Payment Orchestration Engine Architecture Guide

A Payment Orchestration Engine (POE) architecture is a centralized and intelligent platform that serves as an intermediary layer between merchant applications and multiple payment service providers (PSPs), gateways, and acquirers. Its primary role is to simplify and optimize payment processing by managing all integrations through a single point of connection.

The architecture uses rules-based logic and dynamic routing to direct transactions to the most suitable provider based on factors such as cost, performance, and geography. This ensures higher authorization success rates, reduced transaction costs, and enhanced system resilience. Beyond routing, the POE also handles exception management, centralized reporting, and analytics, giving merchants a unified view of their payment ecosystem.

Additionally, advanced security measures like tokenization, encryption, and fraud prevention are integrated to protect sensitive payment data. By consolidating multiple payment integrations into one orchestrated framework, merchants can streamline operations, improve scalability, and maintain flexibility in adopting new payment methods or providers without heavy technical overhead.

What is a Payment Orchestration Engine?

A Payment Orchestration Engine (POE) is an advanced software layer that centralizes, automates, and optimizes the entire payment processing lifecycle across multiple payment service providers (PSPs), gateways, and acquirers. Acting as a unified control center, it eliminates the complexity of maintaining individual integrations with each provider by offering a single connection point for all payment operations. Think of it as the “operating system” for payments—a layer that abstracts away technical, operational, and compliance challenges while intelligently managing payment flows behind the scenes.

Payment Orchestration Engine Core Purpose

The POE solves the fragmentation and inefficiency of the modern payment ecosystem by dynamically routing, monitoring, and securing transactions in real time. Through rules-based logic and data-driven decision-making, it selects the best provider for each transaction based on factors such as cost, success rate, geography, and payment method. This intelligent routing boosts authorization rates, lowers transaction fees, and ensures continuity even during provider outages.

Key Problems Solved:

1. Complexity of Multi-Provider Management Without orchestration, merchants must build and maintain separate integrations for each PSP, acquirer, or fraud tool—creating a complex, high-maintenance payment infrastructure. The POE unifies these connections through a single API, reducing technical debt and simplifying ongoing management.

2. Integration Burden on Engineering Teams By centralizing integrations, the POE drastically reduces engineering workload, freeing developers from maintaining multiple, inconsistent APIs and allowing them to focus on innovation rather than maintenance.

3. High Transaction Costs and Low Approval Rates The engine automatically routes payments to the most cost-effective and reliable providers based on transaction characteristics (region, card type, amount, etc.). When a transaction fails or is declined, the system uses automatic failover and retry mechanisms, rerouting it to an alternate provider to recover potential revenue and reduce false declines.

4. Dependence on a Single Provider A POE enables merchants to add, remove, or switch payment gateways effortlessly, reducing dependency on any one provider and mitigating risks caused by downtime, regional restrictions, or policy changes.

5. Fragmented Data and Reconciliation Challenges The orchestration layer consolidates all transaction data, fees, chargebacks, and refunds into a unified reporting dashboard, simplifying reconciliation, analytics, and financial oversight.

6. Security and Compliance Management Instead of handling multiple compliance frameworks across providers, the POE centralizes tokenization, PCI compliance, fraud detection, and data encryption—ensuring consistent protection and simplified regulatory adherence.

7. Inefficient Manual Processes and Revenue Loss Through automation, the POE eliminates manual routing and error handling, accelerates transaction processing, and applies smart retry logic to reduce involuntary churn in subscription or recurring payment models.

8. Barriers to Global Expansion By offering access to both global and local payment methods through a single integration, a POE allows merchants to scale internationally with ease while adapting to local regulations and consumer preferences.

Key Components of Payment Orchestration Architecture

A well-designed payment orchestration engine consists of several interconnected layers, each responsible for specific functions. Let's break down the architecture from the outside in:

1. Core Architectural Components

Payment Gateways

Software modules that securely transmit customer payment information to payment processors and return transaction status feedback.

Payment Processors

Financial institutions that handle the authorization and settlement of payment transactions.

Acquirers

Banks or financial institutions that are members of payment card associations such as Visa or Mastercard, managing merchant accounts and settlements.

Centralized Orchestration Platform

The central hub connecting all components. It manages routing, transaction logic, fraud detection, and reporting through a unified interface.

2. Client-Facing Interface / API Layer

The outermost layer exposes a clean, RESTful (or GraphQL) API to merchant web and mobile applications. It standardizes all interactions with payment service providers, allowing developers to integrate once without worrying about which PSP processes the transaction.

