Discover how payment routing optimizes transaction approvals, reduces costs, and improves efficiency. Learn the benefits of smart payment routing for PSPs and online businesses.
With more businesses selling online than ever, smooth and efficient payment processing is more important than ever. High fees, failed transactions, and fraud can eat into revenue and frustrate your customers. To reduce these risks and improve payment success rates, businesses are turning to payment routing, a system that helps direct transactions through the best possible route.
A more advanced approach is smart payment routing, which is especially useful for payment service providers (PSPs). It not only speeds up transactions but also helps reduce costs, manage risks, and fine-tune routing based on specific providers, merchants, and stores. This article will explain how smart payment routing works and why it can be a game-changer for your business.
In a standard payment system, transactions go through a single payment gateway or acquirer, which can lead to high fees or failed payments. Payment routing helps solve this by automatically choosing the best route for each transaction. It improves payment efficiency by considering factors like cost, speed, success rate, and compliance with regulations.
Payment routing directs each transaction through the best available path based on set rules. This helps streamline the process and meet business needs. Here’s how payment routing works:
If a route is unavailable or a transaction fails, the system logs the issue, and the user can choose to retry the payment or manually select a different route.
Smart routing is a more advanced approach that analyzes the conditions of different banks and acquirers. It automatically directs each transaction to the best option, considering rates, terms, and potential risks.
Unlike standard payment routing, intelligent payment routing uses real-time data and smart algorithms to find the best route for every transaction.
Based on real-time data, smart algorithms determine:
The smart transaction routing system continuously adjusts to changing conditions:
| Feature | Standard Payment Routing | Intelligent Payment Routing |
|---|---|---|
| How It Works | Sends payments through a fixed bank | Automatically picks the best route |
| Flexibility | Limited – tied to specific partners | High – dynamically chooses the best option |
| Speed to Process Payments | Can slow down if overloaded | Spreads transactions across multiple channels |
| Fees | Fixed or set by a provider | Finds and selects the lowest available fees |
| Security | Basic fraud protection | Advanced fraud detection |
| Optimization | No automatic adjustments | Custom rules for routing at provider, merchant, or store level |
| Transaction Control | Limited tracking | Full monitoring and detailed reports |
Today’s PSPs need to be fast, flexible, and efficient. Intelligent payment routing from eComCharge helps PSPs streamline transaction flows, manage risks, and cut costs for their customers.
With eComCharge’s payment routing solution, PSPs can optimize processes, enhance security, and distribute transaction loads more effectively. By combining automation, smart data analysis, and real-time transaction monitoring, eComCharge gives PSPs a reliable and cost-effective payment routing solution.
In the fast-moving world of online payments, smart transaction routing isn’t just an advantage — it’s a must-have for businesses to succeed.
eComCharge develops and delivers the PCI DSS Level 1 certified White Label Payment Platform beGateway for Payment Service Providers and Payment Orchestration.