An emerging payment solution is making waves in the merchant world: the payment orchestration platform (POP). It’s quickly gaining traction as a powerful tool for managing online payments — but questions abound. What exactly is POP, and how does it work? This month, we’ll dive into the fundamentals of POP, explore its key features and help you determine whether it’s right for your business.
What is Payment Orchestration?
While POP offers numerous benefits, it is not a one-size-fits-all solution. Its usefulness will depend in large part on how it integrates with your existing payment infrastructure.
In simple terms, POP software consolidates and manages all aspects of online payment processing within a single platform — like a conductor leading all the different instruments in an orchestra. By integrating various payment services such as gateways, alternative payment methods and fraud management tools, POP simplifies the payment infrastructure. This can make it easier for merchants to manage and scale their operations.
While this may sound like a game changer, it’s important to note that POP might not be the best fit for every business. Let’s look at some potential advantages and challenges.
Benefits for Merchants
Payment orchestration platforms offer several advantages that can make life easier for merchants. Here are the top key features:
- Centralized Management: POP consolidates payment processes into one central location, allowing businesses to manage all payment-related tasks in a single place or back office. This makes it easier to monitor and control the entire payment system.
- Multiple Payment Options: POP lets merchants enable multiple gateways and payment methods, including credit cards, bank transfers and cryptocurrency. The flexibility to offer various payment options enhances the customer experience and broadens your reach.
- Increased Approval Rates: With POP, merchants can route transactions to the best-performing payment providers based on geography, transaction type and payment model. This can help improve approval rates and reduce the chances of declined transactions.
- Failover Management: POP’s failover management allows merchants to automatically switch to other providers if there is an online outage, ensuring minimal disruption to business operations.
- Scalability and Flexibility: POP enables easy integration of new payment gateways, acquirers and payment methods, making it a powerful tool for businesses looking to expand to new regions or experiment with new payment options.
- Data Consolidation: With a single login, merchants can access detailed insights into payment processing across multiple banks, card types and payment methods. This simplifies reporting and offers a clearer picture of overall performance.
- Improved Customer Experience: By offering seamless access to a variety of payment options, POP can improve the customer experience and mitigate problems like cart abandonment, leading to increased conversions and customer loyalty.
Compatibility and Integration
While POP offers numerous benefits, it is not a one-size-fits-all solution. Its usefulness will depend in large part on how it integrates with your existing payment infrastructure. For example, at Segpay, we sometimes operate as a payment facilitator, which means we manage the payment page and risk for our merchants. When Segpay hosts the payment page as a payment facilitator, our platform will not work well with a POP. However, when working as a payment service provider (PSP), we can integrate the Segpay gateway to allow payment orchestrators to host the payment page and post transaction data to us for processing.
The key takeaway is that your payment service provider needs to be in sync with your plans to integrate a payment orchestration platform, and must have the platform to do so. Discuss your options with your PSP to determine what’s possible.
POP’s Target Audience
Payment orchestration platforms are ideal for large enterprises with complex payment needs. For example, cross-border sites that cater to various regions — like North America, Europe and Latin America — could benefit from POP’s ability to route transactions to local PSPs, reduce costs and increase approval rates.
If you’re operating in just one or two regions, a simpler payment facilitator platform or PSP solution may ultimately be more cost-effective for your business. POP comes with additional costs, including service fees on top of those associated with credit cards and alternative payment methods.
If you think POP might be the right solution for your business, companies like Praxis, Paymid, Skyflow, and Upgate are leading providers in our space.
Payment orchestration platforms are powerful new tools that can offer flexibility, scalability and improved customer experience. Is it a hit or a miss for your business? That will depend on your size, geographic reach and the complexity of your payment needs. If you’re unsure whether POP is right for you, don’t hesitate to reach out to your payment service provider for guidance.
Cathy Beardsley is president and CEO of Segpay, a merchant services provider offering a wide range of custom financial solutions including payment facilitator, direct merchant accounts and secure gateway services. Under her direction, Segpay has become one of four companies approved by Visa to operate as a high-risk internet payment services provider. Segpay offers secure turnkey solutions to accept online payments, with a guarantee that funds are kept safe and protected with its proprietary Fraud Mitigation System and customer service and support. For any questions or help, contact sales@segpay.com or compliance@segpay.com.
