Payment orchestration vs. payment aggregators: Which is best for your business?

As businesses strive to meet the demands of an increasingly global and digital market, choosing the right payment solution becomes a strategic decision. Whether you’re a startup launching your first online store or a global enterprise expanding into new markets, the tools you use to handle payments can significantly impact your success.

Two leading solutions, payment orchestration platforms and payment aggregators, offer distinct approaches to simplifying and managing payments. But their capabilities, benefits, and limitations cater to different business needs. In this article, we’ll explore how these two models work, the advantages they bring, and how to determine which one aligns with your goals for growth and scalability.

What is a payment aggregator?

A payment aggregator simplifies the payment process by allowing businesses to accept various payment methods through a single platform. Aggregators eliminate the need for merchants to establish individual accounts with each payment provider, making it an attractive choice for small and medium-sized enterprises (SMEs).

Key features of payment aggregators

• Simplified onboarding: Quickly set up payments without negotiating multiple agreements.
• Shared merchant account: Operate under a single account managed by the aggregator.
• Basic reporting: Access standard transaction data.

Pros of payment aggregators

1. Ease of use: Ideal for businesses looking for a quick start with minimal technical know-how.
2. Lower upfront costs: Aggregators often charge lower setup fees, making them accessible for smaller businesses.
3. Streamlined compliance: Aggregators handle fraud prevention and compliance, reducing administrative burden.

Cons of payment aggregators

1. Limited control: Businesses have fewer customization options.
2. Risk of account holds: Aggregators may freeze accounts if they detect suspicious activity.
3. Transaction fees: Aggregators’ fees can be higher in the long run for high-volume businesses.

What is payment orchestration?

A payment orchestration platform acts as a centralized hub, integrating multiple payment gateways, service providers, and payment methods through a single API. Unlike aggregators, orchestration platforms offer businesses complete control over their payment ecosystems.

Key features of payment orchestration

• Dynamic routing: Optimize transaction success rates by directing payments through the most efficient channels.
• Integration flexibility: Connect with multiple PSPs, gateways, and alternative payment methods.
• Advanced analytics: Gain actionable insights to enhance payment performance.

Pros of payment orchestration

1. Enhanced scalability: Ideal for businesses planning to expand globally.
2. Improved redundancy: Reduce downtime with backup payment processors.
3. Cost optimization: Negotiate better rates with multiple providers and route transactions intelligently.

Cons of payment orchestration

1. Initial setup complexity: Implementation may require more effort than aggregators.
2. Higher costs for smaller businesses: Orchestration platforms’ advanced features may not be necessary for smaller operations.

Key differences between payment aggregators and payment orchestration

Control and flexibility

• Payment aggregators: Limited options for customization and payment routing.
• Payment orchestration: Full control to design bespoke payment workflows tailored to business needs.

Scalability

• Payment aggregators: Best for SMEs with straightforward payment requirements.
• Payment orchestration: Suited for enterprises with complex global payment needs.

Risk management

• Payment aggregators: Fraud prevention and compliance are managed by the aggregator.
• Payment orchestration: Businesses can implement tailored fraud detection and compliance measures.

Why payment orchestration is growing in popularity

As businesses scale, payment needs become more complex. A payment orchestration platform offers a strategic advantage by enabling:

• Global reach: Seamlessly accept payments in multiple currencies and regions.
• Payment redundancy: Avoid transaction failures by leveraging multiple providers.
• Customer personalization: Offer preferred payment methods tailored to local preferences.

According to Gr4vy’s insights on payment orchestration, businesses leveraging this approach report higher success rates and lower operational friction.

Real-world examples of use cases

A small business choosing an aggregator

Consider a small online retailer looking to start accepting payments quickly without heavy investment. Using a payment aggregator allows them to integrate popular payment methods like credit cards and e-wallets without individual agreements with each provider. The simplified setup and lower costs make aggregators an ideal choice for this scenario.

A growing enterprise adopting payment orchestration

Now imagine a rapidly expanding e-commerce platform targeting global markets. Their customer base demands local payment methods, multi-currency support, and seamless transactions. By using a payment orchestration platform, the business can integrate multiple payment gateways, optimize routing to reduce costs, and enhance the customer experience with tailored options.

How to decide which solution fits your business

When deciding between payment aggregation and orchestration, consider the following factors:

Transaction volume

High-volume businesses benefit from orchestration’s cost optimization and redundancy. Aggregators, on the other hand, suit smaller businesses with limited volumes.

Growth plans

Expanding into new markets? Orchestration platforms’ ability to manage multiple currencies and regional payment methods makes them an excellent choice.

Customization needs

If you require dynamic routing or advanced fraud prevention, payment orchestration provides unmatched flexibility. Aggregators work best for businesses with simpler needs.

Frequently asked questions (FAQ)

What is payment orchestration?

Payment orchestration refers to the process of managing multiple payment providers, gateways, and methods through a single platform. It enables businesses to optimize payment routing, improve transaction success rates, and maintain flexibility. Learn more about payment orchestration here.

What is the difference between a payment aggregator and a payment processor?

A payment aggregator allows merchants to process payments through a shared account, simplifying setup. A payment processor, on the other hand, handles the backend transaction process between the merchant, the customer’s bank, and the acquiring bank.

What is the difference between PSP and payment orchestration?

A Payment Service Provider (PSP) offers access to various payment methods through a single service. Payment orchestration goes further by enabling businesses to manage multiple PSPs, optimize routing, and gain deeper insights into payment performance. Learn more about PSPs vs. orchestration here.

What is the difference between PG and PA?

A Payment Gateway (PG) captures and transfers payment data from the customer to the acquiring bank. A Payment Aggregator (PA) processes transactions through a shared account, handling compliance and risk management. Learn more about gateways vs. aggregators here.

Why payment orchestration is the future

As businesses grow, so do their payment needs. While aggregators offer simplicity for smaller operations, payment orchestration provides the control, scalability, and insights needed to thrive in competitive markets. Investing in the right solution now can streamline operations and boost customer satisfaction.

Ready to elevate your payment strategy? Contact Gr4vy today and discover how our payment orchestration platform can empower your business to scale efficiently.