We’re excited to welcome Paul van Alfen as a guest author on the IXOPAY blog. Paul has been writing and speaking about payments for more than 20 years, with a special focus on the travel industry. Back in 2020, he published his first article on payment orchestration for airlines, and now he’s sharing an updated perspective—complete with a new infographic and lessons learned from five years of industry change. What follows are Paul’s own hands-on insights and opinions on how orchestration has evolved, where it fits in the payments landscape, and why it matters for merchants today.
### WARNING: this content is not created with AI, it’s based on the author’s own personal hands-on experience and opinion ### 😉
Some 5 years ago, in April 2020, to be exact, I wrote my first article on ‘Payment orchestration for Airlines, enabling a multi-vendor strategy that pays off’. Time for an update! As always, let’s start with some background.
Payment Gateway Evolution
If I look at the evolution of the payment gateway (2000-2025), I see three major versions: from basic (1.0), to advanced (2.0), to full orchestration (3.0). The complexity of the (online) merchant payments ecosystem has considerably grown over the last 25 years, driven by global ecommerce, security, compliance, and new payment products, channels, and touchpoints.
Payment orchestration is now in the middle of this ecosystem, right between merchants and a wide range of providers, in a way like the yellow Circle line on the London Tube map (the inspiration for the format of my infographic). Lots has been said and written about the need for payment orchestration, about buy vs. build, speeding up the implementation timelines for new products and services, and how it can help improve success rates and reduce costs.
With this new infographic, I’m zooming out. What other lines connect to the yellow one? How important are they for the end-to-end process? What about the money flow? Who “owns” the merchant? Who is merchant-facing?
In an ideal world, a payment provider (PSP) should be a one-stop shop, covering and harmonizing the end-to-end process visualized in the infographic. Over the last 25 years, it has become clear, however, that the fast-growing demand for payment products and value-added services, for merchants in a wide range of verticals, across multiple regions, is basically impossible to cover in a single full-service / collecting model. This is due to the efforts required to absorb all the complexities, but also due to the choices made by the PSP resulting from company strategy. A ‘tech-only’ middleware can decouple the gateway and collecting component, adding flexibility, and reducing dependency on roadmaps and strategies of individual payment partners.
Payment Orchestration Defined
But let’s take a step back and touch on my definition of the role of a payment orchestration provider. First of all, it’s technology only, so outside of the money flow and contractual relationships with licensed payment processors and banks. An orchestrator should not have ‘skin in the game’ when it comes to applying business rules for transaction routing and invoking value-added services. That’s for the merchant to decide based on their own KPI’s.
So, agnostic and independent are two key characteristics. Robustness as a company and platform redundancy are also mandatory, as a merchant, you’re handing over the orchestration of the entire transaction flow; therefore, both short-term and long-term availability needs to be guaranteed.
Based on common understanding, the role of the orchestrator in the payment architecture is overarching, above all payment providers in the diagram, and with upstream connections with all channels and touchpoints. In practice, however, orchestrators are often brought in as a secondary (or tertiary) gateway to solve some pain points or to enable short-term opportunities (e.g., unlocking new markets).
Going back to the infographic, so what’s not covered by an orchestrator? Let’s start with the front end:
Vendor selection (acquirers, APM’s)
Onboarding, KYC
Contracting, terms and conditions, liabilities
Pricing (acquirers, APM’s)
Distribution / Partner management (ecommerce, billing, and booking platforms)
These responsibilities remain with the merchant’s procurement and partnership teams, feeding into their KPI’s.
What about the back-end?
Remittance, funding
Currency conversion / FX
Financial reporting
Credit Risk monitoring/collateral
End-to-end / Order to Cash (O2C) reconciliation and revenue protection
These responsibilities remain between the acquirers / APMs and the merchant’s treasury and finance teams, giving the latter full control.
Note: Orchestrators are becoming more and more like marketplaces, following ecommerce platforms like Shopify by actively adding providers to their menu of options, so that they become available (technically) ‘pre-integrated’. Charging providers' implementation and maintenance fees is now an important part of an orchestrator’s revenue model, which historically has been transaction-based.
Summary & Conclusions
Orchestration adds much-needed harmonization and control for large enterprise merchants with complex payment architectures and demanding payment strategies. In my travel payment practice, I see airlines, online travel agencies, and hotel chains switching to orchestration to keep up with regulations and compliance, but mainly to make their payment processes more effective and future-proof.
Orchestration does require a holistic, end-to-end approach to payments, though. My main lesson learnt during the last five years since my first article is that the merchant’s back office should be ready (and not a bottleneck) for any new processes and reporting resulting from adding a ‘gateway 3.0.'
Editor’s note: At IXOPAY, we share Paul’s view that true payment orchestration is about independence, flexibility, and giving merchants full control over their payment strategies. His perspective highlights why orchestration has become a critical tool for enterprise merchants facing complex global demands. Stay tuned for details on our upcoming webinar featuring Paul van Alfen, where he will join a panel discussion on the future of travel payments.
