How Payment Orchestration Platforms Improve Transaction Success Rates

Almost all commerce is now global and very rapid—including payments—so the ability to process payment transactions successfully is crucial for businesses of all sizes. Global payments remain very complex, with different regulations, requirements, acquirers, gateways, processors, and other providers for every country. Accepting payments at this scale requires integrating with multiple partners and APIs, which requires ongoing maintenance. 

Another challenge businesses face in payment processing is transaction declines. Whether due to technical errors, provider outages, or fraud filtering, declined transactions can have serious consequences. Lost revenue, increased operational costs, higher fees, and frustrated customers are just the beginning. This is especially true for high-risk merchants, who often deal with higher fees and more stringent requirements.

One solution to these challenges is emerging: Payment orchestration shows promise for centralizing payment management and optimizing payment flows, ensuring businesses can simplify operations and improve overall performance. At its core, payment orchestration connects multiple payment gateways and providers through a single API, using intelligent routing to simplify the management of complex payment processes while maximizing efficiency.

Payment orchestration platforms provide access to multiple gateways, implement advanced fraud prevention measures, and ensure more transactions are approved. For businesses, this means higher revenue, fewer costs associated with declined payments, and a smoother, more reliable customer experience. Let’s explore how payment orchestration can transform your payment operations and why it’s critical for improving transaction success rates.

What is Payment Orchestration?

Payment orchestration is an advanced approach to managing and optimizing payment processing by connecting multiple payment providers, gateways, and methods through a centralized platform. Unlike a single payment gateway, which typically offers access to just one provider, payment orchestration embraces the complexity of payment flows while reducing that complexity for merchants. It provides businesses with the tools and flexibility to dynamically route transactions, leverage multiple gateways, and implement advanced strategies to maximize performance.

Payment orchestration is designed to address the challenges of managing multiple payment providers, which is a necessary strategy as ecommerce becomes more global. Businesses operating without payment orchestration cannot intelligently route transactions if they fail. They likely get a report of the failed transactions, but they can do nothing after the fact. 

Intelligent routing works in real time, so the customer doesn't even realize the first attempt did not work. The card is automatically tried again with a new processor, whether the failure was due to processor downtime or a Do Not Honor (DNH) code.

What makes payment orchestration so impactful is how it ties directly to transaction success rates. By using features such as smart routing, which dynamically directs transactions to the most appropriate gateway, businesses can reduce declines caused by network issues or soft declines. Additionally, payment orchestration enables businesses to retry failed transactions automatically or switch to alternative providers in real time, ensuring more payments are approved without manual intervention. These capabilities are vital for businesses looking to increase revenue, improve customer satisfaction, and reduce the costs associated with failed transactions.

What is a Transaction Success Rate?

A Transaction Success Rate (TSR) is a key performance metric used to measure the percentage of payment transactions successfully completed out of the total transactions attempted. It represents how effectively a business's payment processing system is performing and serves as a critical indicator of overall payment health.

To calculate TSR, the formula is straightforward:

TSR (%) = (Number of Successful Transactions ÷ Total Transactions Attempted) × 100

For instance, if a business processes 10,000 payment attempts in a month and 9,500 are successful, the transaction success rate would be:

(9,500 ÷ 10,000) × 100 = 95%
TSR is typically expressed as a percentage and displayed in real-time dashboards or monthly analytics reports provided by payment providers or orchestration platforms. A high TSR indicates that most customers’ payment attempts are going through without issues, while a low TSR suggests friction in the payment flow, leading to potential revenue loss and a negative customer experience.

What is a Good Transaction Success Rate?

Of course, once you have your TSR, the next question is: What is a good transaction success rate?

The answer varies depending on the industry, region, and customer base, but for most businesses, a TSR of 95% or higher is considered good. 

Some industries, like e-commerce or subscription-based services, may aim for even higher success rates due to the direct impact on recurring revenue and customer retention. On the other hand, high-risk businesses, such as those dealing with emerging markets or niche industries, may find it challenging to reach 95% due to increased scrutiny from payment processors or regional regulations.

It’s important to understand that even minor improvements to your TSR can translate into significant revenue gains. For example, if your TSR is currently at 90%, raising it to 95% on a monthly transaction volume of 10,000 payments could mean 500 additional successful payments, representing thousands—or even tens of thousands—of dollars in recovered revenue.

