Running a growing business? Then you know the struggle of managing multiple payment gateways, processors, and service providers. It’s like juggling flaming torches – except when you drop one, it’s a failed transaction and a customer’s trust is lost.
Handling payment processing manually or relying on outdated systems only makes it worse. That’s where payment orchestration steps in – think of it as your super-efficient, automated sidekick. It smooths out the payment process, efficiently routes payments, and lets you manage different payment gateways in one place.
In this guide, we’ll break down payment orchestration, how it works, and why it’s a game-changer for businesses aiming to scale. By the end, you’ll know how to optimise your payment processing and stop losing sleep over transaction failures.
What Is Payment Orchestration?
In a nutshell, payment orchestration is the brain behind handling payments – organising everything from transaction handling and authorisations to routing and payment provider management. It essentially connects the dots between processors, payment gateways, and financial institutions, all in one unified system, creating a smooth, seamless experience for customers.
With that in mind, the global payment processing landscape evolving at lightning speed, businesses need a smarter way to handle transactions. Did you know that around 10–15% of online payments fail? That’s a lot of lost revenue and frustrated customers. Fortunately, payment orchestration solves this problem by optimising payment processing, reducing failures, and increasing approval rates.
By adopting payment orchestration, businesses can move faster, expand globally, and meet customers where they’re at – offering their preferred payment methods, at the right cost, and with fewer headaches. It’s like plugging into a central hub that takes care of all the complex bits, so you’re free to focus on growth.
Core Benefits of Payment Orchestration
✔ Higher approval rates – If one provider declines a transaction, the system automatically tries another.
✔ Lower costs – Choose the most cost-effective payment processing method.
✔ Faster transactions – Automated routing speeds up payments and reduces failures.
✔ Better customer experience – Let customers pay the way they want, with no hiccups.
✔ Easy integration – Connect multiple providers through a single setup.
How Payment Orchestration Works
Here’s the magic behind the curtain: payment orchestration simplifies the headache of managing multiple payment gateways and payment processing providers.
When a customer pays at the checkout, the system evaluates factors like cost, success rate, location, and fraud risk, then selects the best route for the transaction. Instead of relying on one provider, it dynamically switches between options to improve success rates and reduce costs. Ultimately, this automation ensures smooth transactions for businesses and happy customers every time.
The Payment Orchestration Flow: A Step-by-Step Guide
Digital payments follow a set of rules, but with payment orchestration, things get streamlined and more efficient. Here’s how it works:
Step 1: Payment Initiation
Checkout begins when the shopper selects their preferred payment method.
Step 2: Payment Gateway Selection
Based on the context, the system selects the most suitable payment gateway for the transaction.
Step 3: Cardholder Info Verification
Once the gateway is chosen, the system verifies the payment details. If all checks are passed, the transaction continues.
Step 4: Payment Authorised
At this stage, the system confirms the transaction and gives it the green light – payment approved!
Step 5: Automated Dynamic Routing
If the payment attempt fails, the system quickly reroutes it to another provider to keep the transaction on track.
Step 6: Transaction Accepted
Once the payment is settled, both the customer and merchant are notified.
Step 7: Payment Data Collection
The system collects data from the transaction to help businesses optimise future payments and understand customer preferences.
The best part? The system intelligently considers the region of the payment, finding the best route based on location. No more worrying about the right payment provider for every situation.
Why Businesses Need Payment Orchestration
Higher Approval Rates
A lot of transactions fail due to bank declines, fraud checks, or tech glitches. However, payment orchestration tackles this by automatically routing payments through multiple payment gateways. If one fails, the system tries another – keeping things moving smoothly.
Cost Efficiency
Payment processing fees can vary, but payment orchestration gives businesses the flexibility to choose the best deal. Over time, this means more savings without sacrificing service.
Scalability
Want to grow internationally? Payment orchestration supports multiple currencies, local payment gateways, and regulatory requirements. Therefore, it lets businesses expand globally without the complexity.
How Payment Orchestration Helps with Common Challenges
Payment Failures & How to Avoid Them
With payment orchestration, failed transactions become a thing of the past. Why? Because the system automatically retries payments and reroutes to different gateways, boosting approval rates.
Fraud & Chargebacks
Fraud prevention is a top priority for any business. That’s why payment orchestration integrates fraud detection and chargeback management tools, ensuring secure transactions without costly losses.
The Difference Between a Payment Gateway and Payment Orchestration
A payment gateway processes transactions for one provider, but businesses that need more flexibility often run into trouble. If a gateway fails or experiences downtime, transactions are left hanging.
Meanwhile, payment orchestration connects multiple payment gateways and providers, intelligently selecting the best option for each transaction. It improves approval rates, lowers costs, and enhances the customer experience.
Below is a comparison of their key differences:
Feature | Payment Gateway | Payment Orchestration |
Approval Rates | No fallback if a transaction fails. | Routes transactions through different providers to improve approval rates. |
Cost Efficiency | Fixed transaction fees. | Selects the most cost-effective payment processing option per transaction. |
Scalability | Limited to the provider’s network. | Supports global expansion with multiple currencies and local payment gateways. |
Redundancy & Risk Management | If the gateway fails, transactions are declined. | Automatically reroutes transactions to an alternative payment gateway to prevent failures. |
For businesses looking to scale globally, reduce payment processing costs, and improve transaction success rates, payment orchestration offers the agility and efficiency that a single payment gateway simply cannot match.
Conclusion
Managing multiple payment gateways can be a hassle, leading to failed transactions and higher costs. Thankfully, payment orchestration simplifies the process by routing payments efficiently, reducing failures, and improving approval rates. In turn, it helps businesses scale globally, cut costs, and offer customers a seamless checkout experience.
With automation and smart routing, you stay in control while payments run smoothly in the background. So, say goodbye to payment headaches and hello to a faster, more efficient way to manage transactions!