Payment Payment

Gateway vs Orchestration
CellPoint Digital Gateway vs. Orchestration

Did you know with

the full integration of
­Payment Orchestration
can reduce costs
by 20%

Introduction ......................................................................................... 5
What is a Payment Gateway? ............................................................ 7
How do Payment Gateways work? ................................................... 9
What is a Payment Orchestrator? ................................................... 13 Providing a seamless payment experience is
How do Payment Orchestration work?........................................... 15 crucial for businesses to retain customers and
Why is Payment Orchestration important? ................................... 22 increase revenue. This e-book compares two
What’s the difference? ...................................................................... 30 popular options, Payment Gateway and
Learn more ........................................................................................ 33 Payment Orchestrator, to help you make
an informed decision.

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CellPoint Digital Gateway vs. Orchestration

Introduction
Growing businesses are often looking for ways to optimise
revenue while keeping costs low. Innovations in digital technology
have meant that the expectation of a fully integrated, seamless
payment experience is widespread.

This can be a make-or-break factor when it comes to customer

conversion for online retailers, e-commerce and other business types.

However, when it comes to creating a smooth, secure and user-friendly

payment process, the language can be jargon-heavy, with highly
distinctive features of the payment system seen as interchangeable.

Alongside this, the adoption of Payment Orchestration across

numerous industries has led to questions about the exact role this
plays in a payment ecosystem, and how it differs from the role of the
traditional payment gateway.

In this e-book, we examine the distinction between a Payment Gateway

and a Payment Orchestrator and provide insights into choosing the
optimal solution that aligns with the unique requirements of
businesses.

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 Gateway vs. Orchestration

What is
a Payment
Gateway?
You may not be familiar with the term,
but it’s likely you are familiar with
the functionality of a payment gateway
Otherwise called a gateway, it is the front-end technology that oversees
the transmission of customer information to the merchant’s acquiring
bank (known as an acquirer) that processes a successful transaction
on behalf of a merchant.

In essence, it is the bridge between businesses and customers,

and the technology that securely authorises the transaction.

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CellPoint Digital
How do Payment
Gateways work?
A payment gateway at its most basic level provides a technical
connection between a merchant’s online website or mobile app
and the merchant’s acquirer or Payment Service Provider (PSP).
This gateway connection provides secure collection and transmission
of consumer payment data in accordance with industry standards such
as PCI-DSS, between these two parties.
Connectivity between the merchant’s platform and gateway is
­determined by the security level of the platform itself and the level of
control the merchant wants to maintain over the user experience.
For merchants whose platforms are themselves PCI compliant, the
merchant may choose to integrate using the gateway providers API’s.
In this scenario, the merchant is presenting the payment page and
collecting the consumer payment information within their platform.
Operate the Customize
best payment Payment
ecosystem for methods in any
your market digital channel
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Gateway vs. Orchestration
The benefit to the merchant of this approach is that they are in
complete control over the consumer experience. The downside is that
the merchant is responsible for any potential data breach associated
with the collection and storage of sensitive data. The merchant’s platform
is also subject to annual 3rd party audits associated with PCI compliance,
which are expensive.
For merchants whose platforms are not PCI compliant, there are several
Hosted Payment options available. One option is a fully hosted payment
page, where the merchant redirects the consumer to a payment page
hosted within the payment gateway provider’s secure environment.
Another is the use of individual payment fields which are hosted within
a provider’s secure environment but are embedded into the merchant’s
own payment page. Each has pros and cons related to control and
­security.
Boost conversion Optimise
rates and performance
eliminate through real-time
payment friction monitoring
CellPoint Digital
When someone makes a purchase,
a financial system carries the “money”
from the buyer’s account to the merchant’s
account:
Once a consumer has selected and confirmed
the ­products/services they wish to purchase on the
­merchants checkout page, the consumer will click
on the “PAY” button.
Based on one of the options highlighted earlier,
a payment page will be presented to the consumer.
The available payment methods for that
merchant will then be presented to the consumer
(Cards, Wallets, Bank Transfers, etc.).
The consumer will then select the preferred payment
method, enter the requested details associated with the
selected payment method and then hit submit.
Upon submission, the payment gateway will send
the payment information to the appropriate payment
­processor (card acquirer/PSP) for authorisation.
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Gateway vs. Orchestration
Once the payment has been authorised by either the
card Issuer or APM processor, a response is returned
through the payment gateway to the merchant informing
them whether the transaction was approved or declined.
a. If approved, the merchant will inform the consumer
and proceed with processing the order for delivery.
b. If declined, the merchant can request the consumer
to try a different payment card or different payment
method, and the process would repeat itself.
To receive the funds associated with the purchase from
their acquirer or PSP, the merchant must capture or settle
each of the authorised transactions. This can be done at
the same time as the authorisation for instantly delivered
products (digital content), or as a delayed process subject
to shipment or confirmation of the purchase.
Submission can take place online via an API call or via
a batch upload. Either way, the merchant will initiate a
­capture transaction which the gateway will consolidate.
At a defined cut-off time (or at intervals throughout the
day), the gateway will submit a capture/settlement file
to the acquirer/PSP for settlement.
Once the Acquirer/PSP has received the funds from
the issuer/payment method provider, they will settle the
funds into the merchants defined settlement account.
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 CellPoint Digital Cross Border Transactions