Challenges Around Transaction Success Rates

Achieving a high transaction success rate is not necessarily straightforward. Businesses often face obstacles that can disrupt payment flows and reduce TSR. Below are some of the most common challenges that payment orchestration platforms can help address:

Payment Network Failures

Payment networks are the backbone of global transaction processing, but they are not infallible. Technical outages, server downtime, or connectivity issues with a payment gateway can lead to failed transactions. This is especially problematic during peak sales periods, such as Black Friday or holiday shopping seasons, where even a brief outage can result in significant revenue loss.

Fraud Detection and False Positives

Fraud prevention is critical for any business, but overly aggressive fraud detection systems can flag legitimate transactions as fraudulent. These "false positives" result in declined payments, frustrating legitimate customers and impacting your TSR. This is particularly challenging in industries like ecommerce, where fast-moving transactions can easily trigger fraud detection alarms.

Insufficient Payment Method Options

Consumers today expect a wide variety of payment options—credit cards, debit cards, digital wallets, Buy Now, Pay Later (BNPL) solutions, and more. Businesses that don’t offer their preferred payment methods risk losing customers at the checkout stage. This issue is magnified in global markets where regional preferences, such as Paytm in India or Alipay in China, dominate.

Currency and Regional Payment Restrictions

For businesses operating across borders, currency, and regional payment restrictions can pose significant challenges. Payment gateways and processors may fail to process transactions in certain currencies or block payments originating from specific regions due to regulatory or banking restrictions.

High Card Decline Rates

Credit and debit card declines are one of the most common reasons for failed transactions. These declines can occur for a variety of reasons, including expired cards, insufficient funds, or technical errors. High decline rates not only impact revenue but can also damage customer trust if the payment process is seen as unreliable. Soft declines make up the majority of card declines, where the decline is returned with a code of DNH. These can be for simple reasons like a location filter where a card is declined because the user is on vacation and in an unexpected location.

Key Factors that Affect Transaction Success Rates

Transaction success rates are influenced by a range of factors that can disrupt the payment process and lead to failures. It’s crucial to understand what causes these breakdowns. Below are some of the most common factors that affect transaction success rates.

Network Errors

Network errors occur when there are connectivity issues between the payment gateway, acquirer, or issuing bank. These failures often happen during peak transaction times when payment networks are under heavy loads, or due to system outages. For example, if the payment gateway a business relies on goes offline, all transactions routed through that gateway will fail.

Payment orchestration platforms address this by integrating multiple payment gateways and implementing real-time smart routing. If one gateway experiences network errors, the platform automatically redirects the transaction to an alternative gateway without interrupting the customer’s payment experience. 

Insufficient Funds

One of the most common reasons for card declines is insufficient funds in the customer’s account. While this is outside a merchant’s direct control, repeated declines of this nature can erode customer satisfaction and lower transaction success rates.

With payment orchestration, merchants can implement smart retries, which allow a failed transaction to be attempted again at a later time. This feature increases the likelihood of a successful payment, especially in cases where a customer’s balance changes shortly after the initial attempt. Additionally, payment orchestration platforms can help merchants offer alternative payment methods like Buy Now, Pay Later (BNPL) solutions.

Fraud Detection

Fraud prevention systems are essential for protecting merchants and customers, but they can also inadvertently decline legitimate transactions. Overly sensitive fraud detection measures may flag routine customer behavior as suspicious, leading to unnecessary declines—commonly referred to as “false positives.”

Payment orchestration platforms use advanced fraud detection and prevention tools that reduce false positives. By employing adaptive fraud filters and machine learning, these platforms strike the right balance between protecting against fraud and approving legitimate transactions. 

Technical Issues

Technical issues can arise at any point in the payment process, whether it’s a server failure, system glitch, or miscommunication between payment processors. These technical errors are often unpredictable and can severely impact transaction success rates, especially if there’s no backup system in place.

Payment orchestration platforms offer a redundant infrastructure that minimizes the risk of technical issues disrupting the payment process. By connecting to multiple gateways and acquirers, payment orchestration ensures that even if one system fails, another can seamlessly take over. 

Security Concerns

Strong security measures are essential in payment processing to protect sensitive customer data. However, some security protocols—such as excessive authentication steps—can cause payment friction and lead to abandoned transactions. Additionally, businesses that fail to meet compliance standards may face penalties or restrictions, further complicating transaction success.

Payment orchestration platforms offer built-in security measures such as tokenization and PCI DSS compliance, which protect cardholder data while minimizing friction in the payment process. Tokenization replaces sensitive payment data with secure tokens, reducing the risk of breaches and keeping businesses out of PCI DSS scope. 

