Consumer, Merchant Appetite For Efficiency Drives 2nd Wave Of Payment Orchestration

Payments regulation can feel like a new entrant on to the global scene, given the sheer number of headlines it has suddenly started turning up in over the last few years. But the truth of the matter, Payoneer Chief Operating Officer Keren Levy told Karen Webster in a recent conversation, is that what we are actually seeing is the second phase of payment orchestration taking off worldwide.

Orchestration itself has been around for quite a while, but phase one was mostly invisible to most people, she noted. That’s because it was defined entirely by the in-house construction efforts of a handful of truly global industries, like airlines, that need to be able to smoothly move money through many jurisdictions.

The second phase going on now, said Levy, is defined by the growing number of merchants that have gone global and digital over the last 18 or so months. They are now realizing they need more sophisticated global payment solutions and are looking for partners to help build it for them instead of attempting to do it themselves. As Levy noted, global payments isn’t a simple business these days, as payment methods are seemingly growing by the day, and regulatory schemes in various jurisdictions can change — even more important for merchants to get their payments strategies right, which ultimately could impact revenue.

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“This is where the orchestration plays a role — in helping those merchants build something that intermeshes between the different providers and gives them some level of flexibility when they want to ride those trends of being more global,” she explained.

The Rising Second Wave

Integrating with payment service providers (PSPs) is difficult work that can take months — and second waves are rising quickly as merchants are getting through two, three or even more application programming interfaces (APIs) and realizing this isn’t something they want to be doing. Integrating, managing, updating and running payment infrastructures is an area that requires outside expertise from a third party.

But second-wave payment orchestration does more than eliminate the pain of self-orchestrating, said Levy — it also makes the process more informative and useful to the merchant deploying it.

“We offer the ability to see across different providers and have more control in terms of comparing between the different PSPs and understanding how well a specific PSP is performing,” she said. “And all of this gives the merchant the ability to make better decisions when creating a global payments setup.”

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Merchants may not want to have to hand-manage a host of PSP relationships and optimize them in-house, noted Levy, but they care very much about optimizing their payment setups as much as possible to maximize their completed conversions. A payment orchestration layer — and the advanced analytics and dashboards it introduces — allows them to simplify the number of relationships they have in a data-driven, maximally efficient way.

What’s Next

As for what is yet to come with the second wave of payment orchestration, Levy’s simple one-word answer was “growth.” The wave is rising, she said, but nowhere near cresting, as an increasing number of merchants all around the world are realizing that payment orchestration isn’t a “nice to have” for global merchants, but a genuine “need to have” in the modern global marketplace.

In terms of what it’s about, Levy expects to see it expand beyond reach into merchants. Risk management, she noted, is in many ways as fragmented as a global payment service between massive global and niche local players, and it’s another area where the move to consolidate and more smoothly route the experience for merchants would be genuinely valuable.

“We see this segment evolving toward being more inclusive of everything,” she said. “Everything that helps merchants optimize their setup and be more agile, to make better decisions on the experience they’re offering to their customers, while preserving the internal happiness of their teams on the back end.”