Businesses Enlist Third-Party Providers to Help Deploy New Business Models

Building out new services to meet customers’ shopping and payment preferences can be time-consuming and costly, leading many businesses to spend more than they can afford. A faulty product launch or frictions within their business-to-business (B2B) or other internal processes can severely hamper businesses’ abilities to innovate their business models, placing them at a competitive disadvantage. 

Enlisting help from third-party providers, including payment service providers (PSPs), acquirers and gateways, can help businesses circumvent the costs and frictions of developing new payment capabilities from scratch. 

Most merchants already work with more than one payments processor to manage cross-border and domestic transactions, and most work with multiple acquirers, according to the “Payments Orchestration Playbook,” a PYMNTS and Spreedly collaboration. 

Get the report: Payments Orchestration Playbook 

Maintaining these relationships can be time-consuming or complicated, however, potentially straining businesses’ ability to quickly and effectively adapt their business models, launch new products or move to new markets. 

Adopting an Orchestration Layer 

This 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 handle.

“As soon as you leave your primary region, that tends to be an inflection point for looking at adopting an orchestration layer,” Spreedly CEO Justin Benson told PYMNTS in a November interview. 

Read more: What Exactly Is ‘Payment Orchestration’ And Why Does Your Business Need It? 

Streamlining their payments or other back-end processes to juggle the various relationships that are required is therefore becoming a high priority for a growing number of companies. PYMNTS found that companies were seeking to innovate various parts of their payment operations, with one-third of businesses noting they want to implement new spending management or expense controls, for example. 

Companies are also reporting higher interest in automation and other technologies that can allow them to aggregate disparate systems or tools in one place, with one-third of companies seeking to incorporate rules-based decisioning solutions to help automate payments. Another one-quarter of firms are interested in application programming interfaces, indicating a rising desire to streamline their back-end operations in the future. 

Simplifying Back-End Processes 

Adding a payments orchestration layer is one way to help firms simplify other back-end processes as they seek to adjust their business models or launch new products. 

Payments orchestration helps to easily connect any number of payment services to ensure the complete needs of a customer segment are met. This allows businesses to manage relationships with many third-party providers through one central command hub. Doing so provides the flexibility and time needed to develop new business models while also enabling payment capabilities to support these business models and streamline their end-user experiences. 

Optimizing transaction success rates, such as reducing instances of false declines, which see legitimate consumers’ purchases being erroneously flagged as fraudulent, is just one example of how payments orchestration can help improve businesses’ payments operations. This is because payments orchestration layers aggregate diverse systems and relationships into one place, making it easier to cross-reference disparate data points for more accurate risk assessments. 

Businesses can route payments traffic to the best gateway, fraud tool or other partner for any given transaction. Partnering with a payments orchestration platform has enabled firms to reduce instances of false declines and innovate their business models. 

Payments orchestration can enable businesses to streamline one or two pieces of their payment processes and enhance their operations holistically, allowing them to expand into new markets with ease.