Key Functions:

• Initiate payments (checkout, one-click payments)

• Query transaction status (success, pending, failed)

• Issue refunds and voids

• Manage customer payment methods (add, delete, set default)

• Subscribe to webhooks for real-time payment notifications

Key Principle: The API is payment-provider-agnostic, providing a consistent interface regardless of the underlying payment gateway.

Example API Endpoints:

POST /v1/payments/charge

GET /v1/payments/{transaction_id}/status

POST /v1/payments/{transaction_id}/refund

POST /v1/customers/{customer_id}/payment-methods

2. API Gateway Layer

The API Gateway acts as the secure entry point for all requests, handling:

Authentication & Authorization: Validates JWT tokens, API keys, or OAuth credentials to ensure only authorized clients can initiate payments.

Request Validation: Checks that incoming requests contain all required fields (amount, currency, payment method) and conform to expected formats.

Rate Limiting: Prevents abuse by limiting requests per customer or merchant (e.g., 100 requests/minute).

Idempotency: Ensures duplicate requests (caused by network retries) don't result in duplicate charges. Uses idempotency keys to deduplicate requests.

TLS/SSL Termination: Handles HTTPS encryption at the edge, ensuring all data in transit is secure.

Example Implementation (Elixir/Phoenix):

3. Orchestration Core Module

This is the brain of the system. The core module receives validated payment requests and applies complex business logic to determine how each transaction should be processed.

Responsibilities:

Routing Logic: Decides which PSP should process the transaction based on:

• Transaction currency and amount

• Customer location (geographic routing)

• Payment method type (card, wallet, bank transfer)

• PSP pricing and success rates

• Current PSP health status (circuit breaker pattern)

Fallback & Cascading: If the primary PSP declines or fails, automatically retries with secondary and tertiary providers.

Data Aggregation: Collects transaction outcomes from all PSPs and writes them to the central database.

Reporting & Analytics: Generates real-time dashboards showing acceptance rates, costs, and performance by PSP.

Example Routing Decision Tree:

Implementation Pattern (Elixir):

4. Smart Routing Engine

The routing engine can be rule-based, algorithm-based, or ML-powered (or a hybrid). It continuously evaluates which PSP to use for each transaction.

Rule-Based Routing:

• Hardcoded rules defined by the merchant (e.g., "use Stripe for US customers")

• Easy to understand and debug

• Limited flexibility and optimization potential

Algorithm-Based Routing:

• Dynamic evaluation of PSP performance metrics (success rate, latency, cost)

• Automatically selects the best PSP based on real-time data

• Can be further optimized with machine learning

ML-Based Routing (Advanced):

• Trains models on historical transaction data to predict success likelihood

• Learns patterns like "transactions from France at 2 PM on Visa cards have 95% success rate with Adyen"

• Continuously improves over time

Example: Cost-Optimized Routing Algorithm

5. Extension Modules (PSP Connectors)

Each payment service provider integration is encapsulated in its own module. This modular design allows:

• Independent deployment: Update Stripe integration without touching Adyen code

• Isolated testing: Test each PSP connector separately

• Simplified maintenance: Each module has its own configuration and error handling

PSP Connector Structure:

Key PSP Connector Features:

• Request Transformation: Converts orchestrator's standard format to PSP-specific format

• Response Normalization: Converts PSP-specific responses back to orchestrator's standard format

• Error Mapping: Translates PSP error codes to orchestrator error codes

• Retry Logic: Handles temporary failures (network timeouts, rate limits)

• Circuit Breaker: Stops sending requests to failing PSPs temporarily

6. Central General Database

The database is the single source of truth for all payment data. It stores:

Transaction Records:

• Transaction ID (orchestrator-generated UUID)

• PSP used and PSP transaction ID

• Amount, currency, payment method

• Status (pending, success, failed, refunded)

• Timestamps (created, updated, completed)

• Customer and merchant IDs

Customer Data:

• Customer profiles

• Stored payment methods (tokenized)

• Payment preferences

Merchant Configuration:

• PSP credentials and settings

• Routing rules and preferences

• Fee structures

Analytics & Reporting Data:

• Success rates by PSP, currency, region

• Average transaction amounts

• Decline reasons and error codes

Example Schema (PostgreSQL):

7. Event and Messaging Layer

Modern payment orchestration engines use event-driven architecture to ensure reliability and enable asynchronous processing.

Key Patterns:

Outbox Pattern: Ensures database writes and event publishing happen atomically

1. Transaction is saved to database

2. Event is written to outbox table in same transaction

3. Background worker reads outbox and publishes to Kafka

4. Marks event as published in outbox

Event Streaming (Kafka):

• payment.initiated – Payment request received

• payment.routed – PSP selected and request sent

• payment.succeeded – Payment authorized successfully

• payment.failed – Payment declined or error occurred

• payment.refunded – Refund processed

Example: Outbox Implementation (Elixir):

8. Security and Compliance Modules

Security is embedded throughout the orchestration engine, not bolted on afterward.

