Guides
Payment routing and smart routing: rule types, cascading and metrics that matter
Payment routing is the logic that decides which acquirer, processor or payment method connection handles each transaction. Instead of sending everything to one provider, a merchant with several connections picks the route by cost, approval odds, card type, country, currency or risk. Done well, it can raise approval rates and lower cost per successful payment.
What is payment routing?
Every card payment travels from checkout to an acquirer, then through the card network to the issuer. If you have contracts with more than one acquirer, routing chooses which one gets the transaction. The same idea applies to alternative payment methods offered through different providers. For the roles involved, see payment gateway vs processor and acquirer vs issuer.
What is smart payment routing?
Smart payment routing, also called dynamic or intelligent routing, chooses the route for each transaction from current data rather than a fixed rule set. Typical inputs are recent approval rates per provider, card BIN and issuer country, currency, cost, provider latency and outages, and the payment's risk score. When a provider fails or returns a retryable decline, smart routing can cascade the payment to the next eligible route.
Static routing is easier to audit: a rule such as all Polish cards to provider A always does the same thing. Smart routing adapts faster but needs clean data per route and guardrails, so most teams combine the two: fixed rules for contracts and compliance, dynamic selection within the routes those rules allow.
| Aspect | Static rules | Smart routing |
|---|---|---|
| Decides by | Fixed conditions such as country, currency or card brand | Fixed conditions plus live performance, cost and risk data |
| Reacts to a provider outage | Only after someone changes the rule | Automatically, by moving eligible traffic to healthy routes |
| Retries and cascading | Configured per rule | Decided per decline code within scheme retry limits |
| Needs | A clear rule list | Route-level data, monitoring and limits on automatic changes |
Payment routing rule types
Most setups combine rules. For example, route by issuer country first, then by approval rate within that country.
| Rule type | Routes by | Typical goal |
|---|---|---|
| Cost-based | Fee per method, region, card type | Lower processing cost |
| Approval-based | Historical approval rate per route | More successful payments |
| BIN / country | Issuer country or card brand | Local acquiring, fewer cross-border declines |
| Currency | Transaction currency | Avoid FX conversion |
| Risk-based | Fraud score | Send risky traffic to stricter flows |
| Volume split | Percentage allocation | Meet contract minimums, test routes |
Cascading vs retries
Cascading (or failover) sends a declined transaction to a second route. It is useful for technical errors and some soft declines. It is not a fix for hard declines: a stolen card or closed account stays declined everywhere, and repeated attempts can breach scheme retry rules. The definition is in our payment cascading glossary entry.
- Read the decline code first.
- Never cascade hard declines.
- Keep the customer's authentication result where the rules allow it. Otherwise re-authenticate.
Metrics to watch
Use route-level reporting so you can see the effect of each rule change.
- Approval rate per route, per country and per card type.
- Cost per successful payment (not just headline fee).
- Latency per route.
- Share of transactions cascaded and their recovery rate.
- Chargeback ratio per route.
Routing for local payment methods
Local methods are often available through only some providers. Routing helps here too: offer BLIK or Przelewy24 in Poland, iDEAL in the Netherlands or Bancontact in Belgium through whichever connection supports them, without separate checkout builds. See the payment methods hub.
How to start with payment routing
Start narrow, measure, then widen the rule set.
- Export history Export six to twelve months of transactions with decline codes, BIN, country and fees.
- Find gaps Find where approval or cost differs most between providers.
- Add one rule Start with one simple rule (for example, domestic acquiring by country).
- Measure Measure for a few weeks before adding the next rule.
How OrsunPay helps
OrsunPay is a payment orchestration platform that connects you to licensed PSPs; it does not process or hold funds itself. You connect the providers you already have behind one API, define routing and cascading rules in one place, and monitor approval and decline codes per route. Product details are in smart routing; plans are on the pricing page.
Frequently asked questions
Is smart routing the same as payment cascading?
No. Smart routing picks the best route before the first attempt, using data such as approval rates, cost and provider health. Cascading is what happens after a failed attempt: the payment is retried on another route, which smart routing systems handle only for retryable declines and within scheme limits.
Do I need several acquirers for payment routing?
For card routing, yes, at least two connections. With one acquirer you can still route between payment methods.
Is payment cascading allowed by card schemes?
Card schemes treat each cascade as another authorisation attempt. Retries are typically allowed for technical failures and many soft declines, within each scheme's retry limits. Hard declines must not be retried. Follow your acquirer agreements and the scheme rules that apply to you.
What is the difference between routing and load balancing?
Load balancing splits volume evenly or by percentage. Routing chooses a path per transaction based on rules.
Does routing affect fraud?
It can: risk-based rules send high-risk payments to flows with stronger authentication.