Payment Gateways

Changes in your payments mix? Need to move to a new gateway? It may be time to examine payments orchestration.

Your business is built on digital payments. So, it’s vital that your payments technology is available to accept payments from your customers. Enter Payments Orchestration.

Written by
Clay Hefner
Publication Date
July 9, 2020
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Your business is built on digital payments. So, it’s vital that your payments technology is available to accept payments from your customers. 2020 has been a year of extraordinary change that challenges even the very best payments professionals.

Merchants are seeing a significant increase in payment processing costs due to a dramatic shift from card present (CP) transactions to card-not-present (CNP) ones. The reasons vary across industries but many driven by a massive shift in consumer preferences and a move from in-store to online transactions.

The team at 451 Research recently called out the same in a recent report, “COVID-19 has brought the e-commerce market of the future to present day” that millions of people have tried e-commerce for the first time. And even mature markets have seen a surge in e-commerce activity.

But if your payments system isn’t available to accept payments — because of an inability to scale, business shutdown, or another commercial reason — that can lead to a significant loss of revenue.

Fast-growing merchants and large enterprises recognize the importance of having an adaptable payments infrastructure. After all, managing change is a perennial business problem.  The best business leaders are those that can strike a balance between proactively planning and budgeting for known changes while also nimbly reacting to the unforeseen rapid changes.  

Change the Gateway? Not so Fast…

As a payments professional navigating these changes your goals include ensuring stable and resilient transactions. The immediate inclination for many large organizations may be to switch gateway providers or attempt to renegotiate terms due to the rising risk of payments.  

While certainly an option, consider how payments orchestration can help. Relying on a single gateway may not provide the flexibility needed to adjust quickly. Plus, it enables a successful redundancy strategy in the event your provider has a short term outage or longer term challenge.

A big factor in change management is balancing the amount of time and resources spent. For many organizations the benefits of a multiple gateway payment strategy are clear. Yet the complexities of developing and maintaining them in-house outweigh the benefits. This is especially true of startup and growth phase companies. It’s not uncommon for payments professionals to ask:

  • How do I create new gateway integrations and ongoing maintenance without exponentially increasing my development costs?
  • If I’m using multiple gateways, how do I manage a seamless transaction experience with my customers without increasing my PCI burden?
  • How can I continue to work with a gateway that works well for part of my business but falters in other aspects?

While this is only a short sample very valid concerns, we at Spreedly believe they shouldn’t be roadblocks for enabling your long term payments strategy.

Enter the Payments Orchestration Platform

Payments orchestration is the idea of integrating and intelligently coordinating your payment services in a single platform to deliver a flexible payments strategy to match your business needs.

This single layer enables one set of integrations to be leveraged by your payments teams. That reduces the cost and resources required to add one (or many) new gateway options. It also makes switching between integrated gateways seamless as you retain the portability of vaulted data. The ability to connect to multiple services also spreads exposure and limits overall risk.

When there's not a lot of costs involved in building new integrations and there is reduced risk to trying new partners, it also allows for greater experimentation. It is much easier to try out new providers and keep risk down.

The Data

The team here at Spreedly has done a lot of digging into the return organizations can experience simply by adding a new gateway to the mix. In a recent assessment, we analyzed 3.5 years of data from January 2017 to mid-June 2020.   Authorization and purchase transactions made with credit and debit cards were included.

Looking at one specific organization:

“Company A had a success rate of 86% using one gateway.  Approximately a year into their Spreedly tenure, they began consistently transacting on a second gateway, increasing their success rate to 93%.  This company had a weekly average of 121K transactions and the increased success rate nets this company an extra $2M per week.”

Further, leveraging a Payments Orchestration strategy allows organizations to shift their focus and effort from enabling revenue, to optimizing it. Gateways and PSPs have different success rates in different situations. The best performing gateway for you might be different in another geography or for another industry.

With Payments Orchestration, businesses optimize their payments by intelligently routing transactions to the right gateway or service for a given transaction. By leveraging multiple payment services, you not only lower vendor risk, you also can drive higher success rates and lower transaction costs.

This is just one example showing a clear ROI for multiple gateways. Every participant in the payments landscape has different needs and business drivers. We think a look at Payments Orchestration is a valuable investment — especially when making a change to your gateway.

Want to know more about how we can help with your payments mix?

Reach out to our team and let us know how we can help:

Download the Multiple Payment Gateways eBook Below

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