5 Payments Orchestration Capabilities Driving Higher Approval Rates

§ 01 Executive Snapshot

• What: A study highlights five key capabilities in payments orchestration that enhance approval rates.
• Who: PYMNTS Intelligence and Spreedly conducted the study.
• Why it matters: Understanding and implementing these capabilities can significantly improve transaction success rates and operational flexibility for businesses.

§ 02 Key Developments

• Companies with all five capabilities (automated routing, frequent updates, failover, token control, and new payment rail integration) are more than twice as likely to achieve payment approval rates above 97% compared to those with one or two capabilities.
• Organizations that successfully implement these capabilities are approximately 11 times more likely to report transaction completion gains exceeding 2%.
• Many companies still rely on manual routing decisions, exposing revenue to risks when issuer performance changes or network conditions deteriorate.

§ 03 Strategic Context

• The evolution of payments orchestration has shifted from simple connectivity to a more complex operational flexibility model, highlighting the need for continuous adaptation.
• Firms are increasingly recognizing the importance of automated processes and resilience in payments, moving from reactive to proactive operational strategies.

§ 04 Strategic Implications

• Immediate market consequences include increased pressure on firms to enhance their payments infrastructure to avoid transaction failures and lost revenue.
• Long-term adoption implications suggest that companies that invest in comprehensive orchestration capabilities will gain a competitive edge in customer experience and operational efficiency.

§ 05 Risks & Constraints

• Potential risks include the complexity of integrating new payment rails and the significant engineering resources required to implement changes, which may deter firms from fully utilizing orchestration technologies.
• Competition from FinTech providers that can offer faster onboarding and simpler integration solutions may pose a challenge to traditional payment processors.

§ 06 Watchlist / Forward Signals

• Companies should monitor the adoption rates of the five key capabilities and their impact on approval rates and transaction completions in the coming quarters.
• Future developments that signal success include improvements in customer experience metrics and reductions in transaction failure rates as firms implement more robust orchestration strategies.