What we have learned from our discussions with merchants
We talk with merchants, from all different types of businesses, daily. These merchants are all incredibly different but have one thing in common, they are looking to improve, or expand their payment set up. A question we are asked regularly is, what is payment orchestration? The term has been around for a while but there is still some confusion. Payment orchestration, for merchants i.e. anyone who sells goods or services online, is a technical layer that sits between the merchants’ eCommerce and their acquirer(s) and payment service provider(s). It consolidates all aspects of the payments set up and it gives merchants complete control of their payment stack. However, it is important to note that a payment orchestration platform is not a financially licensed institution and does not provide merchants with MIDs or Merchant Account Numbers.
What do merchants want out of their payment setup?
Merchants want and should expect a lot from their payment setup. It is a mission critical part of their infrastructure. If they suddenly could not accept payments there would be huge ramifications. Which is clear from the Wirecard scandal that dominated headlines last year, the side effects of which we are still seeing today.
When talking with merchants, some of the biggest needs we see are connectivity, independence, and a frictionless customer experience.
Why is connectivity such an important issue for merchants?
Most payment professionals will tell you that having a multi-acquirer-set up is essential if you are to maintain a healthy payment stack. However, connecting to payment service providers and acquirers is not that simple; building integrations costs time and energy. These connections also need to be maintained and updated; it is not a quick and easy task.
Merchants want to grow, and to do that they need to reach their audience. Limited or static connectivity stifles growth and not offering the right payment methods can cause customers to shop elsewhere. Studies have shown that 70% of customers would most likely abandon the checkout process if they could not use one of their preferred payment methods.
Merchants who use payment orchestration can connect to multiple payment methods from just one API, the platform also builds and maintains these connections. By connecting to multiple payment providers, merchants can target specific demographics and offer more local payment options. A good example of how greater connectivity can drive growth can be seen with one of our clients. They recently entered a new market which has a strong cash culture and needed help with their cash collections, so we connected to various local payment methods which enabled their delivery drivers to take cash payments and log them online. By giving their customers the ability to purchase online and still use cash, they were able to thrive in this new marketplace.
Why is independence valuable for merchants?
Independence gives flexibility. When working directly with a PSP or acquirer, merchants lose control of their most valuable asset, their customers’ payment data. This can become an issue when the merchants want to grow and reach new demographics, as the PSP that they are working with might not offer the connectivity they need. So when the merchant tries to connect to another, technical issues can arise and make it difficult for the merchants to use the payment data held by their current PSP. This has caused merchants to end relationships with PSPs entirely in order to work with others that have a better reach. However, if the merchants store this data in a third-party vault, they are in control and provide the PSPs with the data, instead of the other way round. This additional layer makes it easier for the merchants to connect with the PSPs they want but also allows them to continue profitable, long-term relationships with their current providers.
PSPs are essential to the payment stack. But by being independent and installing a layer between themselves and the payment providers, merchants can protect their data and have the freedom they need to connect to who they want.
Why is the customer experience key?
A merchant can have all the connectivity and independence they want but what use are they, if the customer experience is lacking? Customers expect a great customer experience. However, as the market continues to grow, customers continue to become more demanding. What can merchants and payment providers do to keep up with the speed of online sales? By providing embedded checkout processes, appropriate payment methods, less intrusive and more intuitive fraud rules, merchants can simplify and streamline the payment process. Removing unnecessary friction and using an intuitive set up merchants can significantly improve their customer experience and maintain and grow their client base.
Understanding what merchants need is essential when operating in the payment landscape. By building trust with clients and getting to know how they operate, merchants can use IXOPAY to build a flexible payment setup that encourages growth. IXOPAY works with leading payment service providers and other payment software providers, this collaborative approach gives users access to the best payment network so they can create an ideal payment setup.
IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a highly scalable and PCI-DSS certified “fintech enabler”, IXOPAY fulfills the needs of large merchants as well as those of “white label” clients: payment service providers (PSPs), acquirers and independent sales organizations (ISOs). The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, payment service providers and alternative payment methods (APMs).
IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The owner-led and -financed company has grown from 2 to more than 65 employees and is focused on building innovative solutions for eCommerce.
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