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Payment orchestration explained

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No matter what your business sells or how you sell it, one thing's for sure: if you're accepting digital payments, you need to make sure those payments are handled smoothly. But let's face it, not all businesses are the same.

For businesses that are scaling up or are already enterprise-level, things get a bit more complicated. Juggling multiple payment providers, finding the most cost-effective way to process transactions, staying on top of those ever-changing regulations, and keeping your customers' payment data safe – it's a lot to handle. And as your business grows, so does the complexity of your payments.

That's where a payment orchestration platform (POP) comes in. It's designed to simplify payment processes, especially for larger businesses operating at scale. In this article, we'll break down what payment orchestration is, why it's a game-changer for growing businesses, and how to pick the perfect platform to support your success.

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What is payment orchestration?

‍Payment orchestration is the process of managing and coordinating the different processes, channels, and service providers in the payment process.

Through payment orchestration, businesses can ensure a smoother, more streamlined end-to-end payment process. And, by harnessing payment orchestration to bring together the multiple entities, platforms, and currencies under a single, unified umbrella, enjoy fast, cost-effective, and customer-friendly digital payments at scale.

In this sense, a clue to what payment orchestration is is in the name, in that it’s like a conductor standing in front of an orchestra.

But instead of instruments, there’s an auditorium full of payment gateways, transactions, acquirers, financial institutions, anti-fraud prevention measures, and compliance requirements. It’s the job of a payment orchestration platform (POP) like ProcessOut (we’ll discuss POPs in more detail shortly) to, through a few flicks of that conductor’s baton, keep everyone in time – and ensure the music of the payment process sounds exactly as it should.

Payment orchestration’s core tenets include:

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• Multi-gateway management: drawing on several payment gateways so that, if one fails, the transaction can automatically be rerouted to another gateway.
• Routing optimization: funnelling transactions through the most cost-effective path through weighing up factors like payment method, currency, and geographic location.
• Fraud prevention: implementing fraud detection tools across multiple payment channels to prevent illicit transactions and stay on top of risk.
• Transaction reporting and analytics: providing insights into payment performance to help merchants understand their business, and optimize their payment strategy.
• Compliance management: making sure all transactions toe the line of regional and international payment and privacy regulations, such as PCI DSS (Payment Card Industry Data Security Standard) and GDPR (General Data Protection Regulation).
• Vault: Storing sensitive customer payment information securely to ensure compliance and protect against data breaches, while allowing for seamless recurring payments and future transactions
• Payment method and currency support: enabling businesses to tap into a plethora of different currencies and ways to pay, empowering wider reach and overseas expansion.

We’ll get to how payment orchestration works in a second – but first, we need to take a closer look at who is involved in coordinating the process. And that means digging into what a payment orchestration platform (POP) is in a little more detail.

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What is a payment orchestration platform (POP)?

Earlier, we mentioned that payment orchestration unifies the channels, currencies, and financial institutions under a single umbrella.

Well, this umbrella has a name – and it’s a payment orchestration platform (POP).

The role of a POP is to pull together an array of different payment methods and payment service providers (such as PIX, iDeal, Alipay+, Grabpay…) to enable you, as an online merchant or retailer, to manage your relationships with multiple payment processors from a single platform.

For you as a  business, this amounts to convenience – and a good POP has the ability to simplify your frontend and backend processes. What’s more, your customers will benefit, too – namely, by being able to pay with the payment method that suits them best, and through the cohesive, consistent checkout experience the right POPs allow you to offer.

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How does payment orchestration work?

To illustrate the payment orchestration process, let’s take a look at how a POP can facilitate a smooth transaction – starting with the moment a customer adds an item to their online cart.

Next, the customer picks their preferred payment method – that could be with a credit or debit card, with an alternative payment method such as Apple Pay, or through a finance-driven option such as Buy Now, Pay Later (BNPL) – and heads to the checkout.

Following that, a payment gateway gets involved. This is the piece of software responsible for encrypting and, ultimately, authorizing the payment: relaying the transaction data, via the payment processor, to the acquiring bank (that is, the bank responsible for handling payment processing on the merchant’s behalf). The acquiring bank then works with the issuing bank – the customer’s bank – to iron out the finer points of the transaction.

