When selling online in multiple countries, merchants have a variety of options to choose from when it comes to the payment gateway. In its simplest form, a basic payment gateway that enables transactions from a handful of global payment method providers can serve the needs of many e-commerce beginners.
But the most simple solutions are typically less suitable for merchants interested in establishing a bigger business footprint. A basic payment gateway, for example, will not generally provide access to as many alternative payment methods or be able to maximize approval rates and incorporate other value-adding functionalities in the same way.
For merchants with an international focus, or who are eyeing further expansion in their own countries, this can be limiting. Today’s prevalent model of payment stacks can easily become fragmented, piecemealing together multiple payment layers and making them exceedingly more challenging to manage — not to mention being less-than-efficient when it comes to optimizing payments. At the same time, payment authorization and processing have grown even more complex as payments become increasingly global, with a rising number of card-not-present (CNP) transactions.
To put it simply – whether domestically or when it comes to expanding globally, online merchants interested in growing their business can expect their payments to become increasingly complex and multi-faceted. As the number of payments – and the number of payment locations – increase, this can easily become a liability for merchants. With so many fragmented layers and a patchwork of software systems stacked on top of existing legacy infrastructures, traditional payment stacks are simply not designed with enough flexibility, scalability, and functionality to optimize payment flows and ensure regulatory compliance while balancing strict security standards with a need for high approval rates.
Payment gateway vs. payment orchestration
Payment orchestration is a relatively new term in the payments world – one that encompasses concepts with which most merchants may already be familiar. The term refers to all of the functionalities and features that automate, coordinate, and manage payment flows.
By using advanced technology to increase payment approval rates while processing payments more efficiently, payment orchestration helps merchants to maximize revenue and increase profit margin. Payment orchestration incorporates authorization as well as processing, while bringing in added functionalities like advanced data analysis, AI-based routing, and more.
The easiest way to think about payment orchestration is as a more advanced version of the typical payment gateway, which integrates more aspects of the payment stack and leverages additional technological features to drive added value for merchants. With more potential checkouts, and more complexity baked into each checkout, the core USP of payment orchestration – maximizing approval rates and driving efficiencies in an increasingly complex payments stack – grows each time with the number of potential new customers.