Andy McHale, senior director of product and market strategy at Spreedly, told PYMNTS that online platforms offer advantages to all stakeholders — and they can offer an optimal payments experience.
But, as he remarked, “when we talk about platforms, marketplaces or [independent software vendors (ISVs)] — depending on the term that you may want to use — there’s such diversity in the industry in what those different marketplaces sell or offer.”
Beyond the confines of commerce itself, nonprofits and religious organizations might use platforms to help collect and aggregate payments, or a fitness chain may use a platform to schedule and pay for classes for members — in essence, delegating those activities to a third-party provider.
There’s also a wide spectrum of merchants and consumers congregating on those platforms, said McHale.
The platform models themselves can be subscription-based, international in scope, or may have sub-merchants who, in turn, bring their own processing relationships, via payment facilitators (PayFacs) or independent sales organizations (ISOs), with them. In other cases, with eBay, for example, payments from customers and disbursements to merchants can be embedded into the very fabric of the platform itself.
As a result, he said, “there are nuances to how these platforms think about how they onboard merchants, and how they facilitate payments to those [merchant] customers.”
No matter the model, there are some key considerations in place, he said. The great digital shift has forced all manner of businesses to think about checkout optimization and sales conversion. A merchant of record might be looking at the metrics tied to their online storefronts, at how site impressions translate into sales. But a platform can help take some of that heavy lifting off the shoulders of the enterprise itself.
Payments orchestration gives platforms options for the types of merchants that can be onboarded, the geographic regions that can be included, and the types of payment methods that can be offered — from digital wallets to credit cards or direct bank account payments, he said.
The Spreedly orchestration platform “allows customers to bring their own provider and the platform adds value because they can then wrap all those things in a consistent experience,” he said. “So, on the consumer-facing side, the checkout experience between merchant A to merchant B is identical regardless of who the back-end payment processor is.”
The online marketplace benefits from not having to build or maintain all those integrations, he said.
Orchestration also enables complex transactions to take place. McHale offered the example where an online travel agency may operate as a platform handling airline, hotel and rental car reservations for a given itinerary.
“There can be independent sub-merchants behind a single transaction on the back end” when a consumer transacts, he said. The orchestration platform routes the transaction to the appropriate merchant, as the consumer pays only one time with their chosen payment method.
Automatic retries (where payments may be sent to different gateways) also help ensure that commerce continues uninterrupted, said McHale.
At a high level and with the aid of orchestration, he said, platforms act as sort of a “force multiplier,” as companies join up and find they can sell their goods or services across the broadest base of customers.
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