Payment reconciliation is essential to ensure the accurate cash flow, calculate fees, and identify transaction discrepancies. For merchants, it’s a complex process involving multiple variables (currencies, exchange rates, local regulations and taxes, etc.) and fragmented data across diverse providers. In this article, we explore the key aspects of payment orchestration to streamline this process.
Reconciliation is a critical process for merchants to ensure end-to-end traceability of cash flow, gain clarity on fees and settlement timeline tied to each transaction.
The high volume of transactions and the interplay of multiple variables involved in the payment operations make this process specially complex for merchants, who often have to address reconciliations manually.
As a result, merchants frequently encounter issues identifying discrepancies in settled amounts—such as unexpected deviations, overcharges, or erroneous fees—and face challenges in accurately recording every transaction.
In fact, deviations or minor overcharges of less than 1% can lead to thousands of dollars in losses. Several factors add complexity to reconciliation and may lead to these kinds of discrepancies:
Nowadays, merchants operating across multiple geographies are more common than ever. As a result, these businesses must deal with different processors, currencies, exchange rates, and cutoff times, increasing the risk of errors.
Furthermore, reconciliation across different acquirers and providers poses a technical challenge, as each has its own reporting format and frequency.
Companies handling installment payments or partial payments also face difficulties, as reconciliations must reflect payments distributed over time alongside associated financing fees. In sectors such as airlines, reconciling ticket sales with ancillary services further compounds the complexity.
Local regulations are another factor of complexity, requiring the registration and reconciliation of taxes in each region. For example, in Brazil, there are different tax schemes based on region and product, while in the European Union, each country has its own VAT rules.
Considering all these complexities, the lack of an automated reconciliation process between internal systems and payment platforms can result in significant delays and hours of extra work.
According to PwC, manual reconciliation can consume up to 30% of a finance team’s workload.
Businesses that streamline their reconciliation processes can accelerate decision-making by 35% and reduce data management costs by nearly 25% (IDC).
This is the power of payment orchestration platforms (POPs), which not only maximize sales, reduce costs, and mitigate fraud but also optimize end-to-end reconciliation, simplifying merchant operations and providing enhanced business visibility.
Here are 7 ways POPs simplify payment reconciliation:
These platforms, in addition to centralizing the integration of key providers such as PSPs, acquirers, and fraud prevention services, can automate the data collection and reconciliation process among all these actors.
By applying artificial intelligence to these processes, their systems learn patterns and automatically detect discrepancies, making reconciliations faster and more accurate.
As a result, businesses can eliminate the operational burden of manually consolidating data from providers that use various formats and technologies to share information (APIs, SFTP, webhooks, etc.).
Considering the diversity of currencies, cutoff times, and regulations in multiple markets, POPs allow businesses to configure specific rules for each region or provider, ensuring that every transaction complies with local standards.
For example, in Brazil, rules can be configured to apply ICMS, PIS, and Cofins (adjusting for regional and product variations), while in the EU, rules can be set to apply VAT according to each country's regulations.
This flexibility minimizes errors and ensures reconciliation meets the specific requirements of each market.
The variety of formats and data sources among providers complicates access to a unified view of information. POPs address this issue by automatically standardizing reports, as consolidated reports of all settlements issued by the acquirers, delivering clear and actionable insights within a single platform.
This way, businesses can track different KPIs in real-time, such as GMV, acceptance, fraud, or customer behavior insights (payment methods, preferred products, or recurrent days/times), enabling fast and precise iterations on campaigns and strategies.
Moreover, reconciliation keys can be configured—such as transaction identifiers, card data, dates, amounts, and payment methods—for more accurate alignment across records from different sources.
Businesses can access a clear and centralized view of information, with dashboards to monitor in real-time the reconciliation rates by provider, country, or transaction type, as well as to quickly identify discrepancies in settlement amounts or payment timelines.
These dashboards also help to centralize and analyze fees from all payment processors, delivering essential data for more efficient and transparent financial management.
As transaction volumes grow, POPs ensure data reconciliation can scale seamlessly. Leveraging high-availability and scalable databases, these platforms handle large transaction volumes without performance issues.
This capability is essential for businesses operating in multiple markets and managing high sales volumes, ensuring reconciliation processes remain efficient at all times.
POPs facilitate comprehensive auditing and tracking of all transactions, ensuring every reconciliation is documented and easily verifiable.
This provides teams with full control over completed reconciliations, adding clarity and transparency to a company’s financial processes.
Discrepancies in reconciliations—such as errors in amounts or dates—are common when manually reconciling transactions across multiple providers and currencies.
Payment orchestration efficiently manages these discrepancies by configuring reconciliation statuses and sub-statuses, facilitating the prioritization and swift resolution of issues.
DEUNA empowers businesses to automate payments reconciliation, providing capabilities to minimize time and operational costs. This enables finance teams to focus on strategic tasks with a clearer visibility of settlement timelines, costs, and projected revenues.
Additionally, DEUNA’s platform delivers the flexibility required to adapt quickly to changes, such as integrating new providers or expanding into new markets, without disrupting reconciliation processes.
Want to learn more about our solutions? Visit deuna.com or schedule a meeting here with one of our experts.
