Opening Multiple Gateways For Business Growth

Not very long ago at all, “payments” meant cash or check, even to most businesses, with the occasional exotic banking transaction thrown in, like a wire transfer. Cards, eCommerce, P2P, COVID and a host of other forces have replaced that with today’s complex payments landscape.

We’ve learned two really valuable things from it all. Firstly, payments choice is a valuable tool enabling businesses to transact faster and convert new customers. Secondly, it’s getting more complicated, not less, and businesses must administer multiplying inputs and outputs wisely.

PYMNTS’ July 2020 Payments Orchestration Playbook done in collaboration with Spreedly, looks at issues, answers and intense interest around payments orchestration capabilities. The tech is helping small and medium-sized businesses (SMBs) especially get more from their banking, mobile payments, and eCommerce investments by completing more sales. Period.

It’s All About Access

Payments orchestration is one of the more promising platform technologies, with its single-minded focus on success rates and gateway access as a means of optimizing each transaction. Many good sales are declined due to gateway issues — like not having sufficient gateway access.

“We’ve studied millions of card transactions around the world, and there is a lot of variability in terms of which provider’s latency and success rates are best in a specific market. For example, a top performer in Colombia might be middle-of-the-pack in Mexico,” Daniel Wideman, vice president of product at Spreedly, told PYMNTS. “That’s why we see more and more merchants investing in orchestration as a key part of their payments strategy. As merchants expand into new markets, it’s vital that they can successfully transact with their customers.”

With mobile and eCommerce both up drastically this year and expected to grow, merchants can’t afford to limit payment options or new revenue streams. Nor can they afford for good transactions to hit walls.

“Payments orchestration is integrating with and intelligently coordinating all payment services in a single platform to deliver a payments strategy that matches business needs. This single layer enables one set of integrations to be more easily managed, reducing costs and resources required to add one (or many) new gateway options,” Wideman said.

Finding The Right Mix

Everyone now knows, or should know, that bad eCommerce experiences — like perfectly good cards with available funds used by their rightful owners being declined — are no longer tolerated. Not only does the customer abandon that cart, but they spend less with the merchant as time passes.

“Even consumers who do not stop using their cards after their payments are declined tend to spend less with them thereafter: Their average expenditures drop by 15 percent in the six months following two or more thwarted transactions,” according to the July Payments Orchestration Playbook.

That study identified cart as the bigger risk, saying 42 percent of “would-be eCommerce customers are likely to abandon their carts if their cards are declined.” That’s why more merchants are embracing payment gateway management solutions as they not only recover but seek growth again.

“The ability to connect to multiple services also spreads exposure, improves success rates and limits overall risk. With lower costs to build integrations and less risk to trying new partners, there can be greater experimentation. It is much easier to try out new providers and find the right mix for the business’s needs,” Wideman observed.