Gateway routing
DEFINITION
Gateway routing is the practice of directing each payment to one of several connected payment gateways based on transaction attributes or rules.
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Gateway routing is the practice of directing each payment to one of several enabled payment gateways based on transaction attributes or rules, rather than sending every transaction through a single gateway. A business connects more than one gateway and decides, per transaction, which one should handle it.
The goal is to send each payment through the path most likely to succeed. Rules can route by card brand, currency, region, transaction type, or the health of a given gateway at that moment. When a business processes across several markets or wants a backup path if one gateway has trouble, routing gives it control over where payments go. A subscription platform such as Recurly can connect multiple gateways and apply routing rules so charges and rebills follow the path a business defines.
Why gateway routing matters for subscription businesses
Recurring revenue depends on payments clearing month after month, so where a payment is sent affects how much revenue a business keeps. Routing to a gateway that performs well for a given card brand or region can lift approval rates, and routing away from a gateway that is degraded or down protects billing runs from a single point of failure. Cost is the other lever, since processing fees and cross-border charges vary by gateway and by how a transaction is routed.
Routing also supports growth into new markets. A business expanding into a new region can add a local gateway and route that region's payments to it, which can improve acceptance and reduce cross-border costs.
How gateway routing works
The business connects two or more gateways to its billing platform.
It defines routing rules based on attributes such as card brand, currency, region, or transaction type.
When a payment is created, the platform evaluates the rules and selects a gateway using custom gateway codes.
The transaction is sent to the chosen gateway for authorization.
If a gateway is unavailable or returns certain failures, the platform can route the payment to a different gateway.
Results feed back so the business can review approval rates and costs by gateway and refine the rules.
How to use gateway routing
Map which gateways perform best for each card brand, currency, and region you serve.
Create a set of routing rules that send each payment to its strongest path.
When processing transactions, use rules to select the appropriate gateway.
Keep a backup gateway configured so a failure on one path does not stop billing.
Review approval rates and processing costs by gateway on a regular basis, and adjust rules as performance changes.
Test rule changes on a subset of traffic before applying them broadly.
Benefits and examples
Higher approval rates: payments follow the path most likely to be accepted.
Resilience: a backup gateway keeps in-session payments running if one gateway degrades.
Lower processing cost: routing can favor cheaper paths for a given transaction type.
Market fit: local gateways can improve acceptance and lower cross-border costs in new regions.
For example, a subscription business operates in North America and Europe. It routes European card payments to a gateway with strong local acceptance in that region and North American payments to a different gateway. When the European gateway reports elevated errors during a billing run, the platform routes those payments to a backup gateway so signups still process, and the team reviews approval rates by gateway afterward to decide whether to keep the change.
Frequently asked questions
What is gateway routing? It is the practice of directing each payment to one of several connected gateways based on rules, instead of sending every transaction through a single gateway.
Why would a business use more than one gateway? To improve approval rates for specific card brands or regions, to lower processing costs, and to keep a backup path so billing continues if one gateway has problems.
Does gateway routing happen automatically? It depends on the setup. Some routing follows fixed rules the business defines, and some platforms can also react to gateway performance in real time.
Can routing help with international payments? Yes. Sending a region's payments to a local gateway can improve acceptance and reduce cross-border costs.
