According to Groupe BPCE data, 7 of France's top 10 e-commerce sites have implemented a multi-PSP strategy1 that requires payment orchestration.
A historical trend among large merchants, this strategy tends to develop throughout the e-commerce market.
The main reasons:
- Optimise investments and resources
- Improve the shopping experience, thus increasing conversion and acceptance
- Maximise the chances of success through agility in the checkout process
- Access a wide range of services, features and payment methods
- Ensure the continuity of payment transactions
To understand the benefits and operation of payment orchestration, we interviewed Bénédicte Brie and Giuseppe Serra, Heads of Partnerships at Payplug, to share their expertise.
Payplug was able to adapt to this development very early on and has partnered up with the most prominent POPs (Payment Orchestration Platforms) in the European economic markets.
What is payment orchestration?
The world of payment is increasingly complex due to its diversity: multiplication of actors, payment methods,...
Payment orchestration simplifies the operation by centralising the management of several acquirers and banks via a single software layer. This process optimises the purchasing experience and the processing of payment data.
The entire payment processing is handled through a single entry point, thanks to the centralisation of transaction data and routing rules, for transactions to be directed towards the most efficient service to maximise acceptance.
In concrete terms, how does the payment process work?
The process takes place in a few seconds and is transparent for the consumer.
When it comes to payment performance in the context of orchestration, Payplug stands out from the crowd:
« Payplug's proactive approach around the topic of orchestration demonstrates a deep understanding of the market and merchants' needs. Payplug's expertise, combined with the quality and commitment of their teams, directly impacts the performance of merchants.»
Jérémy Lejoux - Cofounder & Head of Merchant Experience - ProcessOut
How to set up a payment orchestration?
Payment orchestration is nothing new: large merchants managing high volumes of transactions generally already have internal systems in place to evaluate payment performance and route transactions.
What has changed is the arrival of specialist third-party players who offer merchants the ability to benefit from a turnkey solution that may be more advantageous.
Live orchestration management
With internal orchestration, payment management is done directly by the merchant by routing payment flows to several PSPs. The merchant sets up an API connection with each payment provider and looks for the added value specific to the various PSPs that he wishes to implement: payment method, acceptance performance, geographical area, etc.
The real challenge of this management is the investment in terms of integrations. Indeed, to respond to all of the issues raised by multi-PSP management and to achieve its objectives, merchants need to have a payment team capable of administering and monitoring these different connections.
Management via a Payment Orchestration Platform (POPs)
Unlike direct management, this one relies on a trusted third party: Payment Orchestration Platforms (POPs).
From a siloed management, POPs allow moving to agile and unified payment management: the merchant delegates the orchestration of payments and performs a single integration via a single API. POPs thus take on the role of facilitator by reducing integration complexity.
This model also puts the consumer at the centre of the strategy by providing the best shopping experience. The orchestrator seeks to address the most value, whether it's service, fraud or any other indicator of the payment ecosystem: the right PSP, at the right time with the right payment methods.
Orchestrators can dynamically direct the payment flow, via rules defined between the POPs and the merchant, to direct it towards the most efficient routing. The data is then processed and analysed in a unified way by the payment orchestrator, allowing the merchant to easily monitor their KPIs and adopt the best strategy for their needs.
For example, POPs that integrate Payplug offer the benefits of a unique connection protocol called FastPass. It enables them to obtain up to 98% of accepted frictionless requests linked to cards issued by Groupe BPCE2, i.e. 20% of French traffic.
What are the concrete benefits of payment orchestration?
Optimisation of payment performance
As mentioned earlier, one of the first benefits of payment orchestration is its integration into the payment ecosystem. It allows merchants to benefit from the strengths of different payment providers depending on the need: availability of certain payment methods, certain currencies, local acceptance performance,...
At this level, it is possible to distinguish three advantages offered by POPs through the use of data:
- Dynamic orientation of flows to seek continuous performance
- Consolidation and standardisation of data processing to improve the performance of its payment management strategy (for example, enabling merchants to obtain a unified view of the performance of their PSPs).
- Hyper-personalisation of the shopping experience by adapting payment methods and methods pushed to consumers according to each situation*.
In addition to offering the best in every situation, payment orchestration stands out above all for its agility in the payment path to maximise the chances of success by dynamically redirecting refused payments to an alternative solution.
In this way, payment acceptance and the resulting conversion are continuously optimised.
Cost reduction
In addition to optimising payment performance, orchestration can become a cost-saving lever.
Indeed, beyond avoiding the costs generated by the direct integration of each PSP, a POP allows prioritising payment methods and/or acquirers on a local market to benefit from the best commercial conditions.
Financial reconciliation
POPs also provide a unified view of all payments by aggregating payment data. This simplification of accounting entries facilitates the work of the teams responsible for managing payments.
How does Payplug fit into this ecosystem?
As a PSP and acquirer, Payplug is an established player in the French and European payment ecosystem.
- A unique connection with Groupe BPCE: this advantage allows us to have expertise in the French and European markets which we use to improve our clients' performance.
- A high acceptance rate on the market: 97% acceptance of frictionless transactions for all issuers (in 3DSv2)2.
- A strong partnership strategy: we want to offer merchants the possibility of accessing our services regardless of the payment management chosen: directly via our API or via payment orchestration platforms. To achieve this, we collaborate with strong players in the payment ecosystem, such as ProcessOut and UpStream Pay.
Quickly improve your conversion rate across Europe with our integration into orchestration platforms:
If you want to benefit from Payplug’s expertise in performance:
1. Payplug 2023 data
2. Payplug 2022 data
* “Smart checkout” is a feature offered by various POPs but is not widely available.
