What are the benefits of smart routing?

If you're managing payments across multiple processors, you already know how quickly a single point of failure can erode revenue. 

Smart routing fixes that.

It lets you configure rules to dynamically route payments across different payment service providers (PSPs), increasing the chances of authorization and reducing failed transactions.

In this article, we'll explore how smart routing works and the key advantages it offers for merchants looking to optimize their payments stack.

Looking to set up smart routing right away? Contact one of our experts to learn more about how Primer can help.

What is smart routing and how does it work?

A rich set of data is generated every time a customer initiates a payment. This includes the card type used, issuing country, transaction amount, currency, device used, and more.

Smart routing puts that data to work. Based on the rules you define, it uses the data to decide which PSP to route each payment to.

For instance, you might route certain card types to a preferred processor, steer high-value payments to a PSP with stronger fraud tools, or split traffic by region to boost local approval rates.

Example: Smart routing in action

Let's say you use two payment processors:

• A global processor with wide coverage and strong fraud protection
• A local processor in Greece with lower fees and better success rates for Greek-issued cards

You can set up three routing rules to get the most from both:

Rule 1: Lower costs

If the card is issued in Greece, route to the local processor. It's cheaper and approves more local transactions.

Rule 2: Manage risk

If the transaction exceeds €2,000, route to the global processor regardless of card origin as it offers stronger fraud protection.

Rule 3: Ensure uptime

If the local processor goes down, automatically reroute to the global processor. 

By layering rules like this, you can reduce costs, improve approval rates, and handle risk more effectively

‍With Primer Workflows, you can set up this payment routing with no code required. Keep reading to learn more, or book a call to find out how we can help 

The case for A/B testing your routing logic and how smart routing can help

Routing decisions based on assumptions will cost you. A/B testing replaces guesswork with data, and smart routing makes it easy to run experiments continuously.

Here's a practical example.You want to know which of your two processors performs better for Greek-issued cards. You use smart routing to split that traffic evenly: half to a local processor, half to a global one. After a few weeks, the data tells a clear story.

The metrics worth tracking:

• Authorization rates: Which processor approves more legitimate payments?
• Fraud rates: Which processor more accurately identifies risky transactions without causing false declines?

A/B testing makes it easier to weigh trade-offs. If a processor is better at blocking fraud but approves fewer legitimate payments, you can decide whether that outcome aligns with your risk appetite.

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IMAGE REQUEST: IT WOULD BE GREAT TO INCLUDE SOMETHING THAT VIZUALIZES THIS USE CASE

That feedback loop is what makes A/B testing valuable. It doesn't just answer a one-time question; it becomes the mechanism through which you keep refining your payment logic as your business, markets, and processor relationships evolve.

Whatever the goal, A/B testing provides a reliable feedback loop that helps you continuously refine your strategy and adapt to changes over time.

Read more about the importance of A/B testing: The art and science of A/B testing in payments

5 benefits of smart routing payments

Smart routing isn't just about sending a payment from A to B. It's about giving every transaction the best possible chance of success while balancing performance, cost, and risk.

Here are five key benefits of using smart routing:

1. Increase payment authorization rates

Send each transaction to the processor most likely to approve it. Combine that with fallback logic to retry soft declines automatically, and you recover revenue that would otherwise be lost.

2. Deliver cost efficiency

Each failed payment costs more than lost revenue. Smart routing can reduce fees and improve margins over time by minimizing declines and routing transactions through your most cost-effective processors.

3. Accelerate transaction times

Some processors are faster than others. Smart routing reduces latency by selecting the quickest available route, particularly valuable in high-intent verticals like retail and travel, where checkout speed directly affects conversion.

4. Improve risk management

Between 2023 and 2028, global merchants are projected to lose over $362 billion to payment fraud. Smart routing lets you direct high-risk or high-value transactions to processors with stronger fraud detection, without disrupting the experience for legitimate customers.

5. Enhance the customer experience

Slow checkouts and failed payments drive customers away. Smart routing helps make transactions faster, smoother, and more reliable, leading to happier customers and fewer abandoned carts.

Read more: Understanding cart abandonment rates: Industry benchmarks and best practices

Cascading payments (Fallbacks) and their importance in smart routing

If you only set up one smart routing flow, make it cascading payments.

Cascading payments—or Fallbacks, as they're called at Primer—give you a safety net. When a transaction is soft-declined by one processor, it's automatically retried through another, with no extra steps for the customer and no visible friction.

The concept is simple. Building it yourself isn't. Cascading logic requires integrating with multiple PSPs, maintaining those connections, and writing logic to interpret and respond to the hundreds of different decline codes each processor returns.

