How Combining Payment Orchestration and Vault Tokenization Can Accelerate Merchants Payments Success
A Comprehensive Guide to Payment Orchestration and Vault Technology for Merchants and Marketplaces
As we have arrived into the fourth quarter of 2024, many of my conversations have been about Strategy.
Especially from a Merchant's perspective, the number one question I get is: “How can we improve our Payments Stack over the next 3 to 5 years?”
Unfortunately, the answer isn’t as simple as I would want it to be.
Depending on where a merchant is in their business lifecycle, there are different subjects they should be focussing on.
However, to ensure you can focus on topics such as Payment Optimization, Fraud Prevention, or Cost Reduction, a key difference maker is ensuring you have a payment stack in place that helps you achieve that.
So, in this newsletter, I will explain how the combination of Payment Orchestration and Vault Tokenization can help create the right foundation for merchants to achieve their payment operational goals.
Let me explain…
Understanding Payment Orchestration
While payment orchestration isn’t new, it has definitely evolved over the past year. So, instead of assuming we know what it means, let me first explain how I describe it and what challenges merchants face if they don’t use it.
What is Payment Orchestration?
Payment orchestration is a payment infrastructure that enables merchants to seamlessly manage multiple payment service providers (PSPs), acquirers, and payment methods across different markets and platforms.
Think of it as the control center that directs payment traffic. It ensures that the right transactions go through the right channels while handling routing, authorization, fraud checks, and compliance across a variety of endpoints.
Nowadays, merchants, from early inception through enterprise, deal with multi-country operations, marketplaces, and omnichannel setups. And often, one PSP cannot provide everything they need. So, orchestration becomes the backbone of payment processing.
This is especially true for companies operating at scale, as it provides them with the flexibility to work with multiple PSPs, avoiding vendor lock-in and optimizing transaction performance.
Without payment orchestration, merchants are left to manage complex systems of separate, fragmented payment setups.
For enterprises that deal with multiple brands or global transactions, this can result in significant inefficiencies, which can create a ripple throughout their payment stack, ranging from lower-than-expected payments performance to delayed reconciliation or even redundant infrastructure costs.
Challenges Merchants Face Without Orchestration
For merchants who want to scale but decide to go without orchestration, this often leads to several issues.
Imagine a company like Disney, which, in addition to its theme parks, movie studios, and intellectual property, also owns and operates several digital brands, such as Disney+ and ESPN. Each of its subsidiaries has its own distinct payment flows and infrastructure.
Without a unified orchestration layer, every platform would need to integrate its own Gateways, PSPs, and processors independently.
For companies like Disney, this means spending money on payments infrastructure in every division. In addition to the higher costs, this also increases the likelihood of dealing with multiple points of failure, where data could be handled incorrectly.
Additionally, each brand might route transactions through different providers, creating reconciliation challenges and raising operational costs.
Disconnected systems like this mean merchants will likely pay for duplicate services (such as Network Tokens and account updater) across payment processors. This also limits their ability to make strategic changes quickly, as each platform must undergo independent updates, certifications, and regulatory checks.
In other words, merchants who are dependent on single providers often struggle with downtime or outages because they lack a failover mechanism across multiple PSPs.
Moreover, managing multiple flows without orchestration increases the complexity of compliance.
Handling PCI DSS across various PSPs, gateways, and processors individually can lead to gaps in security and higher risks, not to mention the cost burden associated with managing these requirements.
Why Payment Orchestration is Essential in a Multi-PSP World
For merchants operating in a multi-PSP world, payment orchestration offers clear advantages.
Orchestration reduces the complexity of managing multiple PSPs and acquirers by centralizing transaction routing, fraud management, and compliance.
Instead of relying on each individual processor’s infrastructure, merchants can control where and how transactions are routed, choosing the best path based on criteria like cost, speed, or geographic availability.
This centralized control doesn’t just simplify payment management—it optimizes it.
Through payment orchestration, merchants can reduce failed transactions by intelligently routing them to alternative acquirers or PSPs in case of network outages or performance issues. Additionally, this setup enables businesses to maintain high authorization rates by selecting the best acquirer for a given transaction type, geography, or currency.
Another significant benefit is the ability to streamline compliance.
When using orchestration, sensitive data such as cardholder information can be tokenized and vaulted across the entire payment stack, drastically reducing PCI DSS scope and security risks.
This is particularly valuable for enterprise merchants or marketplaces that handle large volumes of transactions and need to maintain regulatory compliance across multiple jurisdictions.
The flexibility and scalability of orchestration also allow merchants to integrate value-added services like fraud detection, chargeback management, and dynamic 3DS authentication without adding operational overhead to their systems. This modular approach enables businesses to innovate, expand, and adjust their payment setup as they grow or enter new markets without the burden of overhauling their infrastructure.
Vault Technology: A Merchant's Secret Weapon
However, with orchestration across multiple PSPs, dealing with multiple integrated solutions for fraud detection, and 3DS authentication, the risk of sensitive data being exposed increases.
Because of that, Vault Technology is turning into the secret weapon of merchants who understand payments at a higher level.
What is Vault Technology?
While it might not be a topic that is often discussed, vault technology lies at the heart of any secure payment infrastructure. For merchants managing large amounts of sensitive data, it has become an essential tool.
Vaulting, paired with tokenization, ensures that payment data such as cardholder information (PCI), personally identifiable information (PII), and Know Your Customer (KYC) data is stored securely and remains compliant with regulatory standards like PCI DSS.
In simple terms, tokenization replaces sensitive data (e.g., a credit card number) with a unique, non-sensitive identifier, or token, that is useless to bad actors if intercepted.