We have established how Payment

Gateways enable the secure transmission of
payment data between merchant platforms
and the merchant acquirer/PSPs

In this sense, a payment gateway is at the foundation

of a Payment Orchestration Platform (POP).

However, a traditional payment gateway is a static service, m

­ eaning
the payment methods are presented in the same way under all ­

What is a Payment circumstances, the route to the acquirer/PSP is fixed, and all
­transactions are sent to the same location.

Orchestrator? Any alternative routing decisions (technical failover, alternative a

­ cquirer/
PSP) are managed by the merchant – in most cases m ­ anually.

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CellPoint Digital Gateway vs. Orchestration

How do Payment For instance, if the merchant’s primary acquirer goes down, the merchant
would need to manually reconfigure the mid and the acquirer/PSP that

Orchestration work?
the transaction needs to be routed to if they have a secondary provider.
Additionally, Payment Gateways typically provide single solution options
for value-added services such as fraud management and 3D-Secure.
In this case, you can only use the service they provide, as opposed to
­having a choice of preferred providers.

By contrast, a Payment Orchestrator maintains a comprehensive

payment ecosystem of global, regional, and local acquirers/PSPs, fraud
management providers, 3D-Secure Merchant Plug-ins (MPI) providers
and other value-added services. This provides merchants the choice of
who their preference for each service.

The core of a Payment Orchestrator is a sophisticated rules engine

that allows real-time, dynamic decisioning against an infinite number of
attributes. True orchestration platforms have rules engines that can not
only determine the optimal transaction routing based on cost, approval
rates, availability, and other factors, they can also dynamically determine
which available payment methods should be presented to the consumer
at the point of checkout.

Additionally, the platform can handle intelligent decisioning of what

services to apply to a particular transaction (invoke 3DS or not, send for
Reduce Optimise Increase Automate Enable
transaction compliance transaction previously multiple fraud review or not) based on the results of previous action. All of this is
delays checks accuracy manual tasks transaction engineered to drive customer conversions while reducing merchant cost.
and types
transparency

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CellPoint Digital
The following is the flow of payment from
checkout to settlement through a Payment
Orchestration platform:
The customer selects and confirms the product/service
they wish to purchase in the merchant’s shopping cart
and presses the “PAY” button.
The merchant platform makes an API call to the
­Payment Orchestration Platform, including several
­decisions and attributes.
Payment Orchestrator will apply defined presentment
rules against the provided attributes and will determine
the appropriate payment methods (from those made
available to individual merchant) and present these
­payment methods to the consumer.
For example:
• Are instalments available?
If so, present instalment options.
• Are split payments available?
If so, present split payment options.
The consumer selects which payment method they wish
to use and enters the requested data.
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Gateway vs. Orchestration
Once a consumer enters their payment data, the
­Payment Orchestrator will apply defined business rules
to determine what, if any, services need to be applied to
the transaction and what actions to take based on the
response. For example, “3DS is invoked and is successfully
authenticated, do not send for fraud review, proceed with
authorization”.
After internal business rules have been executed, the
transaction is passed to the routing rules engine which
will determine the most optimal route to send to the
transaction (lowest cost, highest approval rate, on-us,
and more).
• If the primary route is unavailable,
the transaction is sent to the secondary provider.
• If authorization fails with a soft decline code,
it can retry with a secondary acquirer.
Successfully authorised transactions are captured
for settlement.
Payment of funds are deposited into merchants’
­settlement accounts by the acquirers/PSPs.
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CellPoint Digital Gateway vs. Orchestration

