Insights 11 August 2020

Payment Orchestration, a primer: what is it, and does your airline need it?

The digital payment ecosystem is complex, especially for airlines. Several factors are at play: consumers are continuously discovering and embracing new ways to pay for goods and services, while airlines typically have high volumes of cross-border transactions that require multiple acquirers and routing rules. Airlines must also reconcile their current payment needs with legacy payment systems that rely on sluggish third-party payment service providers (PSPs) to execute a payment strategy. If that isn't enough, there's an ever-expanding network of global payment regulations to navigate and the ever-present risk of fraud.

All of these moving parts must work in harmony. That is where the importance of payment orchestration comes in.

What is Payment Orchestration?

Payment orchestration is the act of unifying all components of a transaction under a single control layer. For cross-border merchants like airlines, this means integrating the right mix of regional and global payment partners (PSPs, acquiring banks) to optimise acceptance rates and minimize cost.

It also means automating back-end processes like settlement and reconciliation and incorporating fraud rules and regulatory compliance. Payment orchestration synchronises the flow of data and currency across channels and in concert with existing systems like reservation systems or loyalty programs and harmonises any differences in format.

Improving Payment Performance for Airlines and Passengers

The convergence of disparate systems and areas of their business gives airlines a comprehensive view of their payment architecture. It significantly reduces the time to market for rolling out new payment methods, as integrating a new method of payment (AMOP) no longer requires a redesign of an airline's entire payment ecosystem. And it’s also a crucial benefit as travellers in different markets have different payment preferences. Meeting customers' expectations in each region allows airlines to boost conversions and reduce abandoned transactions due to payment friction, or lack of available payment method.

The Intelligent Solution to Dynamic Routing

The other key benefit of payment orchestration is supporting intelligent routing. If airlines have a reliable payment orchestration platform, they can implement a multi-acquirer strategy, and dynamically route transactions to the optimal acquirer based on geographic location, interchange cost, and rate of acceptance. But without payment orchestration, airlines can be locked into static acquirer routing, or routing determined by a third-party payment gateway. Worse, they can erode their per-transaction profits by paying needlessly high fees for sub-optimal acceptance rates.

Other Benefits of Payment Orchestration

What payment orchestration also gives airlines is greater control and visibility into their payment ecosystem. It simplifies and modernises legacy payment systems and facilitates a truly omnichannel approach to payments. The right payment orchestration platform can reduce the total cost of ownership to the airline.

How to Implement Payment Orchestration

Airlines can build their own orchestration layer in-house, or cede control to traditional payment gateways. But these approaches are costly and time-intensive, requiring either significant upfront investment or acceptance of transaction rates set by third-parties.

Our Velocity Payment Orchestration Platform is the ideal solution for airlines to take back control of their payment roadmap, and quickly scale up their payment strategy through a single connection in just a matter of months.

Learn how CellPoint Digital can become your payment orchestration partner; get in touch with us here.