Payment orchestration is a popular topic in fintech, often seen as a universal solution for managing all payment and banking issues. While it offers some benefits, it is often overhyped and overlooks broader, more critical issues, making things more complicated rather than easier.
1.) Its limiting: It focuses too narrowly, ignoring essential elements such as risk, compliance, data security, fraud prevention, contract terms, and technological advancements.
2.) What about the risk: Banks and payment providers are regulated differently worldwide, presenting varying levels of risk. Assuming that payment orchestration will resolve and optimize all risks is misleading.
3.) Payment orchestrators are not on your side, as they are just glorified resellers: It ties you to a few providers. These platforms often have agreements with specific payment channels, limiting your options. This setup can turn orchestration providers into resellers pushing their partners' solutions without thorough market research.
4.) Too complex: The added complexity of payment orchestration can also be problematic. It promises streamlined operations but requires managing additional systems, fees, terms, and technologies. This complexity can lead to higher costs and the need for specialized training, straining resources if not planned properly.
Whats the alternative?
Payment and banking STRATEGY
A robust strategy involves understanding and leveraging new technologies to enhance payment security and efficiency. It requires carefully reviewing contracts with providers to ensure proper risk assessment, compliance, and fraud protection. This strategy also involves various departments like finance, legal, marketing, sales, business growth, technology, and security.
Read my article for more insights
Comments