe the core business logic is outside of payments happening elsewhere.”
Benson said he is convinced payment orchestration is a worthwhile investment for many merchants. He said the idea that every business needs to think like a payments business may work for some, but for many others, they may need to focus on what they build and sell. And in that case, they don’t want or need any distractions around managing their payments infrastructure.
Benson advised integrating with a payment orchestration layer as early as possible, before it’s really necessary, rather than trying to do it when it’s overdue.
“It sounds self-serving for us, but it’s easy to do it when you still think it might be redundant because you’re early on,” he said. “It’s much easier to do it now than it is to retrofit later when you’re really ready for it.”
Read also: How Payments Orchestration Can Reduce eCommerce Platforms’ Merchant Integration Challenges
For those merchants that have committed to payment orchestration, Benson said what they really need to ask themselves is how they should be applying it to their internal organization.
“I think the next 12 to 24 months are going to be pretty choppy — there are a lot of startups getting funded and there are a lot of existing customers and payment providers who’re all slapping payment orchestration onto anything they’re doing,” he said. “For merchants, there’s going to be a period of confusion, like, wondering what exactly this is and then pulling that back up to the macro level. This is how you should be thinking about payment orchestration.”
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