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    When Payment Orchestration Falls Short

    programmable vaulting

    The new wave of payments, often touted as Payments 3.0, gives merchants more control to unbundle payments from all-in-one payment processors. As merchants embrace this freedom, they’ll encounter some tough decisions on how to best achieve this.

    If they want to dynamically route payments, payment orchestration providers may be the first consideration. Should merchants expect these platforms’ promises to work as advertised? Or are there better-suited options available to them?

    The Promise of Orchestration

    Estimates suggest that the term “payment(s) orchestration” was first coined in 2018, likely by some full-service PSPs like Stripe. However, the process of “orchestrating” payments, or streamlining them through various providers and routes, dates back to the early days of e-commerce in the 2000s.

    While the waters may have muddied over the years as new players enter the game, payments orchestration is still a popular approach to payment optimization today. Most orchestration providers will make promises to merchants with solutions to major pain points, offering merchants flexibility, speed, and easy-to-use payment flows. 

    These providers claim to offer merchants:

    • Freedom to manage multiple connections - easy-to-use interfaces that provide a single location for managing connections
    • Redundancy - an easy solution to build in a backup processor that manages retries
    • Speed to add new partners and payment methods - quick go-live, sometimes with the promise of one-click or simple connections
    • Easy implementation of complex routing - a simple, flow-chart-esque interface for visualizing and managing complex routing rules
    • No development work - go live without the need for APIs, complex integrations, or a development team

    While these promises sound great for merchants of all sizes, the reality can look quite different from the ideals presented during sales calls and onboarding.

    Orchestration Realities: Where it Falls Short

    The reality for many merchants is that orchestration falls short of these big promises, as this utopian plan becomes complicated and overwhelming for many merchants. 

    Single-Point-of-Failure Threats

    A primary reason for implementing payment routing rules is to safeguard against payment failure, account shutdown, or PSP outage. By dynamically routing payments, merchants try to reduce single-point-of-failure issues by giving payment optionality. However, working with an orchestration provider with custom APIs simply moves the risk from one location to another. Should the orchestration provider have an outage, the routing rules, the connections, and the payment processing could all go down with it - all from a single outage.

    Inflexible Omnichannel and Partner Options

    Given just how vast the payment landscape truly is, it is impossible for payment orchestration platforms to offer connections to every payment partner a merchant may want. These platforms will often prioritize the highly sought-after PSPs and any partners they may have binding contractual agreements with. The sticking point is when a merchant needs to connect with a partner not offered in the preset “marketplace” of connections. Orchestration providers try to simplify adding connections, often by building custom APIs on the backend, which means that if the connection is not pre-built, it’s not an option. What once felt like it offered unlimited flexibility could raise a roadblock in growth for a merchant.

    Merchants Don't Need Complex Routing

    A huge myth in payments today is that merchants require complex routing strategies to optimize fees, flows, and revenue. However, most merchants want—and honestly, benefit from—a much simpler approach to payment optimization: the ability to integrate a backup processor. Complex routing rules become cumbersome, including multiple contracts with dozens of partners, when the ROI simply isn’t there to justify it. 

    High Costs for Large Volumes and Complex Routing

    For the more established merchants, perhaps the promises of orchestration truly resonate. They have the teams to implement a strong solution, and they want more complex routing rules for payments. What may come as a surprise, however, is the sticker shock of using orchestration platforms when processing large volumes of payments. These solutions often tout the opportunity for volume discounts, but may fail to mention that more complex routing rules (often most beneficial to use at high volumes) comes at an additional cost. If not through an add-on feature, then in the form of a higher-tiered plan. What was once scalable became unaffordable.

    Merchant Overwhelm

    All this fancy routing, logic, and advanced settings may sound exciting for more sophisticated merchants, but the vast majority of merchants don’t need - and won’t use - sophisticated features. They love the idea of everything it can do, but simply do not have the resources or desire to build complex orchestration. It is like buying a ticket to Disneyland just to get a churro - you likely won’t see a positive ROI leveraging such a small portion of the product (even with how good those churros happen to be!) 

    Programmable Vaulting: A Stronger Approach

    Merchants that want the ability to orchestrate—should their use case require it down the road—should first consider owning their data through a programmable payments vault. Vaulting can fill in the gaps where payment orchestration falls short and give merchants the power to manage payments their way.

    Solving The Most Challenging Part: Vaulting

    Vaulted tokens, especially those vaulted with a third-party tokenization provider like Basis Theory, offer secure collection, storage, and access for merchants. By owning the token, and keeping the underlying data in a non-proprietary location, merchants can use the provider to route sensitive data to the PSP of their choice, thus delivering the opportunity to optimize payment processes.

    If a merchant needs to store sensitive payment data and achieve PCI compliance, a token vault can meet those requirements. Securing cardholder data in a token vault with Basis Theory satisfies many PCI DSS requirements and provides companies greater control and flexibility over their payment stack. 

    Total Flexibility

    Unlike the flexibility touted by payments orchestration providers, programmable vaulting offers nearly unlimited flexibility for merchants. With some development resources, merchants can build their own custom flows to include any PSP or partner using all payment methods they would like. Instead of being locked into preset partners or strict routing rules that don’t suit them, merchants can vault payments in a third-party token vault and choose exactly how and where their payments go.

    Building in a backup processor, or building out complex routing rules is completely up to the merchant with solutions like Basis Theory.

    Continuous Commerce

    In lieu of moving a single-point-of-failure issue from one partner to another, Basis Theory can automatically send the sensitive card data to both a secure vault and the primary PSP for processing. Should that payment - or any future payment - fail, merchants can have a backup processor ready to receive the transaction without any disruption to the transaction flow. 

    Programmable Vaulting: Flexibility and Security

    As a PCI Level 1 compliant service provider, Basis Theory offers customers an independently assessed and approved CDE. With a suite of configurable tools, services, and tokens, companies can collect, secure, and share credit cards with any payments partners without bringing their systems into scope. This approach allows companies to avoid the costs and distractions associated with PCI DSS compliance while retaining complete control over their cardholder data.

    Contact us if you would like to learn how you can truly modernize your payments stack in a way that best suits your business needs.

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