Breaking Stories

Deep Dive: How Payments Orchestration Can Reduce eCommerce Platforms’ Merchant Integration Challenges

eCommerce has become many customers’ new normal when it comes to shopping, with the online shopping market hitting $10 trillion in value last year amid social distancing and stay-at-home orders that slowed brick-and-mortar retail to a crawl. It has been a huge boon to eCommerce platforms such as Amazon, Etsy and Rappi, which have seen waves of merchants looking for a platform to manage their storefronts.

This influx of new merchants also has proven to be a challenge, however, especially when it comes to integrating with those merchants’ payments infrastructures, which can be a major obstacle for eCommerce platforms. Doing so often involves integrating several payment platforms and gateways, tapping one or several application programming interfaces (APIs) to enable those integrations.

eCommerce platforms looking to add new sellers to their services easily could find themselves overwhelmed by the time, complexity and costs involved in implementing and managing so many integrations at once. However, these platforms can greatly reduce this burden by leveraging payments orchestration platforms. The following Deep Dive explores how payments orchestration platforms can simplify merchant onboarding and the challenges these tasks often entail.

How Payments Orchestration Improves Merchant Onboarding

eCommerce platforms often find the best way to onboard new sellers is to leave technical problems in the hands of external experts. Payments orchestration providers use their own software to collate various back-end gateways and integrate with merchants’ payments stacks through a single API.

This frees eCommerce platforms’ staff to devote themselves to improving the customer experience, rather than handling technical matters. Payments orchestration can accelerate merchants’ time to market, allowing virtual storefronts to run in a fraction of the time they otherwise might need, which also allows eCommerce platforms to more quickly earn revenue from their merchant partners.

The benefits of payments orchestration also extend beyond the merchant onboarding process. Payments orchestration providers also can offer advanced services such as smart routing. Smart routing takes a data-driven approach to match payments with the payment gateways that might yield the highest transaction success rate, reducing the risks of false positives and reducing a platform’s overall operating costs. Payments orchestration provider Spreedly notes that smart routing can improve payments authorization rates by up to 5%, which can equate to millions in annual sales.

“Those 5% [authorization] lifts are terrific from a revenue perspective,” said Clay Hefner, senior product manager at Spreedly. “But those extra authorizations are associated with real people, and those people are now happy with your service because the credit card went through correctly. That long-term revenue — plus the brand impact — is pretty significant.”

This usage of payments orchestration is a far superior method of merchant onboarding than traditional tactics, which leave much to be desired.

Challenges in eCommerce Merchant Onboarding

Without the use of payments orchestration, onboarding new merchants can be daunting. Historically, eCommerce platforms wishing to integrate new merchants required dedicated IT teams responsible not only for the onboarding itself, but also for integrating each merchants’ existing payments stack into the platform’s overall infrastructure.

This can delay merchants’ time to market, and both merchants and their hosting platforms can feel pains as a result. Merchants must wait longer before selling their products to eager customers, and eCommerce platforms tie up their IT resources in a complicated process with no immediate revenue gain.

“When a seller gets started on a new marketplace or platform, it is generally a time-consuming and painful process,” said Jonathan Peacock, CEO of eCommerce marketplace Zibbet, in an interview with PYMNTS. “Some sellers have told us that it has taken them up to a month to get all of their products listed onto a new platform. We knew it was important that we streamline this process to make it faster than ever before to get started.”

Slow merchant onboarding can also cause a variety of downstream issues. Each merchant’s payments stack has its own analytics tools and data definitions. Without a unified IT infrastructure that can integrate with each individual sellers’ payments stacks, eCommerce platforms might not be able to capture the data they need to improve their overall payments operation. Implementing payments stacks a la carte also can increase the risk of fraud, requiring even more time and personnel to predict bad actors’ methods and develop countermeasures for them.

Thus, many eCommerce platforms are finding that the best way to streamline the merchant onboarding process is to utilize a third-party payments orchestration provider. It can streamline the process and accelerate the time to market while also providing a much smoother and more efficient payments experience than could ever be achieved otherwise.

What is your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *