Payment stack: definition, key components & optimisation tips

For your customers, payments should feel effortless — a quick tap, a confirmation, and they’re done. Behind that simplicity, though, is a complex system working nonstop: routing payments to the right acquirer, running fraud checks, reconciling transactions, and providing data back to your team.

Let’s take a closer look at what a payment stack is, what it consists of, and how to build one that truly supports your business goals.

What is a payment stack?

A payment stack is a set of technologies, integrations, and operational processes that allow a business to accept, process, settle, and reconcile payments across multiple markets and methods. It influences how many payments go through, what they cost, how secure they are, and how smooth your checkout experience feels.

A strong payment stack does more than just work. It scales with you, mitigates outages, and empowers you to drive performance without needing an oversized engineering team.

What does a payment stack consist of?

At a high level, a modern stack spans six layers that work together:

Infrastructure layer

This is the foundation of the stack. It involves establishing a merchant account and forming connections with acquirers and payment service providers (PSPs) that enable payment processing.

If you only rely on one acquirer, you're basically walking a tightrope: one outage and your payments stop. That's why many merchants spread traffic across multiple MIDs and acquirers.

Processing & orchestration layer

This layer transforms raw infrastructure into a system merchants can actively control and optimise. It includes:

• Routing engines that direct traffic to the acquirer or PSP with the best chance of success. Advanced routing considers BIN, issuer, country, and plenty of other metrics.
• Cascading logic that automatically retries soft-declined transactions through alternative providers, reducing false declines.
• Tokenisation systems that replace sensitive card data with tokens, lowering PCI DSS scope while enabling secure one-click and recurring payments.

This is the layer where merchants gain leverage. Orchestration often lifts conversion by ensuring transactions are routed through the best-performing providers and by reducing false declines – all without re-integrating every time you add a new provider.

Security & compliance layer

This is the protective shield of your payment stack, which includes fraud detection tools, 3D Secure, PCI DSS compliance mechanisms, and chargeback management systems. Its role is to keep the business safe from fraud and regulatory penalties while maintaining customer trust.

The challenge is always one of balance: applying too much friction hurts revenue, while applying too little exposes the business to fraud. Sophisticated stacks use adaptive risk scoring and rule sets to fine-tune based on context.

Denys Kyrychenko

Corefy's Co-founder & CEO

Finance & operations layer

This layer ensures that payments match invoices, refunds are processed correctly, chargebacks are handled, and money reaches the right bank accounts.

It includes:

• Reconciliation engines that match transactions across gateways, acquirers, bank statements, and internal ledgers, removing manual errors and speeding up month-end closes.
• Settlement tracking to monitor when funds arrive, identify delays, and ensure correct amounts.
• Foreign exchange handling for merchants selling cross-border, including conversion rates, fees, and reporting.
• Payout orchestration for disbursing funds to partners or suppliers.

Customer experience layer

While most layers operate behind the scenes, the checkout experience is the frontline of conversion.

This layer includes:

• Checkout pages, hosted fields, and SDKs that make payments seamless while minimising PCI scope.
• Payment method selection that adapts to geography and device. For example, showing PIX in Brazil, iDEAL in the Netherlands, or Apple Pay on iOS.
• User-friendly flows with fast load times, intuitive error handling, and one-click repeat purchases powered by tokenisation.

Insights & optimisation layer

Think of this as the nervous system of your stack: dashboards, analytics, and monitoring tools that surface actionable insights.

This layer answers questions like:

• Where am I losing money to false declines or timeouts?
• Which PSP delivers the best performance by region or method?
• What's my actual cost per transaction, including hidden fees and FX?

Armed with data, merchants can continuously experiment and refine their stack, whether it's tweaking routing rules or testing new UX flows.

How to build the right payment stack?

Building the right payment stack is less about throwing technology together and more about designing a system that matches your business model, geography, and growth ambitions.

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Clarify requirements

Start by listing the markets where you already operate and the ones you plan to expand into. Note the payment methods most relevant to customers in each region. Add practical details like your expected transaction volume, the level of risk in your business model, how quickly you need settlements, and the type of reporting your finance team relies on. This helps prioritise which features you need first.