The actual data is stored in a secure vault, a highly fortified environment designed to protect this information from breaches.
For businesses, especially those operating across multiple regions or managing multiple brands, vault technology provides a way to securely handle sensitive data without the operational complexity of managing it themselves.
How Vaulting Helps Multi-Brand Merchants
For large enterprises or multi-brand merchants, the value of a centralized vault cannot be overstated.
Let’s take a company like Nike, for example, which operates both physical and digital payment channels.
In a traditional setup, Nike would need to manage separate storage systems for in-store transactions (processed through one provider) and online transactions (processed through another), potentially duplicating sensitive customer data across multiple systems.
With a universal token vault solution, Nike can consolidate these disparate data points into a single, secure vault.
Whether a customer orders through the app, pays in-store or uses a mobile wallet, the sensitive payment data is tokenized and securely vaulted while remaining accessible for authorized processes across the brand’s multiple channels.
This doesn’t just streamline payment reconciliation; it also enhances the customer experience by providing a unified and secure system that follows customers across different interaction points with the brand.
This benefit is significant: instead of duplicating sensitive information across different processors, brands like Nike can securely store customer data once and use it across all channels—whether they are expanding globally or rolling out new services.
Additionally, vault technology ensures that companies like Nike stay PCI compliant, reducing their regulatory burden by removing sensitive data from their infrastructure.
Why Tokenization is Not Just About Security
While vault technology is often seen primarily as a security measure, its business benefits extend far beyond keeping data safe. When combined with vaulting, tokenization allows merchants to operate more efficiently and flexibly.
For instance, using tokenization, merchants can reduce their PCI DSS scope by ensuring that sensitive cardholder data never touches their servers, significantly lowering their compliance costs.
But beyond this, tokenization facilitates operational efficiency.
One key feature is the ability to manage network tokens and account updates centrally, ensuring that transactions are processed using the most up-to-date payment credentials without requiring merchants to chase down expired or outdated card information manually.
Consider the account updater functionality: for recurring transactions (e.g., subscriptions or memberships), tokenization ensures that when a customer’s card expires or is reissued, the transaction can still proceed seamlessly without customer intervention.
By keeping network tokens updated, merchants minimize failed transactions, improving revenue retention and reducing operational friction.
Moreover, tokenization and central vaulting open the door to cross-platform and omnichannel capabilities.
As businesses scale, particularly across borders or into new verticals, vault technology enables them to deploy a single, consistent infrastructure across all platforms and regions.
This reduces the complexity of managing multiple payment providers, eliminates redundancies, and ensures the business can grow without the risk of fragmented payment ecosystems.
Vault technology, therefore, is not just a tool for security.
It’s a fundamental enabler of operational efficiency, revenue optimization, and strategic flexibility, particularly for merchants operating at scale in today’s complex, multi-PSP world.
Integrating Vaults and Orchestration: A Powerful Combination
Creating a Unified View for Merchants
Integrating vault technology and payment orchestration is the key to giving merchants a unified view of their customer interactions across multiple channels and brands.
This is especially critical for businesses that handle in-store and online transactions across different payment providers and geographies.
Orchestration centralizes payment routing, while vaulting securely stores sensitive customer data in one location, such as card details and personally identifiable information (PII).
Together, these technologies eliminate data silos by ensuring that regardless of the transaction channel, whether a customer is shopping online, paying in-store, or using a mobile app—the same set of tokenized payment credentials is used.
This unified approach enhances payment processing, merchants' management of customer loyalty programs, refunds, and fraud prevention.
Solving the "Single Point of Failure" Problem
The reality is that in traditional payment setups, relying on a single processor or service provider creates a significant risk: a single point of failure.
If one system goes down, the entire payment flow can be disrupted, leading to lost revenue, frustrated customers, and damage to brand reputation.
Most fast-growing merchants don’t learn this lesson until it is too late when they realize that it could have been prevented if they had an orchestration and universal token vault in place.
By using a universal token vault, merchants can store and manage network tokens, PSP tokens, and account updates across their entire payment stack.
This flexibility reduces the chances of failure and enables merchants to adapt quickly to changing market conditions, integrate new services, and scale their operations without the need for major infrastructure changes.
Eliminating the single point of failure and replacing it with a flexible, modular payments approach are the solutions.
The Future of Payments: Where Tokenization and Orchestration are Heading
The Rise of Multi-Brand, Multi-Geography Payments
In my work as a Payments Strategist, I continue to be amazed at the global reach merchants have achieved in just a few years of business.
Going forward, I expect this trend to continue and that we will see more merchants choose to configure their payments infrastructure so that they can operate it across multiple brands and geographies.
Tools such as orchestration and universal token vaults will be at its core, allowing merchants to select additional services that fit seamlessly into their stack without having to worry about storing and managing sensitive customer payment data and being compliant with local data security regulations, such as PCI DSS or GDPR.
Conclusion
Key Takeaways
In today’s rapidly evolving payments landscape, managing complexity, ensuring security, and optimizing operations are top priorities for any merchant or marketplace.
Payment orchestration and vault technology provide a powerful combination to tackle these challenges head-on.
By integrating orchestration, merchants can centralize transaction routing, manage multiple PSPs, and optimize for cost and performance.
Vault technology complements this by securely storing sensitive data, reducing PCI scope, and offering flexibility across all payment channels and geographies.
Together, these tools allow businesses to scale efficiently, operate across global markets, and deliver a seamless customer experience while maintaining high security and compliance.
The benefits for enterprises are clear: reduced operational costs, minimized risks from single points of failure, and the ability to adapt quickly to new opportunities and challenges in the payments space.
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