Static & dynamic payment routing compared: advantages and disadvantages

13th May 2020 | Blogs



Routing is one of the crucial elements of payment processing. Your conversion and approval rates are directly dependent on how you route your transactions. If you work with a single payment service provider, there’s not much you can do – every glitch or downtime of your provider will result in your losses. That’s why it’s reasonable to work with multiple providers, and this is where you need to route your payments in the wiser way possible.

In this article, cuts a long story short and offers you a straightforward guide to static and dynamic payment routing.

How does static routing work?

Think of yourself as a logistics operator. Your freight is your transactions. If you pick a map and draw a route for your cargo to be delivered, and follow it strictly no matter what, that will be static routing. A tree topples onto your road, and you can’t make the delivery anymore.

Static payment routing implies sending transactions to payment providers through manually configured routes. These routes are fixed and unresponsive to any occurrences. If your pre-defined route becomes unavailable, you can’t process transactions, and therefore lose sales.

How does dynamic routing work?

Let’s get back to our logistics fantasy. Imagine you now have an advanced GPS navigation system, which picks the optimal route to deliver your freight considering traffic, weather, and road conditions. Once a system detects there’s a car accident on your way, it will choose an alternative route to complete freight delivery.

This is how dynamic routing works. It allows adapting to changes and selecting the most efficient way to ensure the successful completion of each transaction.

Setting up various dynamic routing rules paves the way for continuity of your operations, leading to an increase in approval ratios. For instance, our smart routing engine can select the best route based on multiple parameters, such as card issuer/type/brand, country, currency, amount, date & time, etc.

What is the difference between static and dynamic routing?

The table below summarises the main characteristics of both static and dynamic payment routing and gives you a clear vision of how they differ.

Static Routing Dynamic routing
Routing rules are strict and fixed Various rules cascade in real time
The provider is pre-defined Transactions go to the best available provider
Totally dependable on provider’s stability Eliminates the effect of provider’s downtimes on your business
Acceptable for small businesses A must for medium and large businesses

Static routing is often considered as an outdated option, unsuitable for modern realities. Nevertheless, it may be helpful for cases when you need to establish strict rules and use only selected merchant account to process particular transactions. That’s why static routing is also called rule-based. Still, this option is hardly scalable, as with the growth of your business, the complexity of rules will also increase. Moreover, you’ll have to maintain and update them manually.

With dynamic routing, every transaction is automatically routed to the provider offering the highest probability for success. Alongside with Smart Processing tools like cascading and failover management, dynamic routing helps to eliminate the effect of any issues on providers’ side on your business. Your customers enjoy the seamless and frictionless experience, while your business benefits from operational continuity and increased conversion.

load more