Every business that handles payments is on a journey — even if they don’t realize it. In the early stages, many rely on a single payment processor and accept the limitations that come with it. But as businesses grow, expand internationally, and support more payment methods, that setup can become a bottleneck. The landscape of payments has transformed: global scale, newer payment methods (wallets, QR codes, Buy Now Pay Later), regulatory complexity, and higher customer expectations demand more sophisticated infrastructure.
Dynamic transaction routing (DTR) within a single PSP was once cutting-edge. It allowed merchants to route transactions internally among several acquiring relationships to reduce declines and improve success rates. Today, DTR still has value for businesses that do not operate outside of the U.S., for example. But for global businesses it’s often part of a broader architecture — payment orchestration — that offers flexibility, control, and scalability across a portfolio of providers, methods, and markets. Payment orchestration gives merchants a single control center to configure routing rules at the highest level, instead of rules for each processor.
In this article, we’ll explore how DTR and orchestration differ, how they complement one another, and why “orchestration + routing” is the payments architecture that better supports modern growth ambitions. Dynamic Transaction Routing is an incredibly valuable method for improving authorizations and reducing declines. However, it can be used within a bigger payment ecosystem. For merchants on a global trajectory, DTR can be considered a stepping stone on the road to payments maturity.
Payment orchestration aims to enhance the reach, adaptability, and performance of the payments stack. The goal is not to replace DTR, but to see how it fits into a larger, more adaptable payment ecosystem — one that shifts payments from a cost center into a revenue-driving growth engine. In addition, payment orchestration enables you to set your own timeline for growth, expansion, and new capabilities as needed, providing you with unprecedented control over payments.
1. What Is Dynamic Payment Routing via a Single Processor?
Definition
Dynamic transaction routing via a single processor means that your merchant account connects to a single PSP, which itself maintains relationships with multiple acquirers. Inside that PSP’s infrastructure, routing logic determines which acquirer will handle any individual transaction based on performance metrics or rules.
How It Works
The merchant plugs into a single PSP.
That PSP has multiple acquiring partners (e.g., local acquirers, global banks, redundancy providers).
When a transaction is submitted, the PSP uses algorithms or preconfigured rules (for example, issuing bank decline rates, card type, currency, or geography) to route to the optimal acquirer.
If one acquirer fails or declines, the system may fall back to a secondary acquirer inside the same PSP.
Benefits
Simplicity: Only one integration is required at the merchant side, yet multiple acquirers are accessible.
Lower operational overhead: PSP handles the complexity of routing internally.
Built-in optimization and failover: Some level of dynamic routing logic and redundancy is already available.
Scalability within a controlled environment: You expand your network of acquirers without extra merchant-side integrations.
Limitations
Limited to that PSP’s network: You’re constrained to whatever acquirer relationships that PSP holds.
Routing limited to what the PSP allows: You may not be able to customize or override routing logic to suit unique regions or cost objectives.
Restricted fraud tools and APMs: Only the PSP’s integrated fraud providers and alternative payment methods (APMs) are available.
Less merchant control: The merchant may not have full visibility into or control over how routing decisions are made.
Cost incentives misaligned: The PSP may not be incentivized to route to the lowest‑cost acquirer because its own margins depend on its network.
Even when sophisticated, DTR via a single PSP is constrained by the boundaries of that PSP's ecosystem.
2. What Is Payment Orchestration?
Definition
Payment orchestration is a higher-level architecture that allows merchants to connect with and manage multiple PSPs, gateways, acquirers, and APMs through a single orchestration layer. It sits above the PSP layer and provides centralized control over routing, integrations, compliance, reconciliation, and analytics.
How It Works
The merchant integrates once with the orchestration platform.
That platform supports many PSP, acquirer, and payment method connections.
The merchant defines routing logic using rules (cost, region, success rates, fraud performance), which can override or augment PSP-level routing.
The orchestration platform handles connections, fallbacks, settlement routing, and reporting across all connected providers.
