Technical
Smart Routing
Definition
Smart Routing dynamically routing transactions to different processors based on rules to optimize approval rates, costs, or both. Routing criteria include card geography, card type, transaction amount, processor performance, and cost. Requires multi-acquirer setup or orchestration platform. Can improve approval rates by 2-5% and reduce costs through optimal processor selection.
Related Terms
Payment Orchestrator
A platform that sits between merchants and multiple PSPs/acquirers, providing intelligent routing, unified integration, and centralized management. Orchestrators enable routing by geography, card type, or performance; automatic failover; and token portability between processors. Examples include Spreedly, Primer, and Gr4vy. Makes sense for merchants using multiple processors at scale.
Approval Rate
The percentage of authorization requests that are approved. Key metric for payment optimization. Varies by merchant, geography, and card mix - 85%+ is good for low-risk; 75%+ for high-risk. Factors affecting approval: card quality, fraud rules, 3DS implementation, data quality, and issuer relationships. Improving approval rates directly increases revenue.
Need help navigating payment terminology?
We speak fluent payments. Let us translate for your business.
Talk to Us