Demystifying Payment Orchestration

Businesses today are increasingly meeting their customers online, tapping into new markets, and expanding their customer base beyond borders. To accommodate this growth, relying on a single payment aggregator is no longer sufficient. Many businesses are now opting for a multi-payment aggregator stack to ensure smoother transactions across geographies, payment methods, and currencies. However, managing multiple payment aggregators comes with its own set of complexities—ranging from routing inefficiencies and reconciliation challenges to integration and maintenance headaches.

Enter payment orchestration—a sophisticated solution designed to simplify and optimise the entire payment process. By acting as a unified layer across different payment aggregators payment orchestration reduces friction, increases transaction success rates, and enables businesses to scale efficiently. But what exactly is payment orchestration, and how can it transform the way businesses handle payments? Let’s demystify this emerging concept.

Stage 1.0: The Single Gateway Dilemma

Imagine a lone traffic officer named Mr. Raju, managing the flow of vehicles on a one-way street. In the early days of online payments, this is what payment processing looked like—businesses would often rely on a single payment gateway to handle all their transactions, much like Mr. Raju directing traffic on his own. For a small company with minimal traffic, this could work well enough.

But as any experienced traffic officer will tell you, relying on just one route can be risky. What happens if a roadblock appears? Congestion and chaos are inevitable. Similarly, when a payment gateway experiences downtime or fails to process a transaction, businesses lose sales, customers grow frustrated, and opportunities slip away. Just as a one-lane road can only handle so many vehicles at once, a single payment gateway can only process a limited number of transactions before it hits capacity or encounters technical glitches. This stage worked for businesses in their infancy but began to show cracks as transaction volumes grew.

Stage 2.0: Introducing Multiple Gateways

Fast forward to Stage 2, where companies have grown beyond the simplicity of a single payment gateway. Here, businesses start to engage multiple gateways to spread risk, enhance payment success rates, and expand their payment coverage across different markets. This is where payment orchestration begins to come into play.

Now, let’s revisit Mr. Raju. He’s no longer working on a quiet one-way street but is stationed at a busy intersection with multiple roads and streams of traffic flowing from different directions.To effectively manage this chaos, he employs a series of predefined rules:

• Rule 1: Route all hatchback traffic to the service road.
• Rule 2: Route all sedan traffic to the flyover.
• Rule 3: Route all red Maruti Baleno models to the right of the flyover.

Similarly, companies like Swiggy utilize specific rules in their payment orchestration strategy:

• Rule 1: Route all credit card transactions to Razorpay.
• Rule 2: Route all UPI transactions to Paytm.
• Rule 3: Route all credit card transactions with a Rupay network and BIN of “6527” to Cashfree.

If you’ve made it this far, you might be wondering why we call this system a “payment orchestrator” rather than simply a “payment rules engine.” The key difference lies in the nature of online payments, which don’t follow a straightforward, linear pattern.

To illustrate this, let’s borrow a concept from probability theory. In a Markovian process—such as flipping a fair coin—each outcome is independent of previous ones. Whether heads or tails, the result of the next flip is unaffected by the last. However, online payments work differently. In a non-Markovian system, each new transaction can be influenced by previous events, such as past payment success rates, fraud flags, or transaction patterns.

This means that static rules aren’t enough. Just as a traffic officer like Mr. Raju must adjust his strategies in real time based on changing road conditions, a payment orchestrator must adapt to the shifting dynamics of payment flows. This adaptability comes from the use of AI and real-time data to optimize decisions on the fly. It’s this dynamic, intelligent approach that sets payment orchestration apart from a simple rules engine, and this requires an AI engine to make those real-time decisions. 

Stage 3.0: The Smart Engine—Adapting in Real-Time

Now, imagine a futuristic traffic management system—like Jarvis from Iron Man. Just as Jarvis continuously analyzes enemy movements to assist Iron Man, modern payment orchestrators monitor payment gateways and transactions in real-time. They assess success rates, detect issues, and identify anomalies, dynamically adjusting payment routes to optimize performance.

Think of rush hour traffic becomes congested, Mr. Raju might expand lanes to let more cars through. Similarly, a payment orchestrator responds on the fly, ensuring transactions are rerouted through the most efficient gateways based on real-time performance data. And all of this happens within milliseconds.

Take companies like Blinkit or Swiggy, for example, whose founders recently revealed that they process up to 700 orders per minute during peak times. Beyond building a robust supply chain to fulfill these orders, they also need intelligent systems to optimize payment success rates. This is where a Jarvis-like payment orchestrator comes into play—performing real-time monitoring and adjustments so companies like Blinkit and Swiggy can focus on deliveries, not payment failures.

Conclusion

Payment orchestration operates through three key components:

1. Connectors: Pre-built payment gateway integrations.
2. Rule Engine: Where companies define traffic routing rules.
3. Routing Engine: Utilizing AI technology to calculate success rates in milliseconds.

But there’s a fourth, often overlooked, component: Collective Intelligence. External payment orchestrators like flowWise offer networked insights drawn from multiple businesses, enabling smarter, faster adjustments to emerging trends and challenges.

While building an in-house payment orchestrator might seem feasible given today’s AI advancements, the real advantage of using external platforms lies in their shared intelligence. This networked approach not only boosts payment success rates but also gives businesses a competitive edge in a fast-moving digital landscape.

In conclusion, leveraging an external payment orchestrator like flowWise isn’t just about improving payment outcomes—it’s about empowering businesses to focus on what they do best while leaving the complexities of modern payment processing to a system designed to adapt, optimize, and thrive.