E-commerce Online Online Online service

platform shop marketplace platform

The architecture of a Payment Orchestrator

is like a traditional gateway, but with infinitely
Payment Orchestration API more built-in possibilities

Payment Orchestration Layer

Smart routing
Payment Providers

Reconciliation, clearing, billing and settlement

Banks Acquirers PSPs

Reporting

For example, in the case of a failed payment when

a payment is pending and the buyer account has
insufficient funds, or the cardholder data is identified
3rd party features
as inaccurate, the issuing bank will not authorise
the transaction. When this occurs, the Payment
Orchestration platform reroutes this transaction to
an additional processor, managing multiple vendors
Fraud / Risk solutions CC data vault Other 3rd party solutions and providing buyer and merchant with another
opportunity for a successful transaction.

This diagram shows the architecture of a possible Payment Orchestration Platform.

Specific implementations of payment orchestration might look different.
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CellPoint Digital Gateway vs. Orchestration

Why is Payment
Orchestration important?
Payment Orchestrators serve to enhance the overall
transaction process to drive merchant sales and improve
profitability. In the world of payments, the priority is to be
frictionless – the last thing that should be on a consumer’s
mind is the technical processing of their payment.

Therefore, as ecommerce transactions account for

$8.1 trillion US dollars worldwide, smooth and effortless
payment is crucial for improving customer experience,
efficiency and revenue.

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CellPoint Digital
1 / Better customer experience
The goal of Payment Orchestration is to create a frictionless
consumer journey at every juncture.
With embedded checkout and broader availability of relevant payment
methods, consumers encounter fewer hurdles to clear in order to
­complete their purchases. What’s more, recent reports revealed that
a lack of preferred payment methods contributes to 40% of customer
abandonment. If the end-consumer experience can be improved to
decrease the level of payment abandonment or failures, this will
significantly enhance revenue per transaction.
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Gateway vs. Orchestration
2 / Optimised transaction flow
In the scenario where a customer is lost due to a failed payment,
it can be because of processing failures on the side of either the
acquirer or issuer.
The intelligent routing function of Payment Orchestration allows
pending transactions to be sent to the best-performing processor in
order to avoid this outcome. In addition, if one payment processor
is down, the transaction can automatically be routed to another
processor without any interruption to the customer, which is especially
important as customers expect a frictionless payment process.
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CellPoint Digital
3 / Increased scalability
Since Payment Orchestration functions by integrating all
processes and aspects of the transaction flow under one API,
the time required to set up new payment options and add-ons
is reduced.
Consequently, a merchant can take its product to the market quicker
and reach more potential customers with a wider range of payment
options – offering the right payment type at the right time.
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Gateway vs. Orchestration
4 / Enhanced security and compliance
With traditional payment processors, cardholder data is shared
between multiple Payment Gateways and providers, weakening
protection against potential fraud.
The automatic data routing provided by Payment Orchestration lets
you control transaction routing, helping identify data inconsistencies
in real-time.
The architecture of Payment Orchestration also allows merchants to
assess several providers while maintaining consistent fraud and
compliance management across all providers, helping to make online
transactions smooth and secure in a shorter amount of time.
This is especially useful for executing smooth cross-border payments,
as the integration lets merchants adjust payment systems, services
and software (the payment stack) to accommodate international
transactions. These would otherwise require dealing with region-
specific compliance and regulations like PCI DSS, PSD2 and GDPR.
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CellPoint Digital Gateway vs. Orchestration

5 / Reduced costs 6 / Centralised reporting and analytics

As merchants grow their business and need to enhance payment Besides integrating with existing systems for smoother
performance, developing new features or integrating further transactions, Payment Orchestration platforms adapt to
payment options may be required. the payment preferences of each merchant.

