Intelligent Dynamic Payment Routing
IXOPAY's payment routing engine helps you reach your payment processing goals, optimize transaction costs, increase acceptance rates, protection against provider downtime and distribute your payment load.
What is dynamic payment routing?
Dynamic payment routing is a key feature in multi-provider setups, giving you far more control over your payment strategy. It allows you to customize your payment flows, implement flexible load distribution, lower transaction costs and use fall-back routing and cascading in case a provider is unavailable.
To process a transaction, every component in the payment ecosystem must work in tandem. Acquirers, issuers, payment providers etc. must come together to ensure an optimal payments process. What looks simple to the end customer and only takes seconds to complete is the result of a complex interplay between multiple connected stakeholders.
Why should businesses use multiple payment providers to process transactions?
Interruptions to your payment processing results in declined transactions, checkout abandonment and lower customer retention. A multi-acquirer setup provides a seamless service that protects your revenue stream by integrating multiple payment service providers and acquirers via a single API. If one service provider is unavailable (e.g. for technical reasons), you can automatically route transactions through another provider.
Enterprise merchants with access to multiple payment integrations to acquirers, PSPs, gateways etc. can increase payment acceptance rates and lower their processing fees.
A multi-acquirer set-up is best practice for both regional and global merchants. It provides flexibility, independence, and protects payment flows from unexpected outages or other surprises.
A successful eCommerce enterprise needs uninterrupted processing of payment transactions. Integrating with multiple payment service providers protects payments. If one of the individual service providers is unavailable (e.g. for technical reasons), you can seamlessly switch to an alternative provider.
How can merchants optimize their payment paths/routes between multiple payment providers using routing technology?
Our Smart Routing Engine optimizes the interplay between multiple payment service providers and payment methods. By routing transactions to the most appropriate acquirer based on geo-location, risk assessment, and platform specific data, authorization rates can be increased significantly. It calculates the best possible route across banks and MIDs, configuring rules in real time to track results and adapt possible scenarios depending on client needs.
A payment stack should provide the opportunity to connect to payment methods and payment services providers (PSPs) in multiple countries. To benefit from these connections, payments must be routed to the most appropriate PSP or acquirer. With our Smart Routing Engine, different flow strategies can be implemented for payments based on a set of personalized rules, increasing conversions while simultaneously cutting costs per transaction.
Criteria that you can select for making payment routing decisions are card data, customer data, geolocation, risk assessment, and platform or application-specific data. Configure rules that enter into effect immediately via an easy, drag&drop graphical interface.
Key features of payment routing technology
When connected to multiple payment service providers, payment routing can help protect payments, reduce processing fees, and improve authorization rates. The IXOPAY routing engine is flexible and intuitive and has features such as:
- Load balancing - distribute payments across PSPs
- Cascaded transactions - deal with outages and failed transactions
- Geographical optimization - reduce decline rates and fees
- Risk based routing - improve authorization rates
- Fallback routing - handle errors and outages
1.Transaction Load Balancer: Split and Distribute Payment Volume
Use the IXOPAY Smart Routing Engine to distribute payment volume across your PSPs. Load balancing – where you automatically switch transactions between various payment providers – ensures that the highest performing providers handle the essential parts of your transactions and helps mitigate risk for high-risk merchants. It also stops you from exceeding contractual volumes. You can also directly compare multiple solutions by implementing A/B testing.
2. Cascading
Set up cascaded transaction processing to protect your payment flow in the event of technical problems such as an outage, commercial disputes, or other business challenge. If a transaction fails with the first payment service provider, IXOPAY's Smart Routing Engine automatically forwards the transaction to an alternative service provider until the transaction can be processed. This increases the chance of the transaction completing successfully.
3. Geographic Optimization and Cross-border Payments
Geographic criteria are relevant to both selecting the cheapest payment service provider and reducing decline rates. Local providers typically charge lower processing fees while benefiting from higher authorization rates.
For example, the IXOPAY Smart Routing Engine (together with the Fee Management Engine) ensures that credit card transactions are forwarded to a regional payment service provider depending on the country of origin of the card. This reduces the transaction fees and increases conversion rates.
You can choose to prioritize local payment methods in the list of available payment options at checkout, e.g. SOFORT for customers in German-speaking countries, iDeal for Dutch customers, or PostePay for Italian customers. This is a simple and effective way to increase your conversion rate.
4. Risk-based Routing
Use the risk classification of an individual transaction to determine the ideal routing. Improve authorization rates and send transactions to the most relevant providers. Check risk scores based on rules and push transactions to the most appropriate providers, in order to improve chances of authorization. Catch fraudulent transactions and lower fraud rates with transaction risk analysis, which not only checks risk scores but also other account risk factors in order to confirm that no abnormal spending or behavioral patterns of the payer are identified to reduce payment fraud.
5. Transaction Fallback
The technical availability of your payment service provider is mission-critical, particularly when batch processing transactions (e.g. for recurring services). The payment fallback routing occurs when a transaction cannot be completed in the case of a failed request (including false positives or payment provider outage/unavailability).
Fallback routing automatically retries transactions in case of errors such as failures, false positive declines, and system errors. It sends the transaction to a secondary payment service provider if the primary one is unavailable. This ensures that transactions are processed, bottlenecks are reduced and your bottom line is protected.
With false positives, instead of aborting the payment process, fallback rules can be set up to ensure business continuity by using a transaction retry. False positives occur when a user attempts to perform a legitimate transaction that is incorrectly classified as fraudulent.
With the IXOPAY routing engine, users benefit from smooth 3DSv2 implementation and full strong customer authentication support, enabling the uninterrupted processing of payments. IXOPAY’s flexibility and connectivity ensures that the best fees and conversion rates are used. To get the full benefits of payment routing and to provide a seamless user experience, payment data should be stored in IXOPAY’s independent PCI vault. To protect your payment set up and grow your business, get in touch with our sales team for a platform demo today.