Payment orchestration: Achieve flow in payment processes

Is your business losing ground due to clunky payment systems? Whether it’s managing late payments, frustrating mistakes, or endless paperwork, inefficient payment processes are a headache that can drain your time, money, and patience.

Payment orchestration acts as a central hub for all your payments, streamlining the processes impacting your bottom line. In this article, we'll explore the concept of payment orchestration and how it can revolutionize your business's payment operations.

What is payment orchestration?

Payment orchestration software is a centralized platform that streamlines and optimizes the payment processes involved in the procurement lifecycle. It serves as a central command center that integrates multiple payment methods, gateways, banks, and acquirers, providing a unified interface for businesses to manage their payments.

Payment orchestration platforms offer a range of functionalities to help you effectively manage your payments, including:

• Payment acceptance: Offers suppliers a wide range of payment options, making it easy for them to pay how they want
• Routing optimization: Chooses the best payment route for each transaction, leading to higher success rates and reduced costs
• Payment reconciliation: Streamlines the reconciliation process, making it easier for everyone involved
• Analytics and reporting: Provides a clear picture of your payment performance, helping you make informed decisions

Payment orchestration tools go hand-in-hand with procurement solutions like Zip when it comes to making your procurement process more efficient. By automating tasks like payment initiation, reconciliation, and tracking, payment orchestration platforms can significantly reduce manual errors, improve cash flow management, and foster stronger relationships with suppliers. 

This integration also provides unparalleled visibility into payment status, empowering you to make informed decisions and avoid the risks that come with late payments or disputes.

How does payment orchestration work?

Payment orchestration is a relatively new term, but it’s essential for today's procurement teams. With so many suppliers, payment terms, and regulations, managing payments can get complicated fast. Payment orchestration software provides a central platform to handle payments, automate tasks, adapt to new payment methods and technologies, and make cross-border transactions easier.

To get a better picture of payment orchestration, let's follow a payment from start to finish: 

1. Purchase order creation and invoice processing

The first step in the payment orchestration process involves creating a purchase order outlining the terms and conditions of a purchase. Once a purchase order is approved, it's sent to the supplier, who then provides an invoice detailing the goods or services delivered and the amount due.

With technology like optical character recognition, machine learning, and natural language processing, AI-powered invoice processing can automate the extraction, validation, and approval of invoices, saving your team time while accelerating the payment cycle. 

2. Invoice verification and matching

Once the invoice is received, payment orchestration platforms can automate invoice verification and matching by pulling key data points from invoices and purchase orders, such as:

• Invoice numbers
• Dates
• Amounts
• Item descriptions

This data is then compared to identify any discrepancies. If inconsistencies are found, the platform can automatically flag them for review and resolution.

3. Payment authorization

Payment orchestration platforms can automate the payment authorization process by integrating with a company's financial systems and approval workflows. The platform can verify the availability of funds, check for any holdbacks or restrictions, and route the invoice for approval based on set rules and thresholds. 

Once approved, the platform can start the payment process. This automated step replaces manual tasks like reviewing invoices, checking for approvals, and entering payment information. 

4. Payment routing and processing

By centralizing payment information and integrating with various payment processors, payment orchestration automatically chooses the most efficient payment method based on vendor preferences (e.g., ACH, wire transfer). This optimization leads to faster payment processing, reduced processing costs, and improved cash flow management.

Payment orchestration can also enhance security by securely transmitting payment data to the correct back or processor, minimizing the risk of errors and fraud.

5. Reconciliation and reporting

Payment orchestration platforms often offer advanced reporting capabilities, allowing businesses to generate detailed reports on payment activity, including transaction history, payment status, spend data, and key performance indicators. These reports can help you understand your finances better, make sure you're following the rules, and find new ways to improve your processes.

H2: Benefits of payment orchestration

By streamlining and automating complex payment workflows, payment orchestration offers a wealth of benefits that can directly impact your bottom line and overall success, including:

• Faster transaction processing: By automating many manual tasks, payment orchestration leads to faster turnaround times for customers. This can improve customer satisfaction and help businesses meet tight deadlines.
• Reduced manual errors: Centralizing payment operations and minimizing manual work reduces human errors and ensures greater accuracy in payment processing. This means fewer mistakes, lower costs, and improved customer and employee experience.
• Lower transaction fees: Payment orchestration platform providers can often negotiate better rates with payment processors and acquirers. By leveraging their scale and negotiating power, these platforms can secure better rates and pass the savings on to their clients. 
• Optimized payment routing: By selecting the most cost-effective payment method and acquirer for each transaction, payment orchestration can help minimize processing costs. This is especially helpful for businesses that operate in multiple countries or deal with a variety of payment methods.
• Data encryption and security: Payment orchestration platforms typically implement robust security measures to protect sensitive payment data, such as encrypting data and using advanced fraud detection technologies, to help businesses prevent data breaches and protect their customer’s information. 
• Centralized compliance management: Payment orchestration platforms can help businesses manage compliance with various payment regulations and industry standards, reducing the administrative burden and minimizing the risk of fines or penalties.
• Unified analytics and automated reporting: Automated reporting can save time and resources while ensuring procurement teams have access to the data they need to make informed decisions.

Need proof of how orchestration can benefit your business? Try our ROI calculator to learn how much you could save with Zip’s intake-to-procure solution.

