Prepare for high-volume spending periods with payment orchestration

Last year, in the US alone, retail spending passed $1 trillion for the first time, with holiday spending in November and December growing by 20% year-on-year, and breaking $210 billion. According to ComScore, online grocery and apparel were the top spending categories, but the highest growth categories were event tickets (75% year-on-year) and digital content (60% year-on-year). 

Merchants face a number of high-volume trading periods throughout the calendar year depending on their product offering – for physical goods retailers, that could be an increase for DIY in Spring, back-to-school spikes in Summer, and gift purchases for the holiday season in Winter. For digital goods merchants, huge sports events, game releases, and even album drops can be enough to send e-commerce set-ups into meltdown. 

This year, Asia is expected to have the highest total e-commerce revenue at over $2 trillion, with the second highest at around $1.1 trillion being generated in the Americas. With e-commerce revenue continuing to grow across multiple industries globally, merchants must prepare or risk losing transactions on high-volume spending days. 

So, how can payment orchestration help merchants capitalize on increased consumer spending? 

1) No more legacy infrastructure with cloud-native payment orchestration

Most retailers haven’t touched their payment systems in over two years, making it difficult to keep up with consumer payment preferences and offer enough alternative payment methods (APMs) at the checkout. 

Retailers need a payments infrastructure that can plug in with their existing systems today and allow them to add new connections, payment methods, and workflow automation with minimal development resources. To take on digital transformation, retailers need to choose a platform that works now, will work with their infrastructure in the future, and functions wherever and however it’s deployed.

Cloud-native payment orchestration platforms (POPs) allow retailers to add a layer to their infrastructure that can orchestrate, and standardize all the payment methods required by consumers. Through this orchestration layer, retailers can add both traditional payment types, and other APMs such as Open Banking, BNPL, and digital wallets, among others. 

2) Dynamically offer consumers their preferred payment method and failover for different PSPs

Backend orchestration covers transaction routing to optimize for a variety of outcomes, including fraud prevention and authorization rates. If a payment service provider (PSP) goes down or can’t process a transaction, a merchant faces a loss of revenue and potentially the loss of that customer forever. Payment orchestration platforms allow merchants to have back-up PSPs in place to dynamically switch between providers without the customer having any friction. 

POPs can also orchestrate the frontend checkout experience. That is, everything a merchant’s customer sees throughout their experience with the checkout, offering a merchant the ability to dynamically filter and order payment methods offered to individual customers at the checkout based on the content of a shopping cart or preferences based on previous transactions.

For example, if a merchant is working with a payment processor through a payment orchestration platform that prohibits the purchase of certain products, such as alcohol and tobacco, metadata about the contents of the shopping cart can be passed to the POP who can ‘hide’ that specific processor from the customer at the checkout and push an alternative method forward, keeping both merchant and processors happy and compliant.

Likewise, if a customer has expensive electronic products in their cart, they might be a good candidate for alternative payment methods such as ‘buy now, pay later’ or open banking, so a merchant can set a rule based on transaction value (for example, $1,000+) to offer a provider for that method, such as Klarna, Trustly or Vyne, as “first” in the order of payment methods displayed to the consumer.

3) Mitigate risks of outages with Infrastructure-as-a-Service (IaaS) 

The majority of payment orchestration platforms (POPs) on the market are built as SaaS instead of IaaS, meaning merchants are at the mercy of the SaaS provider’s security policies and have a shared tenancy. An IaaS model gives merchants a single-tenant cloud infrastructure with no single point of failure, ensuring they never lose a transaction. Merchants do not share infrastructure or server loads with any other merchant. 

While SaaS POPs may claim that having multiple PSPs on their platform removes the risk of having a single point of failure, if the POP itself goes down, every single merchant loses access to payments, resulting in a potentially significant loss of revenue. IaaS platforms, on the other hand, have a hugely reduced risk of downtime because it’s unlikely any of the large cloud services providers, such as AWS and Google Cloud, will go down in multiple geographies at the same time. In fact, when Google Cloud’s infrastructure went down in the UK during a heatwave in Summer 2022, Gr4vy, an IaaS payment orchestration platform, was able to immediately move all merchants to another region – whilst remaining compliant with data and privacy regulations – briefly until Google resolved its outage. 

If you’d like to learn more about the differences between IaaS and SaaS payment orchestration platform offerings or would like to learn how you can build a payment orchestration layer in-house, download our eGuide, ‘IaaS vs. SaaS: An e-commerce merchant’s guide to payment orchestration’, to discover which platform is best for your needs

Gr4vy is a cloud-based IaaS payment orchestration and optimization platform that simplifies building and managing payment ecosystems for merchants. The no-code rules engine allows businesses to get access to 100+ unique payment methods and anti-fraud providers worldwide through a single low-code integration, enabling them to scale their payments ecosystem and expand into new markets quickly, with just a few clicks. 

Merchants can personalize checkout experiences for every customer, create dynamic and smart rules for routing and retries, tokenize transactions, migrate data between providers and much more. Gr4vy is PCI DSS Level 1 compliant, PSP-agnostic, and offers dedicated cloud instances for resilience, redundancy, and performance, eliminating the risk of a single point of failure.

To find out more about Gr4vy’s payment orchestration solution, check out our platform.