PCI DSS Compliance:

• Tokenization: Card numbers are immediately tokenized and never stored in plaintext

• Encryption at Rest: All sensitive data encrypted using AES-256

• Encryption in Transit: All API calls use TLS 1.3

• Access Controls: Role-based access control (RBAC) for admin dashboards

• Audit Logging: Every payment action logged for compliance audits

3D Secure (3DS) Integration:

• Orchestrator handles 3DS authentication flows transparently

• Redirects customers to bank authentication page when required

• Resumes payment processing after successful authentication

Fraud Detection:

• Real-time fraud scoring for each transaction

• Velocity checks (e.g., "5 transactions from same IP in 1 minute")

• Geographic anomaly detection (e.g., "customer usually in US, now in Russia")

• Integrates with third-party fraud services (Sift, Forter, Riskified)

Regulatory Compliance:

• PSD2 SCA: Enforces Strong Customer Authentication for EU transactions

• GDPR: Handles data deletion requests and consent management

• KYC/AML: Integrates with identity verification services

Example: 3DS Flow

How Payment Orchestration Works: End-to-End Flow

Let's walk through a complete transaction to see how all the components work together:

Step 1: Customer Initiates Payment

When a customer clicks “Pay Now,” the website securely sends their payment information to the merchant’s system. This code shows how the site requests the payment to be processed, using a unique key to prevent duplicate charges and a tokenized card so sensitive card details aren’t exposed. The system also keeps track of which customer and order the payment belongs to.

Frontend (React/Next.js):

Step 2: API Gateway Validates Request

When your payment request reaches the system, it first ensures everything is correct and secure. It checks your credentials, makes sure the request isn’t a duplicate, and confirms all necessary information is included. If the request was already processed, it returns the previous result to avoid double charges.

• Authentication: Verifies JWT token or API key is valid

• Rate Limiting: Checks if merchant is within rate limits

• Idempotency: Checks if this idempotency key was used before

  • If yes: Returns cached response immediately (prevents duplicate charges)

  • If no: Proceeds to next step

• Request Validation: Ensures all required fields are present and valid

Step 3: Orchestration Core Receives Request

Once your payment is validated, the system creates a record of it in the database as “pending,” announces internally that a payment has started, and asks the routing system to find the best payment processor to handle it.

1. Saves Transaction: Creates a transaction record in the database with status = pending

2. Publishes Event: Writes payment.initiated event to outbox table

3. Calls Routing Engine: Asks routing engine to select best PSP

Step 4: Routing Engine Selects PSP

The routing engine compares all available payment providers, looking at fees, reliability, and speed. For example, it might evaluate Stripe, Adyen, and Checkout.com for your $99.99 card payment. It then selects the one with the best combination of success rate, speed, and cost.

Available PSPs: Stripe, Adyen, Checkout.com

Transaction: $99.99 USD, Card payment, Customer in California

Evaluation:

- Stripe: Fee = $3.19 (2.9% + $0.30), Success Rate = 94%, Latency = 250ms

- Adyen: Fee = $3.29 (3.0% + $0.30), Success Rate = 96%, Latency = 180ms

- Checkout.com: Fee = $2.99 (2.7% + $0.30), Success Rate = 93%, Latency = 220ms

Selected: Adyen (highest success rate, acceptable fee)

Step 5: PSP Connector Processes Payment

Once the best payment provider is selected (e.g., Adyen), the system sends your payment details to that provider. The connector acts as a translator, converting the system’s instructions into a format the provider understands, sending it securely, and then translating the response back.

The Adyen connector:

1. Transforms request to Adyen's API format

2. Calls Adyen's API via HTTPS

3. Receives response from Adyen

4. Normalizes response to orchestrator's standard format

Step 6: Handle Response

Once the payment provider (e.g., Adyen) processes the transaction, the system handles the result in one of three ways:

Scenario A: Payment Succeeds

Adyen approves the transaction:

Orchestrator:

1. Updates transaction status to success

2. Records PSP reference ID

3. Publishes payment.succeeded event

4. Returns success response to merchant:

Scenario B: Payment Declined

Adyen declines the transaction (e.g., insufficient funds):

Orchestrator:

1. Marks transaction as declined (not failed—important distinction)

2. Does NOT retry (legitimate decline)

3. Returns decline response to merchant

Scenario C: PSP Error (Network Timeout)

Adyen API doesn't respond within timeout (e.g., 5 seconds):

Error: Request Timeout

Orchestrator activates fallback logic:

