20th March 2020

Dynamic Transaction Routing: Why It Matters

Dynamic Transaction Routing, sometimes referred to as “cascading” or “failover”, is an important feature to consider when searching for the ideal payment gateway. In the short run, it allows merchants to boost their successful transaction ratio and, ultimately, sales. In the long run, they avoid paying for declined transactions.

BigWallet Payments offers Cashier, a one-stop-shop for merchants to manage their payments. Within the Cashier, payments get rerouted to increase the possibility of a transaction being approved even if it had been rejected the first time around.

Understanding Dynamic Transaction Routing

The Dynamic Transaction Routing feature allows us to configure the appropriate distribution of a transaction to the right acquiring partner for our merchant clients. Transactions from a certain region can be directed to specific acquiring partners to provide better approval ratios and increase profit. Transaction volume can also be divided by acquirer in percentages of the merchant’s choosing.

Dynamic Transaction Routing is feature BigWallet Payments provides their merchant clients. Enabled for you by our tech team, it allows transactions declined by one of your acquirers to immediately be rerouted to
your other acquirers. This process is invisible to your shoppers and helps assure higher approval ratios and more volume processed. Routing also protects your business from any payment processing issues caused by a disruption to the acquirer services.

How It Works in Real Life

Let’s break this down by creating a real-life scenario. You have an almost-converted user, who gets to the payment page and is ready to go through the standard procedure: they input their details correctly, to be then redirected to the OTP page, type the code they have received, only to have the transaction declined. This is the worst-case scenario for any merchant.

There may be various reasons for a declined transaction – some acquirers may have an issue processing payments from a certain country, method, or a bank. This is why merchants tend to use multiple PSPs to meet all their customers’ payment needs and avoid the scenario described above.

So, a transaction is declined, and this is exactly when Dynamic Transaction Routing comes into play. When a transaction cannot be processed by a PSP, it is rerouted onto another one, and then the next one.

From a client’s perspective, things look smooth and there is no manual involvement required. All they have to do is when the transaction is declined by a PSP and the page gets reloaded, they just need to input the code once again as the system is already sending a request to another acquirer. For security reasons, the same code cannot be used more than once.

After a Sale

Whenever a transaction finally goes through, the smart routing system remembers which acquirer has processed it, and when the same client comes back next time, they will be automatically redirected where they’re most likely to be processed.

Our system shows that on average, around 5% of transactions go through the Dynamic Transaction Routing. So, if your current payment gateway does not offer this feature, you may be losing up to 5% of your transactions!

If you’re a merchant based in Europe, contact BigWallet Payments to learn how our innovative platform can change the way you manage and process transactions from any corner of the world.