 "'Need to question PAs' intention of moving away from third-party routers'")
Payment orchestration platform Juspay expects minimal impact on its business, even as payment aggregators (PAs) such as PhonePe, Cashfree Payments, and Razorpay have notified merchants of their decision to move away from third-party payment routers, a senior company executive said.
Merchants partner with payment orchestration platforms, or third party routers, to improve transaction success rates.
Bengaluru-based Juspay, which has close to 500 large and enterprise merchants, expects a “vast majority” of them to stay back, without severing ties with the company, said Sheetal Lalwani, co-founder and chief operating officer (COO), Juspay Technologies.
“What is happening is that PAs are not breaking ties with Juspay. They are actually breaking ties with the merchant, saying if you use a third-party router, I will not support it. That is the email communication which has gone out to them also,” Lalwani said in an interaction with Business Standard.
He stressed that the intent of PAs to move away from third-party orchestration platforms should be questioned to ensure the space remains competitive.
In a blog post on its website, Juspay clarified that merchants independently partner with Juspay’s orchestrator and payment aggregators. The merchants, not the PAs, pay Juspay for its orchestration services.
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“Their intent needs to be questioned. Why would you go and tell a merchant you can’t use third-party routers despite the fact that there are enough merchants. If you want to build a great product, you can take it to them and compete,” he said.
Meanwhile, PAs believe that direct integrations with merchants will enable faster delivery of their latest offerings and lead to service improvements, ensuring a superior user experience.
The communication about moving away from third-party routers by other PAs also comes at a time when Juspay has received the final nod to operate as an online payment aggregator, directly competing with firms in a similar service while also providing orchestration services.
“There is no need for us to do PA. We got the licence since the space is heavily regulated, and it opens up for other things such as Bharat Bill Payment System (BBPS), and Payment Aggregator-Cross Border (PA-CB), among others. I have no plans of pushing out all the PA partners who have worked with us,” Lalwani added.
The decision to move away from third-party routers like Juspay also comes at a time when Razorpay and Cashfree Payments have developed their own orchestration platforms Optimizer and FlowWise, respectively.
Juspay’s blog further added that the same lens of interoperability and open systems must be applied with respect to orchestration and payment aggregators in the interest of merchants.
“Payment aggregators are also building their own third-party routers — Optimizer (Razorpay) and FlowWise (Cashfree) — and we welcome that. We look forward to them also standing up for interoperability,” it said.
A full integration with the merchant would enable PAs to have control over their customer base, including data and compliance, and extend payment solutions. Firms have ramped up investments in payment processing to ensure merchants face minimal downtime.
The orchestration platform is responsible for evaluating available payment methods and gateways while factoring in variables such as speed and reliability that may lead to a successful transaction.
It orchestrates transactions through the most efficient payment gateways at a given time. In essence, if a primary payment gateway is experiencing downtime, the platform is responsible for rerouting the transaction to another gateway, preventing disruption of services and effectively saving a merchant from a failed sale.