How to find the best payment orchestration platform for your business

Choosing the right payment orchestration platform is like donning the perfect pair of shoes—you wouldn’t wear heels on a hike without expecting some serious blisters. The same mentality can be applied to finding the right procurement tool. 

To make the right choice, think about your business needs. Will your payment orchestration platform need to integrate with your existing systems? Will you need a scalable option to grow with your business? Here are a few key factors to consider before making your final decision. 

Know your must-have features

Knowing your essential features is like building the foundation of your payment infrastructure. When choosing a payment orchestration platform, think about your must-haves and your nice-to-haves. For example: 

Must-haves:

• Integration with your existing systems: Ensure the platform can seamlessly connect with your ERP, CRM, and other business tools.
• Security and compliance: Look for robust security features and compliance with industry standards like PCI DSS and GDPR.
• Scalability: Choose a platform that can handle your growing transaction volume and adapt to future changes.

Nice-to-haves:

• Advanced analytics: Get insights into your payment data to optimize your operations and identify trends.
• Customizable workflows: Tailor the platform to your specific business processes.
• Global reach: If you operate in multiple regions, ensure the platform supports cross-border payments and local regulations.

By listing your priorities, you can narrow down your options and avoid wasting time on platforms that don't offer the necessary tools.

Look for advanced integration capabilities

Integrating your payment orchestration platform with your existing systems is crucial for ensuring a smooth and efficient payment workflow. When your systems can talk to each other, you can avoid manual data entry, reduce errors, and gain valuable insights into your payment data. Payment orchestration is all about enabling the flow of information, so you want to make sure your systems play nice.

Some payment orchestration platforms offer custom integrations to cater to the specific needs of your business, from procurement to resource planning. This means they can tailor the integration to fit seamlessly with your existing processes so you can scale without disruption. 

Prioritize security and compliance

Security and compliance should be top priorities when choosing a payment orchestration platform. In today's digital landscape, protecting sensitive customer data and ensuring compliance with industry regulations is essential. 

Look for platforms that offer robust security features such as data encryption, tokenization, and multi-factor authentication. Additionally, make sure the platform complies with relevant standards like PCI DSS, GDPR, and PSD2. By prioritizing security and compliance, you can protect your business and customers from potential risks and maintain a strong reputation.

Consider scalability

If you expect your business to grow, scalability should be a key consideration when choosing a payment orchestration platform. A scalable platform can easily handle increasing transaction volumes and adapt to new payment methods and regulations. This ensures your payment infrastructure can support your business's growth and avoid bottlenecks or disruptions. 

When evaluating scalability, consider the platform's track record of handling large transaction volumes, its ability to integrate with emerging payment technologies, and its flexibility to adapt to changing business needs. By selecting a scalable platform, you can future-proof your operations and equip your business with the tools it needs to grow.

Compare prices and service

While features and functionality are important, you also need to pay attention to the platform's pricing structure and the level of service it provides. Here’s what to look for:

• Pricing model: Consider the platform's pricing model, including transaction fees, monthly or annual subscriptions, and any additional charges for specific features. Compare the pricing with other platforms to ensure you're getting a competitive rate. 
• Customer support: Assess the quality of the platform's customer support, response times, and availability of resources like documentation and tutorials. A reliable and responsive support team can be invaluable in resolving issues and ensuring the smooth operation of your payment processes.

Integrate Zip with payment processors for seamless procurement orchestration

Zip's procurement orchestration software, combined with advanced payment solutions, can streamline your procurement process and optimize payments. Zip's AI-powered platform provides tailored integrations, global suppor, and strong security measures to safeguard your financial information and enhance operational efficiency.

Want to see Zip in action? Schedule a demo today and see how it can make a difference for your business.

Payment orchestration FAQ

Still have questions about payment orchestration? We've got you covered. Here are answers to some frequently asked questions about this powerful technology and how it can benefit your business.

How does payment orchestration help reduce fraud?

Payment orchestration helps stop fraud by using advanced technology to monitor payment data and identify suspicious activity. It detects unusual spending patterns, such as large purchases made from unfamiliar locations or sudden increases in transaction volume. 

Can payment orchestration be used for cross-border payments?

Yes, payment orchestration can be used for cross-border payments. In fact, it's particularly well-suited for managing complex cross-border transactions. Payment orchestration platforms can handle different currencies, exchange rates, and compliance requirements that come with international payments. They can also optimize payment routing to select the most cost-effective and efficient payment methods for each transaction, considering factors like:

• Currency exchange rates
• Transaction fees
• Settlement times
• Regulatory requirements
• Payment method availability

Payment orchestration can also help businesses comply with international regulations and mitigate risks associated with cross-border transactions.

What are the challenges of implementing payment orchestration?

Implementing payment orchestration can be a complex process, but the benefits it offers can outweigh the challenges. One of the main challenges is choosing the right platform that aligns with your specific business needs and goals. It's important to take the time to evaluate different platforms and consider factors like features, integration capabilities, security, scalability, and pricing.

Another common issue is integrating the platform into your existing tech stack. This may require technical expertise and coordination between teams within your organization. 

With any new software comes a learning curve, and it may take time for your team to become familiar with its functionalities and best practices. However, the long-term benefits of implementing payment orchestration, such as improved efficiency, reduced costs, and enhanced security, can make the initial effort worthwhile.