You can think of orchestration as layering on top of dynamic routing frameworks — so DTR becomes one of the tools in your orchestration toolbox.
Benefits
Flexibility & control: Define your own routing strategies rather than relying solely on a single PSP’s logic.
Optimization across dimensions: You can optimize for authorization rate, cost, geographies, or risk simultaneously.
Faster onboarding: Adding new PSPs, acquirers, or regional providers becomes significantly easier because you only need to integrate with the orchestration layer.
Consolidated reconciliation & settlement: Payments from multiple sources are unified into standardized formats, making accounting easier.
Connectivity: Add hundreds of local methods and global PSPs without rewriting your merchant logic.
Scalability: As your business grows, orchestration scales with you, requiring minimal incremental integration effort.
Limitations and Caveats
Integration footprint: The usefulness of any payment orchestration solution depends on how many provider integrations the platform maintains (the “connectivity” or “adapter” model). At IXOPAY, for instance, we support broad connectivity and over 200 pre-built adapters into PSPs and acquirers.
Dependency on the orchestrator: Your merchant logic is dependent on the orchestrator’s performance, reliability, and availability.
Incremental cost: Using an orchestration platform adds another layer of cost, not just from licensing, but from extra API calls, data normalization, and routing logic. However, the ROI of payment orchestration usually far outweighs the costs.
In short, orchestration is a force multiplier, a way to scale, evolve, and control your payments stack more intelligently than by managing individual PSPs alone.
3. Key Differences at a Glance
Feature |
Dynamic Routing (Single PSP) |
Payment Orchestration |
|---|---|---|
Integration |
Single PSP with multiple acquirers |
One orchestrator supporting many PSPs, acquirers, APMs |
Routing Control |
PSP-defined, limited merchant override |
Merchant or shared routing logic with full configurability |
Flexibility |
Moderate |
High |
Acquirer Options |
Limited to PSP's partner network |
Access to multiple PSP acquirer networks |
Optimization Logic |
Defined by PSP |
Fully customizable by merchant |
Use Case |
Payments as cost center |
Payments as strategic growth lever |
Dynamic routing keeps payments manageable within a single-PSP ecosystem. Orchestration expands that capability, letting merchants treat payments as a strategic asset instead of merely a cost.
4. Why Are Merchants Choosing Payment Orchestration?
The shift toward payment orchestration is driven largely by the dynamics of global commerce and the demands of scaling merchants. Key drivers include:
Global expansion: Merchants entering new countries demand access to local PSPs and payment methods, and orchestration enables that without re-architecting the stack.
Payment performance: With orchestration, merchants can dynamically route to the provider most likely to succeed in each region, minimizing declines.
Cost efficiency: Orchestration enables cost-aware routing—sending transactions to lower-cost providers when possible.
Operational simplicity: Finance, compliance, and engineering teams prefer a unified system rather than juggling dozens of PSPs independently.
Embedded finance & SaaS platforms: As embedded payments become integral to software platforms, orchestration allows integrated payments to scale with minimal friction. Platforms can offer routing and selection logic as part of their product offering.
Future-proofing: With changing regulations and payment innovation (e.g. new APMs or fraud tools), orchestration provides adaptability rather than rigid, brittle integrations.
Dynamic transaction routing is a powerful tool, especially within the context of a single PSP. It helps optimize routing among that provider’s acquiring network and reduce declines. But as businesses scale, globalize, and need to support broader payment ecosystems, orchestration becomes the essential next step.
Payment orchestration builds on the benefits of routing — but adds control, flexibility, scalability, and insight. It turns your payments stack into a growth engine instead of a backend burden.
If your payment architecture is still siloed among PSPs, the time has come to evaluate how orchestration can unify, optimize, and future-proof your stack. Shift your payments strategy from cost center to strategic advantage.
Next steps: Audit your current payment setup, identify bottlenecks, and explore orchestration platforms capable of connecting the providers you need. Contact IXOPAY for a custom review of your payment setup. The future of payments is modular, flexible, and intelligent.