In turn, this requires investment in maintenance, IT, resource, Payment Orchestrators gathers transaction information spread across
development, and licensing – all of which incur costs that add up. multiple Payment Gateways and PSPs in a single view allowing merchants
With full integration of Payment Orchestration total expenses can be to make alternative strategies driving transparency and efficiency.
reduced by up to 20% by consolidating costs under a single platform. These analytics and insights make it easier for merchants to better
manage their payments ecosystem through more informed
A Payment Orchestrator is built to integrate with existing cloud decision-making.
­software, helping merchants to reduce the cost of storage and band-
width. It enables them to aggregate data and share data with other
merchants and fraud detection services to spot, and thereby reduce
financial risk. This way, the payment stack incurs fewer fees for setting
up integrations and add-on costs for providing services like automated
­transaction routing.

Finally, additional cost savings can be found in

using multiple acquirers and routing payments
to the lowest cost or local payment providers.

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CellPoint Digital Gateway vs. Orchestration

What’s the
difference?

While payment gateways and payment orchestration

both provide businesses with electronic payment solutions,
there are some significant differences between the two.

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CellPoint Digital
Both Payment Gateways and
Payment Orchestrators bring together
and support multiple methods
of payment to carry out the payment
transaction processes.
However, a Payment Orchestrator
lends a significant further degree of
control and efficiency to the payment
system.
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Gateway vs. Orchestration
Payment gateways typically only support a limited range of
payment methods, while payment orchestration platforms offer
a wider range of payment options.
Payment orchestration also allows businesses to manage multiple
­payment providers from a single platform, while payment gateways
only support a single provider.
Gateways use a singular payment processor to deal with the relevant
cardholder data to execute a transaction, but Payment Orchestrators
are payment provider-agnostic. This means they enable merchants
to have stronger payment stacks by making it easier to manage multiple
acquirers and route payments for the best possible outcome. By using
insights across payment providers, a merchant can maximise revenue
while lowering costs.
The key distinction is the level of unification and flexibility in the
system. As we have discussed, the integration of payment software
and technology through Payment Orchestration platforms enables
merchants to adapt their payment infrastructure to changes in
­customer preferences, security requirements and new payment types
in the rapidly evolving payment landscape. Payment Orchestration is
significantly more integrated and optimised – with better outcomes
for the merchant and their customers.
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CellPoint Digital

Learn more

Request your free demo today

and see how you, your business and
your customers will benefit

Upgrade your payment options and allow your customers to pay for
your products and services exactly how they want to. Our range of
options means that you don’t have to worry about the markets in which
you operate because our platform will provide your customers with
the options they need to complete their transactions, reduce declined
payments and increase customer satisfaction.

The best part? Easy implementation that is an overlay to your existing No matter what market you’re in, you will want to ensure
relationships. faster transaction acceptances with the lowest fees possible.
Payment companies that can deliver that frictionless, optimised
experience will succeed in this growing market. Those who can’t
Find out more will fall behind.

Payment Orchestration is a powerful tool that will keep you

ahead of the competition.

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CellPoint Digital Gateway vs. Orchestration

CellPoint Digital has offices in Copenhagen, Dallas, Dubai,

London, Miami, Pune and Singapore.
Visit www.cellpointdigital.com to learn more

CellPoint Digital is a fintech leader in payment orchestration.

Our main solution is a powerful Payment Orchestration Platform that ­
optimises digital payment transactions, from cards or alternative
payment ­methods, and accelerates the deployment of new payment
options.

Merchants can easily scale their own payment ecosystem across the
world, unify the customer payment experience across their w
­ ebsite,
mobile apps and other channels, optimize the routing of each
­transaction, increase conversion rates and minimise payment costs.

©2023 CellPoint Digital Holdings Limited. All Rights reserved. This e-book is for general information
purposes only. It is not intended as a substitute for professional advice. Whilst we endeavour to keep
the information up to date and correct, CellPoint Digital makes no representations or warranties of any
kind, express or implied about the completeness, accuracy or reliability of the information, p­ roducts or
services contained in this e-book. Any reliance you place on such material is at your own risk.

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