 "Fintechs shift to direct merchant integration, move away from Juspay")
Financial technology (fintech) companies are moving away from third-party routers and payment orchestration partnerships as they seek direct integration with their merchant base.
After fintech major PhonePe ended its partnership with the payment orchestration platform Juspay Technologies, other companies, including Razorpay and Cashfree Payments, are considering moving away from the platform for orchestration services.
The development comes nearly one year after Juspay received approval from the Reserve Bank of India to operate as an online payment aggregator platform.
Companies are moving away from such third-party integrations to offer direct integrations with merchants. This shift also comes as Juspay may directly compete as a payment aggregator with these platforms, having received the final licence from the banking regulator.
A full integration with a merchant would enable companies to have control over their customer base, including data and compliance, and extend payment solutions. This move also comes as firms have ramped up investments in payment processing to ensure merchants face minimal downtime.
“We plan to transition away from integrations via third-party routers and orchestrators. By offering direct integration, we can accelerate the delivery of features and offer superior support and merchant experience,” a spokesperson for Cashfree Payments said in response to Business Standard’s query.
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Razorpay also confirmed the development, adding that it will pause all integrations through third-party routing platforms.
“We will offer payment gateway services through our own, direct integrations with our customers. We believe that only through direct integrations can we ensure our latest innovations reach our customers swiftly and enhance their operations and experiences seamlessly,” a spokesperson for Razorpay said.
Digital portal The Head and Tale first reported Cashfree's and Razorpay's decision to move away from Juspay.
Payment companies partner payment orchestration platforms to improve transaction success rates. 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.
“We would like to clarify that Juspay Orchestrator is not a payments intermediary. We are a technology service provider to the merchants, similar to how they use Cloud and infrastructure software-as-a-service. It is the merchants who partner Juspay Orchestrator and payment aggregators separately. Therefore, the media talking about payment gateway partnerships or ‘ending partnerships’ with Juspay in this context is factually incorrect,” Juspay said in a blog.
The blog also explained that any merchant’s choice to use Juspay Orchestrator or build it in-house is similar to their decision on technology software/services like C++, Java, Amazon Web Services/Google Cloud Platform, etc.
“We strongly believe that it is the independence of the merchants to use any technology and services of their choice, and we are committed to continuing to deliver value through Juspay Orchestrator to meet and exceed their expectations. Interoperability and open systems have been the bedrock of innovation.”
The blog further added that the same lens of interoperability and open systems must be applied in the interest of merchants, with respect to orchestration and payment aggregators. “Payment aggregators are also building their own third-party routers — Razorpay (Optimizer) and Cashfree (FlowWise) — and we welcome that. We look forward to them also standing up for interoperability,” it said.