Be it small e-commerce firms, sprawling corporations, or financial institutions within open finance contexts, organisations of all stripes must at some point face the challenge of uniting innumerable payment service providers (PSPs) within a secure and seamless
payments ecosystem.
The most effective way to do this is by deploying orchestration tools within modern payments management systems. Doing so not only brings in-house efficiencies (such as expenses rationalisation, rejection reductions, and seamless systems integration) but
it can turbocharge end-user satisfaction.
Indeed, now more than ever, consumers are demanding efficient payments experiences across cards, cryptocurrencies, e-wallets – and in all currencies.
Finextra spoke to Razi Salih, CEO at Paytiko, about why orchestration is no longer a nice-to-have but essential, the characteristics of next-generation payment management systems, and what payments orchestration will look like in the future, particularly
as AI continues to streamline the industry.
Industry needs
By offering organisations with a centralised platform to manage multiple payment providers and methods, payment orchestration tools are becoming increasingly popular, and in fact, indispensable.
While customers expect to pay with their preferred method of payment and businesses expect to be able to manage multiple payment gateways and processors efficiently
and cost effectively, the issue of the complexity of payment processing in a preferred manner continues to permeate.
Preference is key. Research conducted by
S&P Global Market Intelligence 451 Alliance found that for most merchants, all their payments needs cannot be addressed by a single provider. “40% of merchants are working with four or more payment processing partners. Additionally, the percentage of merchants
that prefer to work with multiple providers to process transactions has risen to 62%, up from 50% in 2023,” the research revealed.
The future of payments is flexible, modular and capable of evolving to multi-processor requirements. In conversation with Salih, he highlights that businesses that do not orchestrate – those that are focusing on niche markets or targets, can be successful.
However, orchestration cannot be avoided forever.
“No one payment provider can provide all solutions with coverage of all countries. It is more interesting when you can do it on one dashboard and within a single integration. You don’t need to go through the hassle of going to every partner and checking
the balance or the reconciliation. You can do it with one click, one dashboard and you set the priorities, the strategy,” Salih explains.
He goes on to surmise that while orchestration allows for businesses to be monitored across a single dashboard that can support decision-making, CEOs like Salih can leverage tools to “refocus their businesses in this market. Because at the end of the day,
every new market penetration is dependent on the marketing strategy and the collection of money. You can have the best product, the best marketing, but if you cannot collect money, then it’s useless.”
Features of modern payment management systems
In Salih’s view, modern payment management systems must orchestrate. “Payment companies orchestrate internally with their partners, the banks they are working with, or within their markets. They have a certain limit because there is no one acquiring bank,
there is no payment provider – big as it could be – that has coverage for all markets.”
Using ClearBank as an example, Salih adds that they have partnered with Citi and Barclays so while they will receive a “good approval ratio,” it won’t be 100% because of the lack of orchestration. However, businesses that leverage orchestration services
from the likes of Paytiko would be able to integrate with Citi’s merchant services or accept payments from Citi credit cardholders.
As a result, a modern payment management system should have the following features:
- Efficient transaction processing
- Robust security measures
- Integration capabilities
- User-friendly interface
- Comprehensive reporting and analytics
- Multiple payment options
- Automated payment scheduling
- Real-time tracking
- Multi-currency support
- Invoice management
- Fraud detection and prevention
- Compliance features
However, while payment orchestration platforms provide a centralised system to manage multiple PSPs, combining these features with smart routing to dynamically direct transactions to the most suitable PSP based can optimise the process further.
Smart routing uses real-time data analysis to determine the best path for each decision based on factors such as the customer’s location, the payment method, the PSP’s performance and potential network issues or downtime. By intelligently routing transactions
to the most suitable PSP, the risk of payment failures are reduced, businesses can save on transaction fees and the customer experience is more satisfying.
While payment orchestration provides the framework, smart routing drives the optimal payment flow and leads to higher conversion rates and customer satisfaction. Salih agrees with this sentiment and shares that “smart routing is setting the needs of the
operation and extracting the maximum of what [PSPs] can process with it.” He continues: “The more you go in to the details of the smart routing setting, the more you’re able to optimise better. This is the essence of building a cascading smart routing that
suits everything.”
Leveraging AI for NextGen orchestration
Smart routing adds intelligence to orchestration, but AI can add logic. Beyond transaction routing, orchestration provides businesses with critical data insights such as a holistic view of payment performance, customer behaviour analysis, and fraud detection.
Used effectively, AI-enabled orchestration can enhance these capabilities further and support businesses shift beyond traditional strategies.
Salih mentions that AI can be leveraged on both the analytical and risk sides by leveraging “processing history and providing it on a silver platter for our clients as an advisor, showing how they can optimise in a more efficient way. That’s from the analytical
point of view. Regarding risk management, AI can extract the product from the providers we work with and build a flow along with the mission to set risk appetite. These are exactly the advantages that we wanted to leverage when we built our GrowthHub.”
Next-generation payment management systems are characterised by smart transaction routing, centralised and real-time payments tracking, as well as hyper-customisable payments pages. As is increasingly the case within financial services, AI is indispensable
here, making the entire orchestration process simpler and more efficient for organisations.
Further to this, multi-layered payment orchestration – which involves using a central platform to manage the routing, processing and optimisation – can do the same for alternative payment methods like cryptocurrency.
With a payment orchestration platform, one system can connect to multiple payment gateways, processors and in the case of crypto, Layer 2 solutions that streamline the entire process for both businesses and consumers. Further, protocols built on top of Layer
1 blockchains such as Bitcoin or Ethereum can doubly increase scalability and efficiency by processing transactions off-chain.
Financial services built on blockchain technology can enable P2P transactions without intermediaries. These platforms can also act as a bridge between e-commerce sites and payment processors, that can authorise and process online payments by securely transmitting
payment information.
In 2025 and beyond, organisations cannot look past orchestration anymore if they are looking to grow and expand into new markets.
link