How payment orchestration cures ‘legacy tech’ disease

Our new white paper explains how acquirers can add value, build their business and cure “legacy tech disease” through partnership with payment orchestrators. 

Some acquirers may view payment orchestrators as competitors. However, our latest white paper,  “How to keep your customer in a multi-acquirer world” argues that acquirers can reduce risk, deliver more value-added services and attract new merchants by working with an orchestrator. 

That’s because payment orchestration helps acquirers to tackle what we call  “legacy tech disease”, a condition caused by poorly-performing and outdated technology stacks. According to McKinsey¹, payments companies and banks spend up to 70% of their IT budgets patching and maintaining legacy systems rather than investing in innovation and improving user experiences. Merchants are not immune either, with 79% of merchant payment managers admitting their tech stacks need an overhaul².  

Spotting the symptoms 

Symptoms of “legacy tech disease” include difficulties in integrating new payment types such as account-to-account payments and subscriptions through to challenges with clunky platforms that exhibit low performance across the board. The inability to handle spikes in transaction volumes and bottlenecks caused by peak transaction periods, is also a hallmark of the condition.  

Typically, legacy platforms will struggle to balance processing loads between servers, leading to service outages. Outdated tech stacks can also be slow to introduce new features to market, leading to lost revenue opportunities. Perhaps most damagingly, legacy tech platforms prevent acquirers from meeting merchant’s growing expectations for smooth, secure and rapid payment services across a wide range of payment types and geographies.  

As more and more enterprise merchants look to work with multiple acquirers, our new white paper shows how acquirers that offer sub-standard technology solutions end up losing their merchants to other more agile, tech-focused Payment Service Providers (PSPs). From service outages to a failure to offer the right payment methods, poor access to new geographies or restricted routing options, low authorisation rates or limited tokenisation – any of these factors can cause a merchant to switch to another provider. 

Finding the cure 

To overcome legacy tech disease, our new study says acquirers should see payment orchestrators as partners who can help them deliver a wider range of services more effectively while managing risk and growing their business. By working with orchestrators, acquirers are able to retain their core relationship with merchants and broaden the scope of their offering.

While retaining the bulk of payments processing, acquirers can tap into orchestrators for additional payment types, more processing capacity and access to value-added services that improve authorisation rates or enable transaction tokenisation, for instance. More information about the range of services orchestrators offer acquirers can be found on our website here. 

Since most orchestrators operate modern tech stacks in a multi-cloud, multi-region environment, they are able to reduce operational risk for acquirers by offering the capacity to switch between gateways in the event of outages, while giving access to unparalleled transaction processing capacity. Furthermore, acquirers can offer their clients new payment types far more quickly by working with an orchestrator’s modern systems, while also collaborating on the provision of rich transaction data to enable better fraud detection, optimised transaction management and new merchant services that boost growth. 

Our new white paper shows how independent orchestrators can effectively work as a distribution layer, enabling acquirers to offer a much wider range of services to their target merchants. This is far more effective than the alternative approaches to legacy tech disease, which are either to 'rip and replace' systems in a risky, expensive and time-consuming process, or to adopt a piecemeal approach, building and tacking on new functions in a process that ends up delivering a more complicated stack than the original, albeit still at risk of rapid obsolesence. 

Taking independent orchestration technology as a white-label solution enables acquirers to integrate the tech they need and to replace or augment their own stack over time using an interoperable solution maintained by the orchestration partner. This approach also means acquirers can offer such services to their merchants directly, boosting customer loyalty and adding value.   

Overcoming legacy tech disease 

Around the world, commercial enterprises of all kinds are suffering from legacy tech disease – and acquiring is no exception. Unlike some other sectors, however, acquirers have access to a ready cure in the form of partnerships with payment orchestrators. These partnerships help to optimise merchant payment performance by delivering the best routing options, lower costs, improved authorisation rates and fraud defences as well as fewer failed payments. By partnering with a payments orchestrator, acquirers can also improve their operational resilience, build processing capacity and boost their growth potential by offering the rapid integration of new payment types and providing access to innovative, value-added services. 

Download our new white paper to learn how you can upgrade your payment system from a rusty backend to a high-performance engine.