How Payments Orchestration Platforms are Helping Merchant Aggregators Scale

Revenue management platform, food delivery platform, and e-commerce platform. These are just some of the names commonly used by merchant aggregators to describe themselves.

But what really is a merchant aggregator, and why does it matter?

This article outlines what a merchant aggregator is, what their payment strategies and pain points are, and how payment orchestration platforms can help them.

What is a Merchant Aggregator?

A merchant aggregator is an online platform or business that aggregates other merchants. Aggregators provide a platform or space for other merchants to serve their customers through, helping their merchant customers expand into new markets, and process either payments, deals, or appointments.

A great example of how merchant aggregators work is by looking at an example of a food delivery platform.

Envision a road in New York that contains three restaurants, one is called Steaks, another is called Chips, and the last is called Burgers. Each of these restaurants would be considered a merchant. Hungry Jerry lives down the road and wants to buy from all three. Jerry would be considered the customer.

Hungry Jerry doesn’t want to have to call all three restaurants, so he heads to The Restaurants Collective to make his order online. The Restaurants Collective is an online website that has aggregated all three merchants, and by using it, Jerry can make his orders, pay, track his delivery, and leave a review all in one place.

The Restaurants Collective would be a merchant aggregator.

Merchant aggregators exist in a range of industries, and their functions can differ. For example, while The Restaurants Collective may be able to process payments and manage delivery drivers, another merchant aggregator, such as a gym scheduling platform, might only coordinate timetables between gyms and their customers, without actually processing the payments on behalf of the gym.

Why Do Merchant Aggregators Need Very Unique Payment Strategies?

The payment needs of merchant aggregators differ dramatically from those of merchants. For starters, their customers are the merchants, not the end users, which means their payment strategies need to attract both the merchants themselves and the end users.

Importantly, merchant aggregators require much greater payment flexibility. Let’s imagine The Restaurants Collective is approached by a new merchant, Lobsters, who wants to be onboarded onto their platform. Lobsters are a very large company, so would be bringing in a lot of revenue. However, Lobsters already have their own way of processing payments, which differs from how The Restaurants Collective processes payments.

So, The Restaurants Collective decides to go ahead and add Lobsters’ payments processor to their system. Which is fine. Until Tofu brings in a new method, and then Onions brings another, and so on until The Restaurants Collective finds their technology team can no longer ensure merchants are getting the preferred payment services they demand. Eventually, as the technology team finds they’re unable to fulfill the needs of the merchants, merchants start going elsewhere, and The Restaurants Collective stops growing.

This is a common example of how a payment strategy can make or break a merchant aggregator.

How Do Payments Orchestration Platforms Help Merchant Aggregators?

There are many, many ways payment orchestration platforms can help merchant aggregators. For starters, a payments orchestration platform helps merchant aggregators activate more payment services with ease, ultimately helping attract and support more merchants.

They also make it easy to onboard new merchants and users to the aggregator’s platform, as one CTO, Sanjay Garje found, when he used a payments orchestrator at his company, Ribbon. He stated:

“And in my mind looked I at [..] Spreedly [a Payments Orchestration Platform], the payment processing as that undifferentiated heavy lifting that I didn't want to do as a SaaS eCommerce platform because our success is how easy can we make it to onboard a new trade show or a new vendor”.

This is definitely a common feeling among platforms; the need to simplify and speed up onboarding, and the good news is, payment orchestration platforms can help.

Another way they can help is by reducing payment declines, which as the Chief Operating Officer of Supreme Golf, Ryan Ewers found when he leveraged a payment orchestration platform, helps merchant aggregators attract and retain more loyal customers, increase brand affinity, and build a more positive customer experience.

As Ryan put it:

“The worst-case scenario for us [is]: A person wants to book a tee time, the payment declines for whatever reason and they may never come back.”

Fortunately, since using Spreedly, a payments orchestration platform, he no longer has to worry about losing those customers.

Why Should You Choose Spreedly?

We’ve been helping a range of merchant aggregators, from Chargebee to Fonteva, lower their business risk, expand into new markets, and add exciting profitable payment services to their networks since we started back in 2007.

We support billions of global transactions and over fifty thousand businesses, ensuring we have an unmatched level of insight into your industry and how payment strategies can truly make an impact.

We’re a well-respected and trusted name in payments and are considered by many to be the leading payment orchestration platform today.

We understand the differences that make platforms so important in today’s age, which is why rather than a one-size-fits-all product, we’ve launched a set of completely unique solutions that specifically address the needs of aggregators, ensuring your merchants and their customers are happy.

But don’t take our word for it. We offer a trial account that includes unlimited test calls, so you can put us to work before committing. Create your account here to start today, or, reach out for a friendly chat.

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