As globalisation of e-commerce continues at pace, a new gap in the payments landscape has emerged.

Merchants want greater global reach as they expand into different geographies and to be able to offer the latest payment options, quickly and seamlessly.  Individual payment service providers cannot offer all payment methods and currencies in all geographies and so to plug this gap and enable the payment processing capability of businesses to align with their strategic roadmaps, a new payment model is emerging with a ‘many to many’ technical mindset. Enter the payment orchestration platforms (POPs).

In this insight we take a closer look at POPs, together with some potential benefits and legal considerations for merchants looking to procure this emerging type of payments solution.

What is payment orchestration?

POPs integrate and manage different payment service providers, acquirers, payment gateways, banks and other value add services (such as fraud technology) on a single, unified software layer. This enables merchants to integrate with several different payment processors via a single API. As well as reducing implementation complexity, POPs are able to centralise the reconciliation and processing of customer data from these various payment services providers, giving merchants more holistic oversight of their payments data and related trends.    

What are the potential benefits for merchants?

Payments orchestration offers several potential benefits for merchants:

  • By integrating with multiple payment service providers, POPs make it easier for merchants to scale their businesses cross border by accepting a variety of payment methods in various geographies. Additional territories and the latest payment methods can be switched on (or off) quickly as there is no direct integration timeline because the individual payment service providers are already integrated into the POPs.


  • In the same way, additional ‘value add’ services such as fraud and other compliance tools can be included within a merchant’s payment stack, enabling merchants to improve conversion rates, reduce fraud / chargebacks and better manage their (ever changing) compliance responsibilities with the latest technology and solutions.


  • One of the key benefits of payment orchestration is the ability to route transactions according to a pre-determined set of rules. This enables merchants to send transactions to the processor(s) most likely to accept them (based on factors such as region, value, currency or BIN) or to the processor(s) with the most favourable processing fees. Transactions can also be automatically cascaded to additional processors if a transaction fails in order to reduce the volume of false declines, which can negatively impact sales.


  • Potential access to lower processing fees as POPs can employ economies of scale with the rates they negotiate, compared with a merchant negotiating independently with a payment processor on its own behalf.


  • Data insight across more payments and payment types, giving better visibility (in real time) of payment trends, fraud activity as well as the performance of a merchant’s various payment service providers. This data can be used to give merchants valuable insights into customer behaviour and identify new opportunities, as well as assess the efficiency of its payment capabilities.

Legal considerations for merchants

  • While payment orchestration may be a ‘one stop shop’ for merchants from a technical integration perspective, the laws and rules that regulate payments remain complex and the use of POPs does not reduce the risks associated with the payments cycle for either the merchant or its downstream payment services providers. As such, in addition to having a contract with their POPs providers, merchants will almost certainly need to enter into direct contracts with payment services providers to cover off key areas such as card scheme or regulatory requirements (e.g., anti-money laundering), settlement of funds, the processing of data and other elements of the payments cycle those POPs providers are unable to sub-contract. Depending on the extent and nature of a merchant’s payment stack, this network of related contracts could be extensive and span a number of territories. Merchants will want to ensure these contracts are properly dovetailed with each other to ensure clarity and alignment on important matters such as liability and termination.


  • The POPs provide the technical ‘middleware’ that orchestrates which payment options are offered and how they work together. For certain elements relating to the API / technical integration, data encryption, data analytics and those elements it is able to sub-contract, the POPs provider acts as prime contractor and effectively subcontracts certain elements of the payment cycle to third party providers that it integrates with. This could be items such as point-of-sale terminal equipment hire, fraud screening solutions or other ancillary services. As the merchant is therefore one step removed (contractually) from the third party / parties actually providing certain elements of the services in this scenario, it has no privity of contract with them and relies upon the POPs provider to negotiate (and stand in front of) important operational aspects of the relationship, such as service warranties and service levels for those elements. The warranties, service levels and other payment service-related terms offered by third party providers to POPs to onward offer to their customers are likely to be minimal (if offered at all), and only the largest merchants may be in a position to force the POPs providers to procure better ones.


  • Although POPs can harness greater economies of scale in their pricing, they may be operating with several different subcontractors across several regions and so are very unlikely to offer fixed processing costs for a specific, fixed term. Any price increases (whether pass-through or otherwise) are likely to be passed on to merchants immediately (or on short notice), making cost forecasting difficult. Additionally, merchants should not overlook the total end-to-end processing costs (i.e., factoring-in all additional costs under the separate, direct contracts it has with payment services providers involved in their funds flow and payments cycles).


  • With the addition of another party and layer of integration in a merchant’s payment stack, the personal data mapping and analysis for each payment service becomes a little more complex and (consequently) carries a little more risk.As all payments operate from one layer of technology, a POPs provider represents a single point of failure in the event of an outage (or indeed insolvency) and so merchants will be keen to ensure robust business continuity plans are in place, together with strong service levels on availability.


  • The breadth of connectivity into acquirers and payment methods defines the robustness of a POPs provider’s service, which can become outdated quickly if it does not keep pace. Merchants will wish to ensure contracts include continuous improvement obligations on the POPs provider, and larger merchants may be able to take it a step further by dictating which payment services are integrated. POPs providers (conversely) will want to remain truly agnostic and in full control of their strategic roadmaps, and so are likely to resist such provisions.


Payment orchestration has the potential to drastically change the payments game and its benefits for merchants are compelling, particularly from a technical perspective. 

Contracting is, however, necessarily a little more complex and so if POPs providers are to reap the benefits of this flexible, API-driven marketplace, there is going to be pressure to offer simpler and more frictionless contract and onboarding processes.

Payment orchestration is not a single model, but a concept with many implementation options and approaches available. Merchants considering POPs should identify clear business objectives and gain a detailed understanding of the risks and benefits associated with the different models and approaches before deciding on an implementation. They should also consider the legal and contractual complexity, together with the wider costs involved in their end-to-end funds flow and payments cycles and ensure this is properly factored into any ROI analysis.    

If you are a merchant looking to procure a POPs solution, a POSs service provider looking to simplify your contractual arrangements or otherwise require legal advice in this area, please do get in touch.

Authors: Alex Williamson, Jo Croston

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2022. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Written by

Alex Williamson

Alex Williamson

Date published

14 November 2022


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