Integrated payments transform complexity into simplicity by creating experiences that streamline customer’s payment interactions in support of your primary business. Serving as the backbone of your payment infrastructure, integrated payments drive profitability with pinpoint precision. Let’s take a look at the key components and benefits of integrated payments.
What are Integrated Payments?
Integrated payments generally refers to when payments are required in order to sell a customer something but the payment itself is not the main experience the merchant aims to deliver, rather playing a supporting role.
Integrated payments are like an ensemble of virtuoso musicians, each playing their part to perfection, culminating in a symphony, except the ensemble is nestled in the orchestra pit playing a supporting role of a ballet. The symphony rounds out the performance and is required for the experience but the ballet is the main attraction and focus of the patrons.
Like the seamless coordination between the conductor, the musicians, and their instruments, integrated payments bring together various elements of a transaction. From the customer's chosen payment method to the merchant's bank account, each element works in harmony to create a smooth transaction process.
How Do Integrated Payments Work?
Imagine an online video game streaming platform, "GameStream." GameStream is a platform that allows streamers to show themselves playing video games to viewers around the world. Viewers can subscribe and tip their favorite streamers. Viewers purchase streamer merchandise directly on the platform and have it shipped to their home. The seamless integration of integrated payments behind the scenes of the ‘Pay’ button facilitates the viewers' experience in the platform - not the other way around.
As viewers click 'Pay', order details and payment information begin a complex and secure journey. The beauty of the integrated payments solution is all of the complexity is hidden neatly behind the click of a button to access the player’s upgrade.
Here's an example of a payment flow with a breakdown of what happens when a consumer makes a purchase:
- Entering Payment Information: You enter your credit card details into the online form at checkout, providing your card number, expiration date, CVV code, and billing address
- Transaction Authorization: Once you click "Purchase," the online store's payment gateway captures this information. The data is tokenized and sent to the payment processor, which acts as a bridge, forwarding the payment details to the credit card network
- Bank Communication: The credit card network then passes this information along to your issuing bank such as Chase. Your bank verifies the transaction, checking the purchase amount against your available funds, and validating security measures Then, it sends back a response — either approving or declining the transaction.
- Transaction Completion: This response is sent back along the same route — from your bank to the credit card network, then to the payment processor, and finally to the online store's payment gateway. If the transaction is approved, the gateway communicates with the online store's website, finalizing the sale and triggering a confirmation page or email to be sent to you.
Enhance your subscription service by enabling integrated payments. Learn more about configuring a seamless, optimized payment experience.
How Payments Orchestration Benefits Integrated Payments
Payments orchestration plays a crucial role in enabling and optimizing integrated payments, essentially acting as the conductor in the "orchestra" of an integrated payment system. It offers a way to manage multiple payment providers, routes, and methods within a single platform, leading to increased flexibility and reliability in handling transactions.
Let's consider our fictitious video game streaming platform, "GameStream." GameStream utilizes an integrated payments system to offer its users a seamless payment experience. However, as GameStream wants to expand its subscription-based service to new markets globally, it faces challenges in managing various payment methods preferred in different regions. This is where payments orchestration comes in.
Enabling Global Reach
Through payments orchestration, GameStream can effectively integrate a variety of local and alternative payment methods into its existing integrated payments system. For instance, users in Europe might prefer to pay through SEPA direct debit, while users in China might favor Alipay. Payments orchestration allows GameStream to cater to these differing preferences, thereby enhancing the user experience within its integrated payment environment and boosting subscription users.
This type of payment flexibility will soon become a necessity for many organizations. According to Statista there are 2.8 billion active mobile wallets with half of them being outside of the United States.
Enhancing Transaction Success Rates
Payments orchestration can also enhance transaction success rates within an integrated payments system. As GameStream expands, it might experience increased transaction failures due to various reasons like gateway outages or soft declines. Payment orchestration can help manage these scenarios effectively within the context of integrated payments.
In the event of gateway outages, the orchestration layer can immediately shift traffic to alternative routes, ensuring the seamless transaction experience provided by integrated payments remains uninterrupted.
For soft declines, the system can retry the transaction through a secondary gateway integrated into the payment system, potentially turning a decline into revenue.
Customizing Payment Routing
Payments orchestration also allows GameStream to customize its smart payment routing based on a diverse set of criteria within the framework of its integrated payment system. For example, it can route payments based on:
- The preferred payment method
- The geographical region of the user
- The size of the transaction
This rule-based routing can help GameStream optimize its payment architecture across geographies and transaction types, further enhancing its integrated payments experience.
For GameStream, and indeed any platform looking to optimize its subscription service and expand globally, payment orchestration can be a game-changer in the realm of integrated payments. It offers the ability to manage multiple payment methods and gateways, enhance transaction success rates, and customize payment routing, all within the framework of an integrated payment system.
Ready to optimize integrated payments? Contact Spreedly today for the ultimate payment orchestration solution and level up!