16 November 2022

Front-end payment orchestration's power to change the checkout experience

Global online retail sales are set to exceed seven trillion U.S. dollars by 2025. Yet today’s merchants may struggle to capitalize on this as nearly 1 out of 5 shoppers abandon cart due to a long or complicated checkout process. That, combined with the fact that many merchants have not updated their payments systems in the past two years, leads to an inability to optimize the customer checkout or orchestrate payments, leading to low conversion rates.

Merchants with a global footprint are aware that each customer has their own preferred payment method, and many will abandon a transaction and head elsewhere if they meet too much friction at the checkout. According to research from GoCardless, across all payment methods globally, the top three reasons consumers choose their preferred payment method are: easiest to use (56%), payment will be taken automatically (42%), and that their payment method is commonly accepted by most or all of the businesses from which the consumer makes a purchase (35%). 

The checkout: The make or break stage of transactions

Payment orchestration platforms (POPs) are known for their ability to assist merchants with improving the checkout experience at the back-end. Merchants can introduce increased payment optionality to cater to ever-evolving customer payment preferences and stay compliant to a range of data and regulatory requirements in local markets without eating into engineering and technology resources. 

For merchants without a POP, relying on a single payment provider or juggling multiple providers that are not integrated with each other can be an easily avoided headache. An orchestration layer - whether it is outsourced or built in-house - optimizes payment processing at each stage of the payment flow for online transactions, minimizing the number of failed transactions due to technical issues and allowing merchants to save costs. 

Download the free whitepaper, ‘Cracking open the payments orchestration layer’ from Retail Payments Global Consultancy Group (RPGC) to read about developing a POP in-house from scratch

Preferred payment orchestration platforms to the front

In addition to back-end orchestration which covers transaction routing to optimize for a variety of outcomes, including fraud prevention and authorization rates, among others, POPs can also orchestrate the front-end checkout experience. That is, everything a merchant’s customer sees throughout their experience with the checkout, offering a merchant the ability to dynamically filter and order payment methods offered to individual customers at the checkout based on the content of a shopping cart or preferences based on previous transactions. 

For example, if a merchant is working with a payment processor through a payment orchestration platform that prohibits the purchase of certain products, such as alcohol and tobacco, metadata about the contents of the shopping cart can be passed to the POP who can ‘hide’ that specific processor from the customer at the checkout and push an alternative method forward, keeping both merchant and processors happy and compliant. 

Likewise, if a customer has expensive electronic products in their cart, they might be a good candidate for alternative payment methods such as ‘buy now, pay later’ or open banking, so a merchant can set a rule based on transaction value (for example, $1,000+) to offer a provider for that method, such as Klarna, Trustly or Vyne, as “first” in the order of payment methods displayed to the consumer.

No two customers are alike and not all POPs are created equal

With an orchestration layer or platform that optimizes both the front- and back-end, merchants can create a checkout experience that will delight their customers. Positioning semi-personalized payment methods depending on purchases in front of consumers, in addition to plenty of options for the consumer to select depending on their preferences, can be as easy as one click. 

In addition, the recent federal reserve debit card regulation will allow merchants in the US to benefit from increased conversion rates, lowering risk, and lower processing costs. Using orchestration allows merchants to take immediate advantage of cost based routing and optimize over time with intelligent data insights with zero costs and time to deliver to their organization.

With an orchestration layer or platform that optimizes both the front- and back-end, merchants can create a checkout experience that will delight their customers. Positioning semi-personalized payment methods depending on purchases in front of consumers, in addition to plenty of options for the consumer to select depending on their preferences, can be as easy as one click. 

This article first appeared on Digital Transactions