By the way, all of this happens in the blink of an eye, ensuring a frictionless experience for your customers.

Normally, after the banks involved have worked out whether to approve or reject the payment, they’ll send the verdict (which comes in the form of a response code) back to the payment gateway, where the merchant then finds out whether the payment has gone through. With a payment orchestration platform, though, it works a slightly different way.

What a POP does is provide an extra layer of security in case, for whatever reason, a payment fails. Should the transaction hit a snag, the POP will automatically reroute it to another payment processor – where the payment is approved. This avoids frustration for the merchant – and, for that matter, embarrassment for the customer – when a decline comes back.

Better still, by helping the merchant drive down declines over time, payment orchestration platforms will ultimately result in more sales, more revenue, and a better customer experience.

But those aren’t the only benefits payment orchestration can have for merchants. Read on – we’re exploring the rest of payment orchestration’s advantages for your business below.

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What are the key advantages of payment orchestration for merchants?

From staying in the black to expanding overseas, let’s take a look at the top five ways the right payment orchestration platform can benefit your business.

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Cut costs

Managing relationships and contracts with multiple payment service providers isn’t just time-consuming and stressful – it’s expensive.

What the right payment orchestration platform does is lighten the load, decluttering your intray of the payment-related admin and unifying your payments stack.

With a single API connecting you to all the world’s payment APIs, you won’t have to manage each individual payment provider (and their costs). Instead, you’ll benefit from the fact that the right POP will have already built these relationships, and on a global scale – allowing you to further drive down expenditure by tapping into the better rates these POPs have negotiated with payment providers on merchants’ behalf.

What’s more, a good POP will save you money by routing your transactions to the lowest-cost provider – small, incremental gains that add up to big ones in the long run.

Do business beyond borders

Whether you’re an established business or just starting out, overseas markets will always represent an alluring, attractive opportunity to grow into – and here, the right POP can help.

By supporting an array of local and international payment methods, a payment orchestration platform can help you cater to customers around the world. Through access to a diverse set of payment providers, POPs enable you to accept payments in different currencies, localize the customer experience, and present a wider range of ways to pay to increase conversion rates and reduce the associated costs.

The result? A shortcut to international expansion. And from there, who knows?

Use data to propel payment performance

Turning your business’s data into actionable insights to improve is a huge part of what you do. 

The problem? It’s not all that easy. (Or, for that matter, all that fun.)

Fortunately, this is something the right payment orchestration platform does for you. POPs aggregate data from across the entire breadth of the providers processing your payments: running a deeper, more granular microscope over transaction performance, customer behavior, and payment trends to find out what’s working – and, more tellingly, what’s not.

Even better, if you’re a multinational company, the right platform allows you to control data visibility: local entities can focus on their specific metrics, while the global team gets a comprehensive overview. This way, you can make informed decisions at both the local and global levels.

Better yet, through the intuitive, intelligent dashboards your POP will provide, you’ll have a centralized control panel from which to generate tailored reports, which you can use to keep tabs on your KPIs and make better, more data-driven decisions about your business.

Boost your speed to market

To turn an idea into a thriving, monetized business requires the ability to accept a wide range of payment options – and to do that can require a lot of time, effort, and resources.

With a POP simplifying the ability to set up a top-tier payment stack – and handling the tech demands, the logistical efforts, and the array of administrative burdens involved – you can cut down the time it takes you to get to market, and steal a march on your competitors.

Reduce payment fraud

When fraudulent payments slip through the net, it’s not only bad for your business’s bank account – it’s bad for your brand. Unauthorized payments lead to disputes, disputes lead to chargebacks, and chargebacks constitute damage of a financial and reputational nature.

The good news? That a payment orchestration platform helps you stay not just a step ahead of the fraudsters, but out of sight of them. With the right POP in your corner, you’ll be able to apply consistent fraud rules across all payment gateways and channels: ensuring each transaction is subject to the same rigorous checks, and stop fraud slipping through the cracks.

What’s more, you can customize those fraud detection rules based on your business’s specific needs – adjusting parameters like geolocation and transaction velocity for a tailored approach. 

