How Payments Orchestration Can Get Merchants in Tune With Regulators

While in-store sales saw a resurgence in 2021, online spending continues to flourish in the wake of the COVID pandemic.

Last year, eCommerce sales in the U.S. alone rose 14% year over year to hit $871 billion, while a surge in online and mobile payments adoption throughout the Asia-Pacific region and Europe is expected to help fuel an 18% annual global increase in cashless transactions through 2025.

As digital becomes the preferred transaction channel for a growing number of consumers and businesses, lawmakers around the world have placed added scrutiny on companies’ online data storage and sharing practices.

Navigating this rocky regulatory ocean can be difficult for eCommerce merchants, as it means remaining compliant with complicated, often overlapping security and privacy rules while also keeping payments seamless and convenient for customers.

Research by PYMNTS in April 2021 found that up to 58% of consumers would abandon online purchases if their payments were declined, making it obvious that swift, convenient transactions are crucial for today’s digital shoppers. Another recent PYMNTS study found that regulatory barriers were one of the key challenges keeping 47% of U.S. and Canadian merchants from moving to digital business-to-business (B2B) payment solutions.

Our April 2021 report also found that 56% of companies said payments fraud was the top worry in cross-border transactions. As online customers continue to do more shopping outside their native countries, businesses looking to support easy, convenient cross-border payments will need to maintain regulatory compliance in multiple markets.

Establishing a payments orchestration layer is one way for companies to stay compliant with multiple regulations without adding undue customer friction to the payments process. Payments orchestration can give merchants a competitive edge by aggregating their payment relationships into a single place, simplifying the overall payments process and reducing the confusion stemming from diverse compliance needs.

Payments orchestration also has a number of advantages for eCommerce merchants hoping to expand into new markets or reach new customer bases to benefit from the ongoing digital boom. Finding the right payments orchestration partner could significantly ease businesses’ regulatory burdens, allowing them to conserve vital resources to provide customers with innovative products and services.

For more on this topic, download the latest “Payments Orchestration Playbook,” a PYMNTS and Spreedly collaboration.