Choose your approach: build or buy

Building your own stack gives large teams full control, but demands in-house payments expertise and ongoing development resources.

Adopting orchestration gives you instant access to a battle-tested infrastructure. With one integration, you can connect to multiple providers and methods, stay agile, and retain control over performance.

Select the right providers and tools

Once you've chosen your approach, shortlist the providers and tools that will power each layer of your stack. If you're using payment orchestration, map out the PSPs, acquirers, and methods you'll connect to first.

Roll out gradually and test continuously

Start with one payment corridor and at least two MIDs (a primary and a failover). Move a small portion of traffic first, test failovers and retries, then scale up as confidence grows.

Once live, keep optimisation in your operating rhythm:

• Review dashboards weekly for issuer-level performance.
• Run A/B tests on routing, 3DS policies, and checkout UX.
• Feed insights back into your rules and keep iterating.

How to optimise your payment stack?

Building your payment stack is just the beginning. The real gains come from continuous optimisation – tweaking the dials to improve approval rates, cut costs, and deliver smoother customer experiences. Here are the main levers to pull:

Improve approval rates

Not all acquirers and issuers behave the same way. By introducing smart routing, you can send transactions to the provider most likely to approve them, based on BIN ranges, issuers, geo, or other parameters. Combine this with cascading logic – automatically retrying soft-declined transactions with another acquirer – and you'll recover revenue that would otherwise be lost.

Plus, routing transactions to providers with the lowest fees helps you slash payment costs by 15-30%.

Create a checkout that converts

Even with strong backend logic, a poor checkout experience will kill conversions. Remove friction by shortening forms, enabling one-click payments, and positioning local payment methods prominently. Regular A/B testing of method order, form layout, and button placement can unlock big conversion gains from minor changes.

Use data as a feedback loop

Your payment data contains insights that can help you improve. Here are the metrics that deserve close attention:

• Conversion rates: slice by project, provider, customer type, region, CVV/3DS status – it reveals when, where, and why users drop off.
• Decline reasons: review transaction statuses and error codes to spot patterns and fixable issues.
• Authorisation rates: track your approval ratios broken down by issuer, BIN range, or country. Use these insights to optimise your routing rules.
• User behaviour at checkout: UX friction often hides in the form. Understand where users get stuck or abandon.
• Transaction fees: route low-risk transactions to the cheapest paths while reserving higher-cost providers for segments where stronger approval rates justify the spend.

Payment data provides you with valuable information on how much each transaction costs you, which means you can set up a payment routing system that saves you money. You can also integrate appropriate alternative payment methods if your transaction costs end up being too high. It's often an issue for cross-border card transactions.

Alexandra Potapska

Head of Client Service at Corefy

Solutions for managing the payment stack

Managing a complex payment stack doesn't have to mean building everything from scratch. Payment orchestration gives you a smarter way to scale without the usual complexity, cost, and maintenance burden.

Need to enter a new market? Add a local PSP with minimal effort. Want to A/B test checkout flows? Do it without engineering support. The flexibility is baked in.

This approach speeds up time to market, reduces development costs, and keeps your team focused on product and growth. You also gain access to built-in smart routing, failover logic, and granular reporting, which provide better performance and more control.

Payment stack with Corefy

You could spend months piecing together acquirers, PSPs, fraud tools, dashboards, and integrations. Or you could start with a stack that's already been built, tested, and refined. That's precisely what Corefy offers: all the building blocks of a smart payment stack in one platform, ready to configure to your needs.

So, what do you get when you plug into our orchestration platform?

With Corefy, your payments become a single, orchestrated system – one that grows with your business.

Key takeaways

• Payments are levers, not plumbing. With the right stack, merchants can actively influence authorisation rates, costs, and churn instead of passively accepting them.
• Depending on a single PSP/acquirer is risky. Spreading traffic across multiple acquirers and MIDs protects against outages and gives more control over conversion.
• Stack design is strategic. Building a stack from scratch offers complete control but requires heavy resources. Payment orchestration platforms, by contrast, provide agility and fast access to global coverage without the same overhead.