How we saved INR 2000 crore worth of GMV for our merchants — A sneak peek into Juspay payment router

Digital payments in India have grown multifold in the last decade. This change has been influenced by the launch of new payment methods like UPI, wallets and deeper penetration of cards amongst the population. With this evolution, multiple payment aggregators, acquiring banks have been providing a variety of solutions for some or each of these payment methods.

To fully benefit from such diversity, merchants need a system to benefit from multiple features and be able to improve conversion rates, reduce payments cost and constantly keep updating digital channels with new-age payment methods. As volumes grow, it is advisable to necessarily have a fallback payment gateway as downtimes can have huge impact on GMV/orders.

At Juspay we see businesses move from having one or two payment aggregators to multiple PAs and acquirers to support volumes and multiple payment methods.

Juspay Express Checkout provides a single API interface for all your payment methods with 75+ payment aggregators /payment gateways (PA/PGs). With multiple PA/PGs available to process the payments online, below are key factors to be considered in routing of transactions

  • Cost — There are substantial MDR differences for the same payment methods across different PA/PGs
  • Success Rate — The payment success rate of one payment gateway vary for different payment instruments across PA/PGs
  • System Downtimes — Have a fallback option in case one of the PG is down. Such downtimes are surprisingly quite frequent thus driving the need for dynamic routing capability
  • Load Balancing — Volume commitments, TPS play a role in deciding relevant PA/PG for certain type of transactions or business events like IPL, Big Billion Day Sales etc.
  • Redundancy — Use multiple PA/PGs for the same payment instrument or instrument group. E.g. PG1 as primary for credit cards and PG2 as secondary.
  • Business use cases — Transactions are to be routed to PA/PGs basis factors like Line of business, Offers, Type of transaction (Auth and capture, EMI, Subscription etc.)

Router

With Juspay Payments Router, you can route transactions efficiently to increase payment conversion rate, reduce payment costs and improve availability.

Features of Juspay payments Router:

  1. Have a list of PA/PGs for each payment method with assigned priority to each gateway. If priority1 gateway is down, transactions will automatically move to gateway2
  2. Build priority logics that can distribute volumes based on a commitment to gateways
  3. Build rules to minimise cost
  4. Build rules on payment related elements viz. Payment instrument, Payment Method, Issuing Bank, BIN.
  5. Build rules as per business priorities viz. Order amount, customer segments etc.

Let’s get deeper into how Juspay payments Router works:

Juspay payments router uses multiple AI-ML based algorithms on top of static rules specified by the merchants. This ensures that while taking care of merchant business preferences, there is no impact on conversion rates resulting in huge business savings.

Success rate based routing

AI-ML algorithm constantly monitor and learn high payment failures across payment ecosystem along with merchant-context and make fully automatic routing decisions

  1. Granular: Router takes into account high payment failures of all possible combinations of payment gateways and payment methods
  2. Platform level: Looks at global information on the Juspay platform across merchants
  3. Real-time: Identifies potential downtimes in near real-time, many times within a minute
  4. Accurate: Looks at a series of payment failures consecutively across board yield very high accuracy
  5. Merchant-context: When downtimes are not global and very much specific to the merchant level, Router uses merchant-level patterns and makes routing decisions
  6. Configurable: You configure thresholds of failures at your merchant account level, payment method level, and enable/disable payment methods to be a part of the routing algorithm.Works in conjunction with, health-based routing and static routing rules

Health-based routing

A non-deterministic mathematical algorithm to rank all applicable gateways

  1. This algorithm continuously evaluates payment gateway health and assigns scores using in house proprietary tech.
  2. These scores are then used at the time of transaction to filter out poor performing gateways.

Business rules-based routing

Define your own routing rules based on your business needs.

Merchants can define rules on an exhaustive list of payments parameters e.g Card bin, card brand, issuer, payment method etc. These are generally static rules which are a function of MDR, volume commitments, feature availability.

Priority logic rules can be configured using a simple DSL. We also have a roadmap to further simplify routing configurations using an intuitive UI. A short glimpse below

Dynamic rules as highlighted above work on top of these static rules to ensure that business objectives do not accidentally lead to a poor customer experience.

More detail can be found here: https://developer.juspay.in/docs/dynamic-routing. Please note at least one fallback PG is required for every Payment method combination for dynamic routing to work effectively.

Case studies

Case study 1

A merchant M1 has PG1 and PG2 and splits UPI traffic in 70:30. On March 2, 10.55 pm PG1, started facing a higher number of failures on UPI payment methods, Juspay router immediately moved maximum traffic to PG2. When PG1 became better on UPI payment method again, traffic moved back to PG1 as per the business rules (70:30 traffic split)

Time duration: ~30minutes — 10.55pm to 11:25pm

Transactions routed to PG2: 4714

Transactions went to success on PG2: 3270

GMV saving: ~ Rs. 32 L

Case study 2

For Merchant M1, PG1’s SR went down to 20% from 11:25 to 11: 55. PG1:PG2:PG3 traffic split is in 50:25:25. Juspay payment router detected downtime within a minute and moved traffic to PG2.

If you have more questions, please feel free to reach out to us at biz@juspay.in or visit our website.

Contributors: Malav Shah, Ishan Sharma, Drishya Subramaniam

Full stack payments