At last week's MRC | Merchant Risk Council Payments Orchestration Summit, there were a lot of great presentations about the benefits of orchestration, but one stood out to me. In the middle of the hype train for one of the hottest topics in payments, one panelist was brave enough to stand up and say you know what, maybe this isn't for everyone. You could have heard a virtual pen drop.
And you know what? I tend to agree with him.
Let me explain.
It made me think back to a presentation my colleague Adam Vissing shared with us right after the TokenEx and IXOPAY Merger. The presentation was (slightly ironically) about 5 reasons not to use Orchestration. While most points were meant to make people reevaluate what we think of as the weaknesses of an Orchestration platform, it reminded me that at the end of the day, not every technology is perfect for every organization.
So, let's break down what's fact and what's fiction when it comes to using an orchestration platform.
Organizations must avoid single points of failure at all costs. In general, we in payments view SPOPs as bad news. But the fact of the matter is that no matter what we do, they cannot be avoided. If you build your own routing logic and PSP connections, YOU become your single point of failure. And whereas with a SaaS provider who provides SLA credits for downtime, any failure of a self-built system points in only one direction.
Reality: Fiction
I can just use my PSP. Almost everyone in the payments space has now branded themselves as an orchestrator. If you already have a relationship or connection to one of these companies, why not use them? While anyone can brand themselves as an orchestration company, not everyone has the ability to be agnostic in routing your payments. If your PSP already has local acquiring in a region, are they going to build a connection for you to route payments to their competition?
Reality: Fiction
I can build this myself: From the outside looking in, it may look pretty simple to build an orchestration platform. You have connections to PSPs and Fraud Service Providers, tools to ingest and unify reconciliation data, and dashboards to stick on top to view the data as a whole. While you can build these things, putting all the pieces together can be complicated, especially once you start to factor in things like PCI compliance. The reality is that while you can build parts of this yourself, trying to do the whole thing from scratch is a poor plan.
Reality: Some Fact, Some Fiction
At the end of the day, each organization is unique. You need to evaluate your payment processing independently of any market trends or hot topics. While orchestration is great for a ton of businesses, some should just start with a Tokenization Provider that helps remove PCI scope while still enabling multiple payment processors. Others may be able to use a single processor but need to decouple fraud prevention from payment processing to avoid a conflict of interest.
Chief Executive Officer at enovom | Founder | Investor | Advisor
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