Payment orchestration: Businesses global tool to increasing revenue

By Nikhita Hyett, EU MD of BlueSnap

Globalisation has brought businesses and consumers closer together; however, to truly capitalize on this market opportunity, businesses need to think globally and act locally. We increasingly see the benefits of payment localization, with businesses achieving a 12% increase in revenue by simply offering local currencies.

Global payment capabilities fall under the wider offering of payment orchestration – ​​a strategy that allows businesses across sectors to integrate and manage the whole payment process from beginning to end, including payment authorization, transaction routing, and settlement reconciliation. This is a growing solution where all the elements of an international payment process are orchestrated through one interface, optimising businesses’ payment procedures.

This is an essential tool for businesses to increase revenue and reduce costs. But how can they actually achieve this?

Integrate not innovate

Every foreign market has its own unique needs that influence how shoppers pay. That said, businesses need to take note of the fact that end users – be it consumers or other businesses – want to feel secure and have that sense of familiarity when they make a purchase. To achieve this, payment trends in various areas can be taken advantage of through two crucial strategies: local acquiring and local payment methods.

For example, the Dutch payment method, iDeal, is used by over half the Dutch population with 99 million iDeal payments made via non-Dutch websites. By offering IDeal, international businesses are able to convert Dutch customers. Offering local payment methods increase conversation rates, and decreases the number of checkout amendments for local customers. Businesses don’t need to create the latest payment technology themselves, they simply need to partner with payment providers to help them integrate local payment methods, to reassure global customers.

In addition, when it comes card payments, local card acquiring is essential. This is when local payments are processed through their local region. For example, local acquiring would enable a UK business with an entity in the US to process transactions from US cardholders through their US entity – helping the business to not only avoid cross-border fees but increase authorisation rates and conversions.

Localising the customer experience also gives businesses the opportunity to reduce and better handle chargebacks as there will be no confusion on the shoppers bank and card statements..

In short, if businesses want to guard against checkout abandonment and post-purchase disputes when expanding globally – ie increase sales and reduce costs, they must process their transactions locally and adapt to the local payment preferences.

Everyone wins with embedded payments

Another key element of payment orchestration is embedded payments – i.e. the ability to embed payment processing into a financial or non-financial brand’s existing software. This enables businesses to accept payments through their own applications and systems rather than via a separate product or provider.

The embedded payments market is estimated to be worth more than $7 trillion in the next ten years – and it’s already bringing about benefits for businesses and their customers alike.

For businesses, this opens up new revenue streams by enabling them to monetise payments and offer new products and services to their customers directly, rather than through clunky ‘bolt ons’ and third party websites that direct customers away from their own channels.

For customers, it provides a frictionless user experience and faster checkout. Embedded payments not only enable customers to buy products and services from sellers in a single, easy-to-use platform, but also purchase financial services from traditionally non-financial brands.

Embedded payments is already transforming a number of non-financial industries. For example, in the education sector, software firms like VeraCross are helping schools get paid quicker by optimising the payment experience and giving end users more ways to pay. This enables higher education establishments to offer one central location for tuition fees, school shop purchases and donations – monetising these payments for schools and offering convenience for busy students. That said, embedded payments is only one element of payment orchestration and for businesses to reap the full benefits of this strategy there must be a total haulover where payment orchestration is at the heart of every checkout experience.

Slashing costs through payment efficiencies

The last pillar of payment orchestration are for those making B2B payments and transactions – the process of automating the accounts receivable (AR) process.

Automation allows businesses to transform arduous AR processes into an optimised, efficient and cohesive process. This process is key to increasing revenue as businesses need to keep their overheads front of mind.

Those who have looked inwards have found that they can get paid on time if they optimise their invoice and billing procedures. In fact, 89% of businesses who have automated their accounts receivable (AR) processes are now being paid on time because it removes the risk of human error. This improved efficiency relieves AR teams of arduous tasks and manual processes, allowing them to focus on providing great customer service.

As AR teams get more time to focus on helping people rather than chasing them, we see an uptick in productivity. Based on our research, boosted productivity translates into a 67% increase in customer satisfaction and a 56% improvement in customer retention.

Orchestrating a better future for businesses

Payment orchestration increases a business’ profit-generating capabilities by optimising payment processes. And, if you believe the payment experience has nothing to do with bottom line, you couldn’t be more mistaken.

By organising all aspects of the payment processes into one location, businesses can focus on their core competency while bringing in passive income. From local payment types to embedded payment experiences and AR Automation, businesses are one step closer to increased profits as a result of payment orchestration.