That’s where a unified payments infrastructure like Primer makes all the difference. Primer's Fallbacks feature handles all of that out of the box, including normalizing decline codes across processors using the Unified Mapping Standard, so you don't need to build custom logic for each integration.

In just six months, Web3 infrastructure provider Banxa, recovered $7,000,000 worth of revenue using Primer Fallbacks. 

Read more: How to recover lost revenue with cascading payments

The smarter way to set up smart routing: Primer 

Until recently, merchants had two options for smart routing: build it themselves or rely on a single payment gateway. Neither scales well.

Building in-house gets expensive and complex fast. Most merchants who go down that path end up with a rigid, hard-to-maintain system. We regularly hear from merchants who added just one or two processors before realizing the DIY approach isn't sustainable.

Single-gateway solutions are easier to set up but come with significant trade-offs. You can't route across multiple providers, fully control your costs, or support every payment method you need. These platforms often bundle services you don't use, and still require you to plug in additional tools to fill the gaps.

Gabriel Le Roux, Primer's Co-Founder and CEO, got tired of watching merchants navigate this impossible choice.That’s the reason Primer exists. 

Primer gives merchants a faster, more flexible way to implement smart routing. With Primer you can connect all your payment services through a single API, then control them through a drag-and-drop interface. There’s minimal code, minimal heavy lifting—just results.

But routing is just one part of what Primer does. As a unified payments infrastructure, Primer gives you the tools to optimize every stage of your commerce flows.

Learn more about Primer’s Unified Payment Infrastructure.

How to get started with smart routing using Primer 

Primer makes it easy to set up and test smart routing. 

With our no-code Workflows, you can try different strategies, and in Observability, our analytics tool, you can track performance in real time, so you always know what’s working across your payment stack.

You don't have to start with a complex setup. Simple, high-impact flows can go a long way,  and Primer is designed so you can go live quickly and build from there.

Here’s what you can set up on Day 1:

1. Connect your PSPs: Primer supports a wide range of global and local processors. Once you've signed contracts with each provider, activating them in the Primer Dashboard takes minutes with no engineering work required.

2. Enable Fallbacks: With more than one PSP connected, switch on Fallbacks to automatically retry failed payments through a secondary processor. Select your fallback processor in the Workflows condition block and Primer handles the rest.

3. Go live and monitor: Observability gives you real-time visibility into payment performance across your entire stack, so you always know what's working.

Once you’ve set up the basics, you can experiment with more advanced payment routing strategies. Here are a few ideas to help you reduce costs, boost success rates, and stay in control:

• Route transactions to the most cost-effective or reliable processor based on region, card type, BIN range, issuing bank, or any other transaction data point
• Maintain minimum traffic thresholds across processors to stay above contractual volume commitments
• Customize routing logic by payment method
• Automate load balancing across processors to handle peak traffic or reroute automatically during processor outages
• Build an optimal 3D Secure (3DS) strategy across all processors by using Primer's processor-agnostic 3DS solution
• A/B test payment flows without writing code, so you can keep optimizing as your data accumulates
• Trigger automated actions via direct integrations or API calls, for example, alerting your team in Slack when an issue occurs, or sending a customer a verification email when they use a new payment method for the first time

A smarter way to route payments with Primer

Primer puts the power into payment teams' hands, for example, alerting your team in Slack when an issue occurs, or sending a customer a verification email when they use a new payment method for the first time.

Primer puts the power into payment teams' hands, enabling you to set up smart routing and A/B test without any engineering resources. 

Contact one of our experts to learn more about how Primer’s flexible infrastructure can help you route smarter, better, and faster.

Frequently Asked Questions (FAQ)

What is smart routing in payments?

Smart routing is a payment optimization strategy that dynamically directs transactions to the most appropriate payment service provider (PSP) based on factors such as card type, issuing country, transaction value, or processor performance. By routing each payment through the processor most likely to approve it, merchants can increase authorization rates and reduce failed transactions.

How does smart routing improve payment success rates?

Different processors perform better in different scenarios depending on factors like issuer relationships, regional coverage, and fraud rules. Smart routing uses transaction data and predefined rules to send payments to the processor with the highest likelihood of approval. When combined with fallback logic that retries soft declines with another provider, it can recover revenue that would otherwise be lost.

What is the difference between smart routing and payment orchestration?

Smart routing is a feature that determines how individual transactions are routed between payment providers. Payment orchestration is the broader infrastructure that connects multiple PSPs, payment methods, fraud tools, and services through a single integration. Within an orchestration platform, smart routing is one of the key tools used to optimize payment performance.

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