What Benefits Payment Orchestration Gives to High-Risk Business
Payment orchestration is a process by which the operations of various payment service providers (PSPs), banks, and acquirers are combined and managed on a unified software that handles the entire payment process. Being a centralized platform that operates multiple PSPs, follows PCI standards, and provides high-quality anti-fraud systems, payment orchestration is beneficial to high-risk businesses. Increased payment security, cost-saving on transactions, and multicurrency capabilities are among its advantages.
This article will uncover a payment orchestration process, identify its core advantages for high-risk businesses, and name industries with the capacity to profit from it most of all.
Payment orchestration process plain and simple
Payment orchestration represents a layer between the merchant’s point of sale (POS) and the payment option offered to the client. It is hosted on a payment orchestration platform (POP). Its software processes all the stages of payment, using an array of smart mechanisms and activities that facilitate monitoring and managing the flows of the payment process.
POP represents the entrance to the payment process as well as its core. Unlike using separate PSPs and aggregators, managing payments through POP gives merchants an opportunity to regulate the infrastructure of payments, monitor centralized analytics in real-time, and profit from smart routing through automatic selection of PSP with the minimal price for a transaction, among other advantages.
Since payment orchestration takes place on one platform, through only one integration merchant accesses software that ready-to-use. Payment orchestration offers multiple connectors and payment methods, anti-fraud systems, and multicurrency support, which are valuable benefits for high-risk industries.
How can high-risk businesses profit from payment orchestration?
Financial institutions and payment card processors consider business as high risk in case the operations performed by it carry a higher possibility for chargebacks. Due to the higher risk for acquirers and payment processors, the transaction fee for these types of businesses is increased. Not all card processors even offer an option to open a high-risk merchant account. But despite the difficulties, there are payment solutions in which the advantages of high-risk credit card processing outweigh the disadvantages. One of the most beneficial solutions for high-risk businesses is POP.
Considering the above-mentioned facts, the high-risk industries have increased requirements regarding payment solutions. To a business that falls under this category, it is crucially important to provide a secure payment system that works without delay and corresponds to PCI standards to its clients. The platform complies with these requirements, adding to it an increased conversion rate and smart routing of payments along with other profits. Let’s explore the advantages of POP in more detail.
The benefits payment orchestration offers to high-risk business
- Cost-saving on transaction fees
As we mentioned above, one of the main difficulties faced by high-risk businesses is the expensiveness of transactions. The cost of a transaction is determined by PSPs, thus, it varies from one to another. POP can provide a solution to this problem. It integrates with multiple PSPs and has smart routing, that is why for each transaction the platform chooses the best PSP with a minimal price. In addition, POP does not charge a fee for the automated routing of transactions.
- Smart routing
It is smart routing allows that allows selecting a PSP with low transaction costs, but it has other advantages as well. Thanks to the capacity to set up the routing rules, POP facilitates low-risk payment methods for merchants who fall under the high-risk category. Moreover, smart routing guarantees fast payment processing for the merchant’s clients by allowing payments to be processed by high-speed providers. Besides, POP implies a reduction of false transactions by redirecting them to working acquirers or PSPs in case of a delay. Smart routing is a key factor for an increase in conversion.
- Increased conversion rate
It is essential for a high-risk business to make the payment process simple and flawless for its clients. The convenience and speed of payment are the determinants of clients’ experience. If the experience is satisfying, the conversion increases. Payment orchestration has the capacity to increase conversion rates by increasing the efficiency of the payment process. POP ensures non-stop access to multiple payment methods and currencies. It is due to the ability of POP to switch from faulty to functional PSP without any delay. As a result of the client’s satisfying experience of payment, the conversion rate increases.
- Proper anti-fraud systems
With the development of technology, fraud develops as well, especially if your business is considered high risk because the possibility of scams there is increased. That is why a regular anti-fraud system will not be enough. A high-risk business needs to make sure that the payment system provided to the clients meets its increased requirement for identifying fraud. POP is especially effective in fraud identifying. In case it works with high-risk businesses, POP not only complies with PCI standards but offers customized anti-fraud solutions adjusted to your business needs.
- Multi-currency capabilities
One more essential goal for a high-risk business is to enter new international markets and expand the audience around the world. In case the merchant wants to integrate with local PSPs, it is easily done on a POP. Contracting with various connectors worldwide through one platform, a merchant receives access to local payment methods. POP manages local PSPs and national currencies as well as supports alternative payment methods (APMs). These POP capacities expand business opportunities by connecting users across borders.
What types of high-risk businesses can benefit from POP?
The high-risk category includes a wide range of industries with specific features which rely on business type and are more likely to experience chargebacks. Despite special requirements for these industries, a high-risk business can generate profits for the clients and a merchant with the right payment solution. POP supplies one of the most efficient solutions for high-risk businesses, especially beneficial for such industries:
Forex traders and trading platforms require a Forex merchant account that can operate on POP. The platform usage is beneficial for Forex because it can significantly reduce the price of transactions, recognize and prevent fraud by powerful anti-fraud filters, and, as a result, lower the rate of chargeback. In addition to this, POP supports multiple currencies and payment methods, which is essential for Forex.
- Online gambling
Online gambling requires multiple payment options. Many merchants strive to adopt new payment methods to expand the number of clients. Payment orchestration can ensure this because POP manages multiple currencies and payment methods. There is also a need for alternative payment methods in online gambling. POP provides various APMs according to the demand of these high-risk industries.
- Online gaming
Gaming operators are in the need of a flexible payment system. POP supplies them with a single point of entry from which all transactions between the operators, the clients, and PSPs are initiated, directed, and validated. It saves the online gaming sector plenty of time because otherwise, they would have to implement new APMs manually. In addition to this, POP automatically aggregates and processes data and supplies gaming operators with essential, in-the-moment analytics to save time, prevent human error, and make decisions based on valuable information.
Orchestration of payments is efficient for the cryptocurrency due to a smart routing system, which provides uninterrupted access to payments. Transaction speed also plays an important role, because the customer experience depends on how quickly the clients can fund their accounts and withdraw currencies. Simultaneously integrating with multiple PSPs, POP ensures to choose the best one for each transaction, in this way, improving client’s experience and increasing conversion.
POP implementation: prices, rise of income, and payback period
After taking into consideration all the advantages of POP, let’s talk about prices and numbers.
Making payment for the platform, you get access to all its services together. You can appreciate full-fledged POP software for about 2500$ per month. There is also an option to try a starter version in case you want to ensure POP profits your industry, and upgrade it later.
- Rise of income
The rise in income relates directly to the conversion rate. As we mentioned previously, POP increases conversion up to 30% and optimizes costs. Let’s give an example. If the merchant works in the Forex industry in Europe and his monthly income is 200,000 euros, it will increase by 15,000 euros per month with POP.
- Payback period
The payback of the platform will not take much time. In the above Forex example recoupment period would take from 1,5 to 2 weeks. Generally, the payback period depends on the monthly turnover, the number of payment connectors, and the approval ratio.