Routine Engine by NORBr - The Challenge of Payment Routing - Power-up your payments with Routing Engine

The challenge of payment routing

19 September 2023 in Blog

by Ludovic Plisson

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In the complex and ever-evolving landscape of online payments, relying on a single payment processor is no longer sufficient. E-merchants strive to improve their authorization rates, reduce costs, and manage risks. To meet these diversified needs, merchants often contract with multiple payment processors, each offering its own advantages in terms of cost, reliability, and geographic coverage.

Contracting is just the first step

Finding and contracting with multiple payment acquirers is only the first step of the challenge. Once these relationships are established, merchants face the complex task of developing payment routing logic. This involves determining which payment should be routed through which processor based on various criteria, such as transaction fees, approval rates, and compliance requirements.

Payment routing: a significant challenge

Traditionally, when e-commerce businesses lacked orchestration solutions, payment routing was handled manually. This involved manually selecting the PSPs to use for routing transactions to specific countries, making it resource-intensive and time-consuming. Payment managers worked closely with development teams to establish custom routing logic. Not only is this method time-consuming and resource-intensive, but it also results in a fragmented experience and provides limited visibility into overall performance.

The importance of effective routing strategy

Routing, more than just payment channeling, is a strategic initiative aimed at maximizing payment authorization while minimizing costs. Recent studies shed light on the stakes of a well-thought-out routing strategy. PYMNTS reports that nearly 20% of card users abandon their card after two transaction rejections within six months​1​. Finance Magnates notes that 62% of customers don’t return to a site after a transaction failure​2​. Lastly, a survey cited by WLPayments indicates that over 30% of cardholders halt their shopping after a payment decline​3​. These failures, impacting customer loyalty and business reputation, underline the necessity for a robust payment routing strategy.

How does the NORBr Routing Engine work?

Step 1: PSP Activation and Universal Tokenization

Right from the start, the NORBr Routing Engine allows you to quickly activate all the Payment Service Processors (PSP) you have contracts with. In just one click, you can integrate and activate these PSPs, laying the groundwork for sophisticated payment orchestration. Next comes our universal tokenization technology. This innovation transforms sensitive payment information into a secure token. Thanks to this token, you can seamlessly navigate between different PSPs without having to store multiple types of sensitive data. You are now ready to manage complex payment routes between different options with startling simplicity.

Step 2: Smart Routing

Once connected, the smart routing engine takes over. Using advanced algorithms, it analyzes various factors like the transaction location, card type used, and transaction size to determine the optimal route. You don’t have to worry about the details: Smart Routing works in the background to guarantee you the best approval rate and the lowest costs.

Step 3: Business routing and customization

If you desire more control, NORBr Routing Engine also offers the ability to set up manual routing rules. With an easy-to-use drag-and-drop interface, you can create customized workflows within minutes, without any coding skills. The system allows deep customization based on a variety of criteria, such as transaction amount, authentication level, authorized currency, IP country, issuer, and customizable lists (Customer ID, ZIP code, Product SKU, email, etc.), Merchant Store ID, Payment Channel, Payment Method, and more.

Step 4: A/B testing

Optimize your routing strategies with the integrated A/B Testing feature. Test different rules and routes to identify configurations that yield the best results. Everything is automated to ensure ongoing optimization without interrupting your business operations.

Step 5: Real-time optimization and no-code

The NORBr Routing Engine adjusts routes in real-time based on performance and analytics data. And the best part? It all happens without any coding, allowing you to iterate quickly and adapt to changing market conditions.

Step 6: Recover AI for intelligent redirection

In the event of a transaction failure, don’t panic. Thanks to our Recover AI technology, the transaction is automatically and intelligently rerouted to another payment processor with a high likelihood of success. This ensures a smooth user experience and increases your approval rates.

Strategic advantages of the Routing Engine

  • Improved performance: Optimize success rates and user experience by smartly directing transactions.
  • Customized control: Personalize your routing rules using a multitude of criteria for total control.
  • Continuous testing and improvement: Use A/B tests for continuous performance optimization of PSPs.
  • Risk and cost reduction: Minimize failures and costs by using fallback scenarios and optimally directing transactions.

Smart routing, simple solutions: solving the challenge of payment routing

In a market as competitive as e-commerce, the details make all the difference. Addressing the challenge of payment routing, NORBr’s Routing Engine tool is an advanced solution for intelligent transaction routing. It offers not only precise and customized control but also an easy-to-use interface, even for users without technical skills. Thanks to this tool, NORBr is revolutionizing the way transactions are managed, offering unprecedented optimization.

The Routing Engine is available on NORBr Stack and NORBr Infra.

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