Payments 101: What is intelligent routing in payments?
As an ecommerce merchant, you are always looking at ways to optimise your online experience. Whether you are looking to improve commercial leverage with suppliers, mitigate failed payments and cart abandonment or access a wider variety of payment providers and alternative payment methods, you need to adapt and evolve for your growing, global customer base.
Payment routing is one of the crucial steps in payment processing and provides you with the opportunity to optimise and maximise your payments workflow.
Traditionally, payments routing has been fairly static or non-adaptive, where network administrators or your payment service providers define a route for your consumer traffic based on a couple of set rules. Static payment routing utilises a predetermined set of rules, following a linear process through to one payment service provider and acquirer, through to transaction settlement and completion. The challenge with static payment routing, is that it prevents a transaction processing if the predefined route is not available or fails, and it also does not enable you to utilise market insight and rich data reporting, to optimise your payment workflows for best commercial leverage too, be that for geographical flexibility or for load balancing and volume.
In a competitive and complex ecommerce landscape, it is crucial that you look at all avenues to optimise transaction costs, increase acceptance rates, improve payments resilience and manage payment load balancing. This can all be achieved through more comprehensive intelligent, dynamic routing.
What is intelligent or dynamic routing?
Known by a number of names across the industry, including dynamic and smart routing, intelligent routing provides greater flexibility in your payment workflow, by automatically directing transactions to the best performing and most cost-effective route at the time of the transaction. This enables you to minimise failed payments, through greater tech-stack resilience, whilst also enabling you to build in key components into the routing experience, such as location, currency, pass rates, payment type and more.
Every transaction is unique and as a leading merchant, your payment workflow needs the flexibility and agility to adapt in real-time.
Exploring the benefits in more detail, intelligent routing enables you to:
- Build greater resilience in your payment workflow, mitigating failed payments. With a multi acquirer strategy in place, intelligent routing provides you with technical failover capabilities, so should there be an outage or a problem with one provider, the next available provider will be tried against the transaction to ensure the highest possible chance of transaction acceptance. This not only saves potentially lost revenue, but provides your customer with the best possible customer experience, with the routing happening in a matter of seconds behind the scenes.
- Increase commercial leverage across your payment supplier base, with the ability to devise a multi acquirer strategy. Having greater choice provides you with greater opportunity to negotiate and leverage rates. Through intelligent routing, you can route by a percentage of volume or basket value for best commercial benefits from your range of suppliers.
- Develop an international strategy, utilising local payment methods and acquirers which are aligned to your operating markets, improving the speed, efficiency and pass rates of transactions. When expanding internationally, it is critical you provide a localised experience for your customers, but the same goes for optimising your payments. With greater access to the payments ecosystem through intelligent routing, you can connect to local acquirers providing better rates, but also a higher chance of acceptance. You can also offer local payment methods to suit your growing, global audience, wherever your ecommerce experience lands.
- Build audience understanding and train the routing engine to intelligently adapt and evolve based on your needs. Intelligent routing engines utilise machine learning algorithms and a wide variety of data sources to maximise efficiency and optimise your payment workflow for the best possible outcome. The more you utilise these in your ecommerce operations, the more efficient and accurate your workflows will become, adapting to needs of the customer and your organisation.
How can BR-DGE's intelligent routing tool help optimise your operations?
Intelligent routing is a core capability of payment orchestration, enabling you to access the entire payments ecosystem and maximise technology to orchestrate the best payment workflow at the time of transaction.
With BR-DGE's payment orchestration platform, you can dynamically route the payment journey based on card details e.g. BIN / IIN, currency, time of day, transaction value and more. This not only reduces transaction costs and improves the customer experience but ensures greater authorisation rates and improves resilience of your payment workflow against technology outages, all through one single API.
At BR-DGE we empower merchants to take control of their end-to-end payment journey, and with intelligent routing via payment orchestration, you can also capitalise on broader understanding of your payment performance, utilising a data and analytics suite. Combined you have a powerful engine, optimising data and insight to drive tailored decisions for each and every transaction performance.
To find out more about intelligent routing and how BR-DGE could support you in optimising your payments workflow, get in touch with the team.