Payment Switch
Payment Switch is a tool that facilitates communication between different payment service providers. Switch typically provides a merchant-driven rules-based authorization and switching solution. It dynamically routes payment transactions between multiple acquirers and Payment Service Providers. It sits at the center of the payment processing and dynamically acquires, routers, switches, authenticates, and authorizes transactions across multiple payment channels. The switch enables an extension of the payment network by adding new payment methods and providers easily, without enormous integration costs.
How it works?
After the payment request is initiated, the payment switch authorizes the merchant and transaction. Based on the status of the transaction (either failure or success), it is further processed. Switch then dynamically routes authorized payment transactions based on the rules. These rules include routing by bin (bank identification number), routing by amount, routing by the time of the day, etc. Based on the bin identification, switch formats and send a message to the provider, and receive a back response from the provider. It again formats the received response and returns back to the caller.