Expired Cards

Expired credit or debit cards are another frequent cause of transaction declines. Customers may not realize their card has expired, leading to failed payments, especially in subscription-based services where recurring payments rely on up-to-date card details.

Payment orchestration platforms can address this by offering account updater services, which automatically refresh card details with issuing banks. This ensures that recurring transactions continue without interruptions, keeping both TSR and customer satisfaction high.

How Payment Orchestration Improves Transaction Success Rates

Payment orchestration platforms can help address the many pain points that lead to transaction declines, helping businesses boost their transaction success rates and, ultimately, their revenue. Through a combination of advanced tools and strategies, these platforms enhance the payment process, minimize disruptions, and ensure customers have a seamless experience. Let’s break down the key ways payment orchestration achieves this, with a focus on smart payment routing, intelligent retries, fraud detection, and a multi-PSP strategy.

Smart Payment Routing

One of the most powerful features of payment orchestration platforms is smart payment routing, which uses intelligent logic to dynamically send transactions to the most optimal payment service provider (PSP) or gateway. This is especially crucial for businesses that operate across regions or rely on multiple payment providers.

Smart routing improves transaction success rates by minimizing the risk of payment failures due to network issues, geographic restrictions, or provider-specific outages. For example, if one payment gateway is experiencing downtime or is unable to process a particular card type, the platform can automatically redirect the transaction to another PSP in real time.

Additionally, smart routing allows businesses to route transactions based on specific criteria such as geography, currency, or payment method. For instance, a customer in Europe might have their payment routed to a PSP optimized for the European market, ensuring faster approvals and fewer declines. 

Intelligent Retries

Another feature of payment orchestration is intelligent retries, also known as smart retries or automatic retries. When a transaction fails due to insufficient funds or a temporary network error, intelligent retries automatically attempt the transaction again using optimized timing and logic.

Rather than simply retrying the payment immediately, intelligent retry mechanisms analyze the reason for the failure and adjust the timing or route of the retry attempt. For instance, if a transaction fails because a customer’s card has insufficient funds, the retry system might wait 24 hours before attempting the transaction again, giving the customer time to replenish their account. Alternatively, if the failure was due to a technical issue with the initial PSP, the retry system can send the transaction to an alternative PSP instead. This technique is especially useful when dealing with soft declines and DNH codes and can turn a decline into a success.

Fraud Detection

While fraud prevention is essential for protecting businesses and their customers, poorly configured fraud detection systems can lead to legitimate transactions being flagged as suspicious and declined—a phenomenon known as a "false positive." These unnecessary declines not only hurt your transaction success rates but can also frustrate customers and damage your reputation.

Payment orchestration platforms improve fraud detection by using advanced fraud prevention tools and machine learning algorithms. These tools analyze transaction data in real-time to distinguish between genuine customer behavior and potentially fraudulent activity. This means fewer false positives and more legitimate transactions approved without compromising security.

In addition to reducing false positives, payment orchestration platforms often integrate fraud management across multiple payment gateways. This ensures a consistent fraud prevention strategy, regardless of the PSP used, and provides businesses with a centralized view of fraud metrics. 

Network Tokenization

Network tokenization involves replacing sensitive card details with secure, unique tokens tied to a specific card network. This eliminates failed transactions due to outdated card information, ensuring payments are processed smoothly. Additionally, network tokenization enhances security by reducing the risk of data breaches, fostering trust between merchants and customers, and improving approval rates as issuers view tokenized transactions as more secure. By implementing network tokenization, businesses can significantly reduce declines and create a seamless payment experience.

Card Account Updater

One of the challenges for some transaction successes, particularly for recurring and subscription-based transactions, is keeping card account details up-to-date. Account updater services automatically update saved customer payment information, such as card numbers and expiration dates, when changes occur. By proactively maintaining accurate payment data, account updater services reduce declines due to expired or replaced cards, ensuring payments are processed successfully without customer intervention. 

BIN Lookup

BIN (Bank Identification Number) lookup provides real-time insights into card details such as its country of origin or its currency capabilities. Using BIN lookup enables intelligent routing for payment orchestration, allowing merchants to optimize routing strategies. This ensures transactions are sent to the most appropriate payment processor or gateway, reducing the likelihood of declines caused by mismatched settings or unsupported payment methods. 

Multi-PSP Strategy

A multi-PSP strategy is at the core of what makes payment orchestration platforms so effective in improving transaction success rates. Instead of relying on a single payment service provider, businesses that adopt a multi-PSP strategy gain access to multiple gateways and payment methods, ensuring flexibility and redundancy in their payment processing.

