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As payment processing has become increasingly complicated, so have the payment ecosystems that businesses require. Enterprises must build their payment stacks to manage a complex web of connections and tools – which can lead to increased costs, burdened internal IT teams and potential gaps in security.ÌýÌýÌý

In this blog post, we’ll cover the three main types of payment ecosystems and give you a checklist that you can use to compare which solution is the right one for you.

A Quick Snapshot of the Payment Processing LandscapeÌý

From credit card transactions and alternative payment methods (APMs) to acquirers, issuing banks, and a dizzying array of providers – the complexity of payment processing can be overwhelming.Ìý

It wasn’t always this way. As recently as the 2000s, merchants could rely on a single acquiring bank for all of their payment acceptance needs. But as payment options exploded, the need for fraud protection tools ratcheted up and regulations tightened, that simple solution just couldn’t keep up. Now, businesses are faced with a crucial decision: how to build the right payment ecosystem.ÌýÌý

This post outlines three popular payment ecosystems – traditional systems, full-service PSPs, and the increasingly vital payment orchestration model – to help you find the perfect fit for your enterprise.Ìý

Three Payment Processing Ecosystems Chosen by MerchantsÌý

Today, enterprises must build their payment stacks to manage a complex web of acquirers/processors, PSPs, fraud-management tools and value-added services.Ìý

Even accepting a single payment isn’t a simple task. When a customer pays online or at a terminal, that credit card number or APM must be routed through the relevant providers, acquirers and issuing banks so that the merchant’s account is credited and the customer’s is debited.Ìý

And with increasing payment options, regulatory requirements and fit-for-purpose devices, merchants not only need flexibility for their unique business case, but the ability to change as their business grows.Ìý

Here are three leading payment processing ecosystems you will likely consider for your business needs.Ìý

Ìý1. A Traditional Payment EcosystemÌý

To power front-end and back-end capabilities for all the different commerce use cases, enterprise merchants often rely on a combination of differentÌýspecialized (and siloed) providers – including POS terminal providers, merchant acquirers, PSPs, hardware original equipment manufacturers (OEMs), software providers, and other value-added service providers.Ìý

A traditional payment ecosystem provides the highest level of flexibility, but comes at the cost of an increased administrative burden and compatibilityÌýissues between services and solutions.Ìý

Ìý2. Full Service Payment Service Providers (PSPs)Ìý

Full-service PSPs provide merchants with a bundled payments stack, combining technical integration enabled by gateways with fund collection, acquiring/processing, access to APMs and value-added services such as fraud management and multi-currency support – all via a low-tech enabledÌýsingle point of contact.Ìý

A PSP provides a very high level of seamless operation, but enterprises are locked into the selected services. While this may work for some businesses, others may need more agility.Ìý

Ìý3. Payment OrchestrationÌý

Payment orchestration is a cloud-native unified API layer that integrates all these different and constantly evolving payment solutions and providers. This enables merchants to seamlessly connect to various commerce-enabling endpoints and payment ecosystem stakeholders, effectively routing betweenÌýthem for the optimum payment outcome. Payment orchestration allows enterprise merchants to build their unique payments ecosystem, enabling the ability to select and effortlessly integrate with best-of-breed infrastructure and commerce enablers, whether in-person (eg POS terminal) or online (eg in-app or website).Ìý

Faced with a complex payment landscape and a wide variety of payment services, it’s no wonder many enterprises find it difficult to choose the ecosystem that’s right for their business. They’re often forced to choose between the agility of a flexible vendor payment ecosystem or the simplicity of a PSP.Ìý

How do you know which one is the right fit for your business? In the next section, we’ll give you a checklist that you can use for assessment.Ìý

Your Payment Ecosystem ChecklistÌý

An ideal payment ecosystem helps enterprises tackle the challenges that they’re facing in the current landscape – while catering to their unique business challenges.ÌýÌý

When searching for a payment processing solution, you should ask if it is:Ìý

1. Omnichannel
   Seamlessly enables easy payment options across in-person and online channels.
2. APM-enabled
   Accepts and processes payments not only from traditional card schemes, but also digital wallets and buy-now-pay-later.
3. Easily managed
   Payments are complex. An enterprise’s existing staff must be able to stay on top of the entire solution.Ìý
4. Risk-reducingÌý
   A payments solution must keep customer and company data safe with fraud protection and advanced security features.Ìý
5. ScalableÌý
   Businesses need to plan for growth in capability and location. An ideal solution enables scaling without significant complexity – including global growth.Ìý
6. CompliantÌý
   In a world of complex and ever-changing regulations, payment solutions must ensure a payments ecosystem is compliant. This is non-negotiable for doing business.Ìý
7. FlexibleÌý
   Gain the ability to choose the vendors that you want to use to best suit your business needs.Ìý