Managing your payment strategy is like taking care of a project in your organisation. You can either hire a project manager to regulate and oversee all aspects, or you can directly manage the small project team.
If you prefer the first route, the orchestrator is your friend. If you prefer personal control, direct integration is the way to go. However, the conundrum of orchestrator vs. direct integration goes beyond your preferences. It is also dependent on your specific business needs and technical considerations.
In this blog, we will explore both strategies’ use cases, technical considerations, and business impacts to help you choose the right approach.
Orchestrators vs. direct integration: The basics
Orchestrators, also known as third-party routers, are middleware platforms that manage multiple payment gateways. Conversely, direct integration refers to a direct connection between the business and individual payment gateways.
Payment orchestration platforms offer a unified platform that supports multiple payment providers, currencies, and methods.
Some features of such third-party routers include:
- Dynamic routing for payments
- Failover mechanisms
- Multi-gateway access
- Higher customisation and support
- Dispute management
- Reporting and analytics
On the other hand, direct payment gateway integration attempts to connect businesses directly with a single or limited set of payment gateways. It is more suitable for small teams and has features such as:
- Full control over payment strategy
- Customisability
- Cost-effectiveness
- Faster setup time
| Feature | Payment Orchestrators | Direct Integration |
| Complexity | Dynamic routing for payments for multiple payment providers, currencies, and methods under one roof | Simpler integration involves direct communication between the business system and the payment provider |
| Flexibility | Flexible, enables integration with multiple payment processors, wallets, and platforms | Less flexible; businesses are tied to a specific payment gateway, which limits future scalability |
| Payment Method Support | Supports a wide range of payment methods (credit cards, wallets, bank transfers, etc.), and you can add more | Typically supports only a few payment methods offered by the integrated provider |
| Error Handling | Advanced error handling and redundancy, such as automatic retries and fallback to other providers | Error handling managed by the business for each payment gateway |
| Security | Often includes built-in security features, like tokenization, encryption, and fraud detection | The business must implement and manage compliance with standards like PCI-DSS |
| Customization | Customizable to fit different business models, supporting global payment systems with localized solutions | Customization is limited by the capabilities of the specific payment gateway |
When orchestrators are ideal
Orchestrators are ideal when you need:
- Fast payment scalability strategies
- Multiple payment methods and regions
- Need for dynamic routing for better success rates
For example, orchestration platforms provide a centralised payment arena with solutions such as a Payment Gateway, Payouts, Cross-Border Payments, Tokenisation, Affordability options, and Payment Links to simplify, secure, and optimize business payment processes.
Brands like Zepto, Big Basket, Porter, Samsung, and much more use this system for unified and secure payments.
While businesses that need high-volume transactions should go for orchestrators, businesses that have niche payment needs and lower transaction volumes would fare better with direct integration payment strategies. This is because it provides:
- Full control over payment flows
- Cost-effective payment solutions
- In-house error handling
The customer can then select their preferred payment method and enter payment information. The platform processes this transaction directly through the integrated payment system, which can be an ERP, POS, or accounting software.
Technical considerations for each approach
Let’s discuss the technical considerations of payment orchestrator vs. direct integration with the most important aspects in mind.
1. Ease of integration
- Orchestrators: Most orchestration platforms are easy to integrate into the payment workflow with prebuilt APIs that reduce development effort. They come with customer support and error handling. Once integrated, you can add preferred payment providers and custom rules based on your business needs. For instance, Plural integrates with popular platforms like Shopify Plus, Cordova, Woocommerce, and Magento to get you set up in minutes.
- Direct integration: Direct integration requires more technical knowledge and development resources for setup. This can take longer and cost more if your team is not equipped with adequate resources. Moreover, error handling also becomes your problem during the process.
2. Scalability for high transaction volumes
- Orchestrators: Third-party payment routers can handle scalability and routing automatically. It can not only become scalable with growing business needs but also reduce payment failure by optimising the transaction process, thus reducing drop-offs and boosting conversions.
- Direct integration: Payment scalability strategies in direct integration are harder to implement as they require additional work to add more payment providers or options. This is because businesses are tied to a specific payment gateway, which limits expansion capabilities.
3. Compliance challenges
- Orchestrators: Orchestrators comply and ensure your payment platform is compliant with PCI-DSS standards. Built-in features like tokenisation, fraud detection, and encryption help keep your and your customer’s data safe.
- Direct integration: Businesses often face compliance challenges in payment integrations, as they have to maintain security standards independently. This increases the chances of errors and data compromises.
“Whilst usability is key for payments, security is a necessary condition for people to use them. Balancing Usability and security is one of the keys to healthy relationship between OEMs and end users.” -Peng Ning, VP Engineering, Samsung said at The Money Event.
Business impact: Time-to-market, costs, and flexibility
Each payment approach affects the time-to-market, costs, and flexibility.
1. Time-to-market
Orchestrators offer a faster time-to-market than direct integration payment gateways because they have multiple gateways, failover safety, and automated rerouting. Direct integration, on the other hand, requires longer timelines for custom setup, thus making the time-to-market slower.
2. Costs
Orchestrators have higher recurring costs in the form of subscription fees, but the overhead maintenance is greatly reduced. Its higher fees may be due to the orchestration layer and transaction fees from multiple providers.
For direct integration, you have lower upfront costs but more maintenance effort. Not to mention that maintenance is the responsibility of your business, which may incur additional costs.
3. Flexibility
Third-party payment orchestrators offer agility to accommodate quick changes. You can also enable integration with various payment providers, wallets, and platforms with minimal changes.
In direct integration, each change and need requires additional setup. But it does allow deeper customisation for your specific business needs.
Practical scenarios: Real-world examples
1. Companies opting for orchestrators
Global D2C brands that require orchestration to manage payments across multiple countries fare better with third-party routers. For example, companies like IRCTC and Spicejet use JusPay as the orchestrator.
This allows them to use multiple payment gateways with different currencies and methods without writing code each time they add a new gateway.
2. Companies choosing direct integration
Direct integration works best with niche startups and online stores that prefer more control over their payment channels. This helps them save costs in the long run.
For instance, to save costs, Reliance Digital prefers direct integration with Plural through our Affordability Suite. This would allow Reliance Digital to run offers, BNPL, and EMi schemes efficiently for affordability and flexibility.
Conclusion: Decision framework for choosing the right strategy
There is no absolute answer for which payment strategy is the best: orchestrator vs. direct integration. Your choice should depend on your specific organisation’s requirements and resources.
Orchestrator is ideal for enterprises with high transaction volume, multiple gateways, and scalability options. Direct integration is more suitable for smaller businesses and startups with lower payment volume, local or country-specific transactions, and single payment gateways for better control.
You can also choose a payment gateway from payment orchestration platforms that best suit your requirements and budget. At Plural, we never restrict customers from using us directly but enable them to select their payment options independently.
To explore a suitable payment provider, contact our sales team or email us your details at pgsupport@pinelabs.com.
