Mastering Payment Orchestration vs. Payment Gateways: A Comprehensive Guide

Online payments have become a fundamental part of modern businesses. Whether you are a small start-up or a large corporation, having a secure and reliable payment system is crucial for your success. Business needs to find ways to make payment processes easy and convenient for customers as online shopping and e-commerce continue to grow. Here payment solutions such as Payment Orchestrator and Payment Gateway come into play. The two terms are often used interchangeably and offer different benefits and features.

In this blog post, we will explore the differences between Payment Orchestrators and Payment Gateways, and help you understand which one is right for your business. So, let’s dive in!

What is a Payment Gateway?

A payment gateway is a technology that enables merchants to accept electronic payments from customers through their website or mobile application. It acts as a mediator between the merchant, the customer, and the financial institutions involved in the transaction.

A payment gateway securely sends the customer payment information to the appropriate financial institution and receives authorization or rejection of the payment.

How Payment Gateways Work?

When a customer decides to make a purchase, they will be redirected to the payment gateway’s secure server to enter their payment information. This information is then encrypted and transmitted to the appropriate financial institution, such as a bank or credit card company, for authorization.

Once the payment is approved, the merchant receives the funds from the customer’s account. The entire process typically takes just a few seconds.

What is a Payment Orchestrator?

A Payment Orchestrator is a more comprehensive payment solution that provides a single interface to manage multiple payment methods, gateways, and financial institutions. The payment orchestrator streamlines the payment process by optimizing the payment routing and providing a single point of reconciliation for all payment transactions.

Payment Orchestrators are designed to simplify the payment process for merchants and enhance the customer experience by providing a range of payment options and reducing the complexity of managing multiple payment systems.

How Payment Orchestrator Works?

Payment orchestrator works by providing a single unified payment API to the merchant’s website. When a customer makes a payment, the payment orchestrator receives the payment request and routes it to the appropriate payment gateway. The Payment Orchestrator then receives a response from the provider and forwards it to the merchant to complete the transaction.

The payment orchestrator also manages the payment reconciliation process by providing a single point of settlement and reconciliation for all payment transactions.

Significance Of Payment Orchestrator

Payment orchestrators have become a crucial aspect for businesses in the rapidly evolving digital landscape. As per a market analysis report, the payment orchestrator platform market was worth USD 1.13 billion in 2022, and it is projected to grow at a compound annual growth rate (CAGR) of 24.7% from 2023 to 2030, highlighting its increasing significance.

This significant growth indicates that more and more businesses are recognizing the benefits of payment orchestration.

Why Payment Orchestration is a Must-Have for Businesses.

1. Multiple Payment Gateways

Payment orchestrators allow merchants to use multiple payment gateways, which gives them greater flexibility and control over the payment process. This can be especially useful for businesses that operate in multiple countries or want to offer a wider range of payment options to their customers. Moreover, by using multiple payment gateways, businesses can provide their customers with more flexibility in how they choose to pay, which can lead to higher customer satisfaction and increased sales.

2. Streamlined Operations

By simplifying the payment process and providing a single interface for managing payments, payment orchestrators can help businesses save time and resources. They can automate many of the manual processes involved in payment processing, such as reconciliation and reporting, freeing up staff to focus on other important tasks.

3. Improved Customer Experience

By offering a variety of payment methods to customers, including credit and debit cards, bank transfers, e-wallets, and more, payment orchestration can help improve the overall payment experience. This can lead to higher customer satisfaction, increased loyalty, and ultimately, more revenue for businesses.

4. Cost-Saving

Payment orchestrators can be more cost-effective for businesses than using multiple payment gateways separately. This is because payment orchestrators often negotiate better rates with payment gateways, and can provide businesses with a single, consolidated bill for all their payment processing needs.

5. Unified Reporting

Payment orchestration enables businesses to view all payment-related data in a single dashboard, making it easier to analyze and gain insights into payment operations. Additionally, payment orchestration platforms usually provide businesses with customizable reporting options that allow them to generate reports based on specific metrics such as payment methods, transaction volumes, and revenue.

