Orchestration Curing COVID-Era Compliance Headaches

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As data privacy becomes enshrined in international law, regulatory compliance will grow more stringent and costly to companies that fail to provide the digital defenses these laws demand.

A variety of approaches can get the job done, but some outperform others. Payments orchestration is a hot commodity now for its potent capabilities in streamlining and security.

According to the October Payments Orchestration Playbook done in collaboration with Spreedly, “Organizations [rely] on payments orchestration to connect to all of their [payment service providers] through a single integration benefit as they can maintain their focus on business and customer needs. A single point of integration provides a way to more easily adhere to new and evolving regulations,” Jenna Hutt, Spreedly head of compliance, told PYMNTS.

Adding, “The pandemic has placed additional strain on many payments teams,” Hutt said, “This may be in supporting card-not-present transactions in a traditional brick-and-mortar company or [a] digital goods company seeing [its] online business expanding rapidly. Partnering with a payments orchestration team whose focus is solving for regulatory changes takes the development and maintenance burden off of internal teams.”

Relieving that burden is freeing up treasury teams to focus on what matters most — human beings and their commercial needs — while automation works away in the background.

Gateways To Success And Data Vaulting

At the orchestration level, protocols like smart routing are ensuring that transactions make it to the best available payments gateway, while detecting and adding friction to suspicious activity.

Data vaults play an increasingly important role in that sequence.

“Leveraging third-party data vaults benefits businesses by enabling access to multiple payment gateways to boost transaction success rates. Using gateway-agnostic third parties to store critical data ensures that transactions can be processed through whichever gateway would guarantee the highest success rate rather than being bound to any single payment gateway,” according to the October Payments Orchestration Playbook.

Additionally, “Using orchestration providers to help route transactions through various payment gateways can … help firms ensure that they are meeting both PCI compliance standards and relevant regulations across markets. Businesses accepting payments from clients in the European Union, for example, would be able to route their transactions through gateways that comply with GDPR and PSD2. Adopting such solutions thus helps prepare firms to transact with clients and customers around the world.”

Tokenization Takes A Bow

Along with smart routing, adding orchestration to the payments tech stack is solving complex regulatory problems with tokenization for ironclad security in a time of rampant cybercrime.

October’s Payments Orchestration Playbook notes, “Tokenization, third-party data vaults and smart routing could be particularly critical during the COVID-19 pandemic. The health crisis has not just accelerated businesses’ adoption of digital commerce options but has also raised payment fraud risks. Many firms that are only beginning to develop and expand their online capabilities do not fully comprehend how to safeguard those digital channels from fraud.”

To make the point more, well, pointy, the Playbook notes that “… the dollar volume of credit and debit card fraud in the U.S. increased 35 percent between April 2019 and August 2020, with cybercriminals exploiting the gaps in companies’ anti-fraud systems. The uptick in fraud is creating a widespread market demand for education on regulatory compliance, including explanations about what is needed to comply with standards such as PCI DSS and the PSD2. Interest is especially high amid the current economic environment’s rapid digital shifts.”

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