Online retailers are increasingly adopting advanced solutions to optimize their payment flows and enhance customer experience. One such solution is payment orchestration, which involves optimizing transactions by automatically determining the best route for each payment. This process not only improves approval rates but also reduces common errors in card payment processing.

Let's delve deeper into what orchestration entails and how it can help businesses boost their conversions.

How payment orchestration increases conversions and reduces errors

How do card payments work?

To sell online, merchants must connect to a card processor (like Redsys, Cecabank, etc.) or a PSP (like Stripe, Adyen, etc.).

Once the processor or PSP is integrated, when a customer makes an online purchase and chooses to pay by card, a process comprising several stages begins:

1. The customer enters their card details on the payment screen.

2. The information is sent to the selected processor or PSP, which processes the transaction and sends the request to the card-issuing bank.

3. If everything is correct, the transaction is authorized, and the merchant receives a payment confirmation.

Although this flow seems simple, failures can occur at any stage. This is where payment orchestration comes into play to optimize the process.

Why do card payments fail?

Payments can fail for various reasons, but there are three main categories:

1. Customer-related errors:

   • Insufficient funds.

   • Incorrect data.

   • Expired or blocked card.

2. Issuer bank-related errors:

   • Blocks due to suspected fraud.

   • Card not enabled for certain regions or countries.

   • Technical failure in the bank's systems.

3. Processor or PSP-related errors:

   • Transaction limit exceeded.

   • Technical rejections.

   • Security rejections: processors also analyze the operation and may reject it due to suspected fraud.

These errors lead to significant revenue losses and create a negative experience for the customer making the purchase, resulting in a loss of trust and potential future sales.

In this article, we take a closer look at other reasons why a buyer might abandon their cart during the checkout process.

How can payment orchestration help?

Payment orchestration can recover between 5% and 20% of failed transactions.

Orchestration addresses many of these errors through a routing system.

This system selects the most suitable payment processor for each transaction and, in case of failure, activates backup mechanisms. These mechanisms, known as fallbacks, are automatically triggered when the primary system fails, allowing the transaction to be completed through another pre-configured route.

Example of an internationally operating merchant:

Imagine a French online retailer operating in several countries and working with three different card processors to leverage the advantages of each.

One is a local processor in France, offering very good costs. They also work with an international PSP that has higher costs but a better authorization rate for European cards issued outside France. As a third option, they have a local processor in the USA, offering a higher authorization rate for cards issued by French entities.

The merchant decides to set up a rule to automatically route transactions with French cards to the local processor to ensure a higher probability of success and lower costs.

If the transaction is not authorized, for example, due to technical problems, Zru's system activates a fallback and resends it to another processor (the one chosen by the merchant as a second option), which could be the global PSP specializing in international cards.

This orchestration maximizes collection opportunities, minimizes errors, and manages to recover between 5% and 20% of failed transactions.

Learn more about payment orchestration in our post: What is payment orchestration and how does it help your online business?

How to set up payment orchestration?

Setting up orchestration with Zru is very simple and requires no code or development, granting full independence to the team managing payments:

1. Activate the processors or PSPs you wish to use from the "Connections" section.

2. Zru supports more than 15 processors, such as Stripe, Adyen, dLocal, Nuvei, and WorldPay.

3. Define routing rules from the "Orchestration" functionality. For example, decide, based on the card's country of issuance, the primary processor and the fallbacks.

4. Add secondary processors in case the primary one fails.

5. Adjust and optimize the rules according to your business needs.

Advanced features of payment orchestration

In addition to resolving processing errors, orchestration offers advanced options that allow:

• Routing based on the card's country of issuance: For example, sending Spanish card transactions to a processor with lower fees, and U.S. cards to another.

• Routing by card brand: Some processors accept Visa and Mastercard, while others handle American Express or local brands.

• Configuring rules by issuing bank: Leveraging processors with more competitive rates for cards issued by certain banks.

• Optimizing by card level: Specific routes for Business, Corporate, etc., cards that have variable costs depending on the processor.

• Splitting transactions by percentage: Sending part of the operations to one processor and the rest to another to diversify risks or meet commercial agreements.

All these functions are easily performed with Zru, as no technical knowledge is required. Additionally, our team constantly supports our clients and their financial and payment teams during the configuration and optimization of orchestration.

Advantages of payment orchestration

Payment orchestration offers multiple benefits to online merchants and businesses:

• Higher approval rate: Increases the success rate of transactions by routing payments to the most suitable processor.

• Recovery of failed transactions: Thanks to fallbacks, between 5% and 20% of initially rejected payments can be recovered.

• Cost reduction: Orchestration automatically executes the most economical processor depending on the card type, region, or level, which can reduce payment-related costs by up to 25%.

• Scalability: Platforms like Zru facilitate the use of new processors to operate in different regions quickly.

• Simplified management: Centralizes the configuration and monitoring of payments in a single panel, reducing dependence on the technical team.
  
  

In summary, implementing orchestration not only allows for the recovery of card processing errors, thereby increasing conversions, but also reduces the costs associated with payment operations.

Zru transforms payment management into an efficient and hassle-free experience, enabling merchants to focus on what truly matters: their customers.

Feel free to contact our sales team for guidance on payment orchestration and management for your business.

In summary, implementing orchestration not only allows for the recovery of card processing errors, thereby increasing conversions, but also reduces the costs associated with payment operations.

Zru transforms payment management into an efficient and hassle-free experience, enabling merchants to focus on what truly matters: their customers.

Feel free to contact our sales team for guidance on payment orchestration and management for your business.