6. Simplified Reconciliation

Payment orchestrators provide merchants with a single, unified platform for tracking payments and reconciling accounts across multiple payment gateways. This helps to simplify accounting processes and save time and resources.

7. Enhanced Security

Payment orchestrators offer enhanced security features such as fraud detection and prevention, encryption, and tokenization. This helps to protect sensitive customer data and prevent fraudulent transactions.

8. Flexibility & Scalability

Payment orchestrators are designed to be flexible and scalable, which means they can easily adapt to the changing needs of businesses as they grow. They offer customizable features and can integrate with a wide range of third-party platforms, making it easy for businesses to expand and add new payment methods and gateways as needed.

9. Improved Cash Flow

Payment orchestrators can help businesses improve their cash flow by providing faster settlement times and reducing the risk of payment failures. They can also offer features such as automatic billing and recurring payments, which can help to ensure a steady stream of revenue.

10. Global Expansion

Payment orchestration supports multiple currencies and payment methods, which can help businesses expand globally. By enabling businesses to reach new markets and customers, payment orchestration can support growth and revenue objectives.

Payment Gateway vs. Payment Orchestrator — Key Differences

Functionality and Features

• Payment gateways offer a single payment solution, while payment orchestrators provide a unified interface for managing multiple payment gateways and methods.
• Payment gateways are focused on facilitating the transaction between the merchant and the financial institution, while payment orchestrators are focused on simplifying the payment process for merchants by optimizing payment routing and providing a single point of settlement and reconciliation for all payment transactions.

Payment Processor Integration

• Payment gateways are typically limited to working with a single payment processor, while payment orchestrators can work with multiple payment processors and providers.
• Payment gateways often require separate integrations for different payment methods, while payment orchestrators provide a unified integration for multiple payment methods.

Flexibility & Adaptability

• Payment orchestration platforms provide a more integrated and optimized payment infrastructure that can adapt to changes in customer preferences, security requirements, and emerging payment types.
• Payment gateways typically have limited flexibility and may not be able to keep up with changes in the payment landscape.

Costs and Revenue Optimization

• Payment gateways may have lower upfront costs, but may charge higher transaction fees and may not offer revenue optimization tools.
• Through intelligent payment routing, payment orchestrators can optimize revenue through lower transaction fees and reduce payment processing costs.

Settlement and Reconciliation

• Payment gateways require merchants to manage settlements and reconciliations with multiple payment providers, which can be time-consuming and error-prone.
• Payment Orchestrators provide a unified interface for settlement and reconciliation, simplifying the process and reducing the risk of errors.

Suitability for Business Types

• Payment gateways are more suited for smaller businesses with simpler payment needs, while payment orchestrators are more suited for larger businesses with more complex payment needs.
• Payment gateways may have limited scalability, while payment orchestrators offer more scalability and flexibility.

Related Post: How a Payment Orchestrator Boosts E-Commerce Revenue?

Why Paytring’s Orchestrator is the Ultimate Solution for Seamless Payment Processing

Paytring’s orchestration solution offers a comprehensive suite of features to streamline payment management and ensure seamless payment processing.

Here are some of its powerful features:

Rule Engine

Paytring offers flexible payment gateway integration and enables businesses to customize payment routing rules based on their specific requirements. Merchants can easily set up customized rules for devices, methods, amounts, and more to ensure the most efficient transaction routes. Additionally, the paytring orchestrator allows businesses to hide payment methods they do not wish to display to their users.

Cascading

Paytring offers cascading features that help businesses minimize the impact of payment failure and ensure that transactions are completed successfully. This feature reduces the risk of lost revenue and dissatisfied customers, while also minimizing the workload on businesses by automating the payment process and eliminating the need for manual intervention.

Bottomline

Payments are no longer a burden for your business. In fact, with the right approach, payment experiences can help differentiate your business, increase revenue, and build customer loyalty.

Our single API offers end-to-end visibility into payment processing, faster time-to-market for new payment methods, and easy integration with new acquirers or backend processes, making payment management effortless. Moreover, it enhances the customer experience by simplifying the payment process.

So why wait?? Contact us today to learn more about how a payment orchestrator can benefit your business. To learn more about how Paytring can help your business, you can visit our website.