The End of Build, Buy, or Partner? Welcome to the Age of AI Orchestration

In payments technology, companies have traditionally faced three choices: build a new system internally, buy an off-the-shelf solution, or partner with a technology provider. Each approach has clear pros and cons.

Building requires significant in-house technical expertise, which many organizations may not prioritize developing. Buying is increasingly rare, as most systems now operate on a subscription or service model. Partnering—integrating external solutions into existing systems—has become the dominant strategy.

Yet all three approaches often serve a common purpose: patching rather than replacing legacy infrastructure. A significant proportion of bank IT budgets—up to 70%—goes toward maintaining and updating outdated systems. Full system overhauls are rare due to the operational risk involved. As a result, most financial institutions operate with a complex blend of legacy and modern systems, gradually modernized over time.

However, a new approach is emerging. AI-enabled orchestration layers offer a fourth path: one that can complement and optimize existing infrastructure without the need for disruptive replacements. This model promises pragmatic, cost-effective, and low-risk modernization—and is already influencing global banking operations.

What is payment orchestration?

Processing a payment is rarely a simple transaction between two parties. It often involves multiple players across various geographies and platforms, with processes that must occur in milliseconds.

A payment orchestrator coordinates these complex interactions, optimizing the route each transaction takes. This improves acceptance rates, especially for cross-border payments, by ensuring each transaction flows through the most efficient and compliant channels. Instead of working with multiple payment providers individually, merchants can connect through a single orchestrator, gaining access to a broad ecosystem of services tailored to different needs.

Beyond transaction routing, orchestration provides merchants with critical data insights. A holistic view of payment performance allows businesses to analyze customer behavior, identify patterns, optimize processes, and detect fraud. When used effectively, these insights drive significant operational improvements and cost savings.

Ultimately, the purpose of orchestration is to streamline payments, reduce costs, and improve customer experience.

The Role of AI

While public discussions about AI have largely focused on Large Language Models (LLMs) like ChatGPT, the application of artificial intelligence in payments is broader and more impactful.

Payments systems generate massive volumes of data, much of which historically remained underutilized. AI-driven analysis can extract actionable insights from this data at both macro and micro levels. These might range from identifying shifts in customer payment preferences to pinpointing slight variations in acceptance rates based on provider choice or transaction timing.

AI-enabled orchestration enhances these capabilities further. By linking card management, user experience layers, third-party services, ledgers, reconciliation systems, and more into a unified intelligence platform, AI can dynamically optimize payment flows. It can lower transaction costs, improve foreign exchange processes, and reduce fraud and payment failures—all in real-time.

The orchestration layer in action

Think of a payments ecosystem as an orchestra composed of a mix of legacy systems and newer technologies. A conductor—in this case, the AI orchestration layer—ensures that all elements perform in harmony.

AI orchestration offers practical benefits:

• Fraud prevention: Real-time transaction risk scoring and automatic escalation steps, such as biometric authentication, help reduce chargebacks and increase security.
• Revenue optimization: Techniques like smart decline recovery (retrying failed transactions or offering alternative payment methods) can directly boost conversion rates.
• Regulatory compliance: Built-in features for AML (anti-money laundering) and KYC (know-your-customer) processes simplify adherence to complex regulations, reducing reliance on manual oversight.

By integrating these capabilities, AI orchestration reduces operational friction while enhancing performance and customer satisfaction.

Moving Beyond Traditional Models

AI-enabled orchestration represents a shift beyond the traditional build, buy, or partner strategies. Instead of replacing systems wholesale or layering one-off solutions, financial institutions can gradually integrate AI orchestration across their existing platforms. This phased approach lowers risk and protects core operations.

Modern orchestration solutions often operate within secure environments such as Virtual Private Clouds, ensuring that sensitive financial data remains protected while enabling interoperability with standards like ISO 20022.

The results are clear: fewer fraudulent transactions, higher payment success rates, more streamlined compliance, and a faster, more intuitive customer experience—all achieved without the need for disruptive system overhauls.

As banking and payments ecosystems continue to evolve, AI-enabled orchestration offers a compelling path forward: flexible, efficient, and built for the realities of modern finance.