With payment orchestration, businesses can dynamically select the best PSP for each transaction based on factors like region, currency, or payment type. For example, if a business serves customers in both North America and Asia, the platform can route transactions to regionally optimized PSPs, reducing latency and increasing approval rates. Additionally, during gateway outages or periods of high network traffic, the system can seamlessly switch to a backup PSP to ensure uninterrupted payment processing.

Beyond improving transaction success rates, a multi-PSP strategy also helps businesses reduce payment processing costs. To learn more about the benefits of multi-PSP strategies, check out our webinar on payment optimization or this blog on reducing payment processing costs.

Benefits of Improving Transaction Success Rates

Improving transaction success rates is not just about ensuring that more payments go through—it’s a comprehensive strategy that impacts revenue, customer satisfaction, and your competitive position in the market. Let’s explore these benefits in greater detail.

Increased Revenue

Every failed transaction is lost revenue, and for businesses that process large volumes of payments, those losses can quickly add up. By increasing your transaction success rates, you’re directly recovering revenue that would otherwise be lost to declines caused by avoidable factors like network errors or false fraud flags. For subscription-based businesses, this is especially critical, as recurring revenue hinges on the successful processing of regular payments. 

Enhanced Customer Experience

Nothing frustrates a customer more than a failed payment, particularly if the failure is due to an error or unnecessary restriction. Improving your transaction success rates ensures that customers can complete their purchases quickly and seamlessly, without unnecessary interruptions. A smooth payment process enhances the overall customer experience, leaving users with a positive impression of your platform or service.

Reduced Cart Abandonment

Cart abandonment is one of the most significant pain points for ecommerce businesses, and failed payments are a major contributor. A customer who reaches the payment stage of checkout but cannot complete their transaction due to a technical issue or decline is unlikely to try again. By addressing the root causes of failed transactions through solutions like payment orchestration, you can reduce cart abandonment rates and improve conversion rates.

Higher Trust and Loyalty from Customers

Trust is the foundation of any successful business, and a reliable payment process plays a crucial role in building it. Customers who can count on your platform to handle their payments securely and efficiently are more likely to trust your brand and remain loyal over time. In contrast, frequent transaction failures can erode trust and drive customers to competitors. 

Competitive Advantage

In today’s fast-paced digital marketplace, offering a smooth and reliable payment experience can set your business apart from competitors. Customers are quick to abandon platforms with frequent payment issues in favor of those that provide a seamless checkout process. By improving your transaction success rates, you gain a competitive edge over businesses that struggle with high decline rates or unreliable payment systems.

Better Fraud Management

Improving transaction success rates goes hand-in-hand with better fraud management. By reducing false positives and enhancing fraud detection capabilities, you can strike a balance between approving legitimate transactions and protecting your business from actual fraud. This not only boosts your TSR but also ensures that customers feel secure when making payments on your platform. Payment orchestration platforms with advanced fraud prevention tools can help you achieve this balance.

Improved Relationships with Payment Processors

A high transaction success rate signals to payment processors that your business is low-risk and well-managed. This can lead to stronger relationships with processors and acquirers, as well as potential benefits such as lower processing fees or faster access to funds. Conversely, frequent declines or fraud-related issues can strain these relationships, resulting in higher fees or restrictions. By optimizing your payment processes and improving your TSR, you can build trust with your payment partners.

How IXOPAY Can Improve Your Transaction Success Rate

Built with scalability, flexibility, and reliability at its core, IXOPAY is designed to help you overcome the challenges of payment processing and maximize your revenue potential.

IXOPAY’s advanced smart routing capabilities ensure that every transaction is directed to the best payment service provider (PSP) based on real-time conditions, such as network availability, geographic preferences, or payment type. This minimizes failed transactions caused by network errors or mismatches in payment configurations. Additionally, intelligent retries automatically reattempt failed transactions at the right time or with alternative PSPs, significantly boosting approval rates.

Fraud detection is another area where IXOPAY can help. It uses cutting-edge fraud prevention tools and adaptive machine learning algorithms so the platform can balance security and approval rates. 

IXOPAY facilitates a multi-PSP strategy. Through its centralized platform and single API, businesses gain access to multiple payment providers, gateways, and methods, enabling them to tailor the payment process to the unique preferences of their customer base. Whether you operate globally or in a specific region, IXOPAY’s platform helps you to scale while reducing operational complexities.

Ready to transform your payment success rates and unlock new growth opportunities? Request a demo today and discover how IXOPAY’s powerful payment orchestration platform can help your business thrive.