POPs also tap into a treasure trove of authentication and fraud-fighting strategies – including Strong Customer Authentication, 3D Secure, tokenization, and real-time transaction monitoring – to reduce your business’s risk. And by overseeing the transaction lifecycle across all your payment providers and methods, help you build a powerful, dynamic authentication flow that prioritizes your payment security – without ever compromising conversion.

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What should your business look for when choosing a payment orchestration platform?

With payment orchestration platforms offering such a wealth of benefits for your business, the question isn’t one of whether you should use a POP – it’s which POP you should use.

So, before you sign on the dotted line with a particular POP, equip your business with the knowledge of what to look for in your chosen payment orchestration platform.

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Agnosticism

Flexibility is key when selecting a payment orchestration platform, and that’s where an agnostic approach comes in. You don’t want to be locked into a specific set of payment providers or methods – you want the freedom to choose, switch, and adapt as your business grows and changes.

An agnostic payment orchestration platform allows your business to seamlessly connect to different payment gateways, acquirers, and processors without friction. This kind of flexibility ensures your payments strategy can evolve alongside your business and the market, letting you integrate new technologies and scale globally. The right platform keeps your payment infrastructure dynamic, responsive, and ready for whatever comes next.

Platform scalability & stability

Utilizing a payment orchestration platform can help your business grow—provided that the platform you select is able to scale in tandem with your ambitions. 

To this end, ask yourself: is the POP equipped to handle a large volume of transactions? How many integrations does it offer—both with a diverse range of payment service providers and payment methods your business relies on daily? Critically, does the platform boast high uptime and robust stability to ensure uninterrupted payment processing, even during peak periods or unexpected surges in traffic? 

And, of course, are its processes compliant with the necessary regulations and security measures to safeguard your business and customers, both now and as your sales and customer base multiply?

Support

When selecting a payment orchestration platform, it’s important to consider the level of customer support available. Will your business have access to a dedicated Customer Success Manager to help shape your payments strategy? Is there support from on-call engineers to keep your platform running smoothly? 

It’s worth choosing a platform that offers direct, responsive communication channels—whether through a dedicated Slack channel or a strong technical support team—to ensure you get quick answers and solutions when you need them most.

Smart, not static

Businesses grow by staying smart, not by staying in the same place – and it should be the same for the payment orchestration platform you opt for.

So, look for features like ProcessOut’s smart routing. Eschewing the slower, more cumbersome pace of static routing rules, smart routing draws on machine learning and statistical models to automatically select the best provider for each transaction. Plus, by learning from every payment you accept, ProcessOut’s algorithm is constantly on the search for the most optimal provider – saving your business time and money each time you transact.

Security

In 2023, the average data breach cost organizations $4.88 million. Safeguarding your customers' most sensitive payment information is no longer just a branding and financial necessity, but a critical responsibility.

While PCI DSS Level 1 compliance is a must for any payment orchestration platform, it's important to consider security measures that go beyond the basics. Look for platforms that implement advanced security tools like encryption standards and tokenization, ensuring that all data is securely transmitted and stored.

It's also essential to consider where and how your data is managed. Compliance with regional regulations like GDPR and transparency in security practices are key factors. A platform that offers regular penetration testing, continuous monitoring, and a dedicated infrastructure for managing cardholder data will help keep your business protected—allowing you to focus on growth without compromising on security.

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How ProcessOut simplifies and streamlines the payment orchestration process

By now, you’ve learned what payment orchestration is, how payment orchestration platforms handle merchants’ needs, and how to choose one that fits you—and your business—like a glove. Which brings us to one final question...

…what can ProcessOut do for you?

At ProcessOut, our mission is simple: to bring Simplicity, Flexibility, and Performance to payments. We believe these values are critical for businesses looking to streamline their payment processes, scale efficiently, and maximize their payment ecosystem’s potential.

With Simplicity, we ensure that your team can focus on what matters most, saving valuable engineering time by seamlessly connecting with multiple payment providers. Our Flexibility allows you to adapt and grow your payment stack with ease, connecting to new providers and optimizing performance with just a click. Finally, our commitment to Performance ensures that we help you improve conversion rates, lower transaction costs, and increase the overall ROI of your payments.

Sounds good?

To learn more about how ProcessOut can help you unify your payment stack, reach out to our team today.

Let’s discuss how our focus on Simplicity, Flexibility, and Performance can help meet your unique payment orchestration needs.