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Payment routing is a go-to technology for payment processing, built for online businesses and institutions that accept payments by working with multiple payment service providers (PSPs). It implies sending each transaction to the most suitable PSP or acquirer based on selected parameters. That’s why it’s inapplicable to merchants with a single PSP.

How does it work?

There are two fundamental ways in which payment routing works.

The first is known as static payment routing and requires the manual creation of complex routing schemes. Then, such a scheme will unswervingly be used to transfer each transaction to the relevant payment service provider, regardless of any occurrences.

The second one is called dynamic payment routing and is much more agile. In this case, the rules used for payment allocation are dynamic, meaning they can switch in real time to adapt to changes.

Moreover, some payment service providers enable intelligent or smart payment routing. Basically, it’s a solution that uses the company's transaction data to train itself to predict the best route for every single transaction in real time.

Should I use it?

It is recommended to look for a solution for transaction routing If:

• Your processing setup features more than one PSP or acquirer;
• You provide services to buyers from different countries and need support for local methods along with international ones;
• The number of transactions your business processes exceeds tens of thousands;
• You’re a high-risk business;
• Your company suffers from low conversion levels and PSP downtimes.

First of all, you’ll need to find a technical payment partner that offers such a feature and connect it. Then, it’s time to develop a payment routing strategy in a way that will meet your specific business needs. For example, if your aim is payment processing costs optimisation, the relevant parameter for routing is a transaction fee.

Payment routing parameters

The list of the parameters you can consider when building a routing scheme depends on the payment service provider. Some of the parameters Corefy can use to determine the best way for an online transaction are card issuer (country, bank, INN/BIN), card type and brand, authorisation mode (CVV/3DS), country of the buyer, store, transaction amount, transaction currency, date and time of payment, and metadata.

Another important feature in the payment infrastructure is cascading. In a complex multiple provider setup, this technical solution instantly and automatically forwards the online transaction to a different PSP in case of failure.

For example, imagine the first PSP that the transaction goes to according to your routing scheme declines the payment for some reason, be it risk assessment, authorisation error, provider’s downtime or anything else. With cascading enabled, the failed transaction will be routed to a different PSP for a retry. It allows merchants to increase the acceptance rate and improve customer experience, thanks to everything happening seamlessly for the buyer.

These online payment processing technologies usually come tied in.

Payment routing enables online businesses that have multiple merchant accounts at different PSPs to gain three main benefits:

• Optimised payment performance. Intelligent payment routing provides merchants working with multiple payment providers with a great opportunity to increase the acceptance rates, boosting conversion and overall performance.
• Considerably lower transaction cost. When working with multiple PSPs, you can send each payment to the provider that charges the lowest fee. It is an issue of vital importance for merchants operating in different countries & using various currencies, as local acquirers charge higher costs for processing transactions made using foreign cards. Moreover, a bank that issued a card is more likely to process its transaction faster and cheaper than a different one. Intelligent routing will let you benefit from these facts and save a great deal of money.
• Protection from downtimes and failed transactions. Though intelligent routing isn’t a remedy to every single merchants’ payment ailment, it helps to alleviate the risk of losses caused by unfavourable issues on the specific payment provider side. Additionally, it allows retrying declined transactions with a different PSP, saving your sales.

How can Corefy help?

After a single integration with Corefy, you’ll receive an advanced technical infrastructure allowing you to handle your global payments and payouts easily. Our payment platform is designed to boost your performance and scalability and help you to access specific local markets faster, being able to accept hundreds of local currencies and online payment options. With us, you can streamline your global expansion by connecting to new acquirers and payment service vendors with minimal costs.

As for the payment routing, our intelligent engine empowers merchants to implement various optimisation strategies:

• By fees. Transaction fee value is among the routing parameters a merchant can use to decrease payment processing expenses and PSP charges.
• By conversions. We assess the performance across all your merchant accounts at payment service providers to send your transactions to the best PSP.
• By balance. All your payments can be automatically routed to a single specific merchant account with a relevant balance.
• By ratios. The system allows you to split income and risks among merchant accounts at specific PSPs.
• By turnover. A merchant can set up turnover limits for all the merchant accounts they have and split their cash flows accordingly. This option is also advantageous if you need to handle limits set by a PSP.

Moreover, our business customers can create tailored mixes of various strategies and set specific strategies for each merchant account individually — all with no development efforts.

Contact us to learn more about how to handle it and see a live demo of our technical infrastructure capabilities.