1. Marks first attempt as failed

2. Selects backup PSP (e.g., Stripe)

3. Retries payment with Stripe

4. If Stripe succeeds, returns success

5. If Stripe also fails, tries tertiary PSP

6. If all PSPs fail, returns final error

Step 7: Notification & Confirmation

Regardless of outcome, orchestrator:

1. Sends webhook to merchant's callback URL

2. Publishes final event to Kafka

3. Updates merchant dashboard in real-time

4. Sends email receipt to customer (if configured)

Building vs. Buying: Payment Orchestration Engine

A custom-built Payment Orchestration Platform gives you complete control over your payment strategy, designed around your specific operations and long-term goals. You create a centralized system that handles provider integrations, transaction routing, reporting, fraud management, and compliance, all on your terms.

Unlike off-the-shelf platforms, you're not restricted by another company's roadmap. However, this freedom comes with full responsibility for architecture, maintenance, compliance, and scalability.

Build (Custom Development)

Investment Overview:

• Year 1 Total Cost: ~$800,000 (development team, infrastructure, PSP integrations, compliance, initial maintenance)

• Ongoing Annual Costs: ~$450,000 (maintenance, infrastructure, compliance audits)

• Time to Market: 6-12 months

Building in-house means you have full control over your solution, the feature set, payment flows, operational decisions, and most importantly, all payment data. This enables you to provide an optimal checkout experience with special features that give you a competitive advantage. You can also establish payment analytics to gain valuable insights into customer behavior and continuously improve your offerings.

Best for companies that:

• Process >10M transactions/year (where per-transaction fees become prohibitive)

• Have specialized routing requirements

• Possess in-house payment engineering expertise

• Need deep integration with proprietary internal systems

• Want to differentiate through custom payment experiences

Buy (Third-Party Solution)

Investment Overview:

• Year 1 Total Cost: ~$200,000 (setup fee + platform fees + per-transaction fees)

• Ongoing Annual Costs: ~$180,000 (scales with transaction volume)

• Time to Market: Weeks to months

Popular solutions like Primer.io, Spreedly, Gr4vy, and Payrails offer pre-built orchestration that you license and integrate into your environment. These platforms come with popular payment methods supported out of the box, remain flexible to your requirements, and can run on your infrastructure while the vendor handles compliance, maintenance, and continuous updates.

Best for companies that:

• Process <5M transactions/year

• Need to go live quickly

• Lack specialized payment engineering expertise

• Want to offload compliance burden

• Prefer predictable operating costs

The Hybrid Path

Many successful companies start with a third-party platform to validate product-market fit, then build custom orchestration once they reach scale (>10M transactions/year). This approach lets you move fast initially while preserving the option to optimize costs and control at scale.

Build if you have the scale, expertise, and need for differentiation. Buy if you need speed, predictability, and want to focus your engineering resources elsewhere. Or start with buy and graduate to build as your business scales.

Top Payment Orchestration Engine Architecture Providers

IXOPAY: An enterprise-grade modular platform based in Austria with 200+ PSP integrations and 300+ payment methods. Features rule-based routing, tokenization, and automated compliance, ideal for large merchants with complex global payment flows needing extensive provider options and risk management.

Corefy: A cloud-based universal payment hub supporting 1,200+ payment providers, 500+ ready-made integrations, and 200+ currencies including cryptocurrencies. Offers smart routing, unified analytics, and fraud prevention—suited for businesses with high complexity and cross-border operations.

Crafting Software: A customizable enterprise orchestration engine provider with modular architecture supporting multi-PSP integration and PCI compliance. Offers configurable workflows and advanced risk management, tailored for high-volume merchants requiring custom payment solutions.

Gr4vy: A cloud-native, no-code platform enabling enterprises to manage multiple providers with smart routing and real-time cost optimization. Provides fraud tools and a single integration point, designed for mid-to-large merchants and SaaS platforms needing sophisticated payment controls.

Spreedly: A processor-agnostic, vendor-neutral orchestrator with strong API-first architecture enabling multi-acquirer routing. Ideal for businesses wanting maximum flexibility, avoiding vendor lock-in, and optimizing cost and acceptance rates across providers.

Cybersource (Visa): An open architecture platform managing end-to-end payment processing across channels, methods, and geographies. Best for merchants with existing payment infrastructure seeking a cohesive orchestration layer to unify their payment operations.

Conclusion

Whether you're handling 100,000 or 100 million transactions annually, the principles remain the same: centralize integrations, optimize routing, maintain resilience, and never depend on a single provider.

Your next steps depend on where you are today:

If you're just starting out or processing under 5M transactions yearly (e.g., a growing SaaS startup with $5M ARR, an emerging e-commerce brand doing $10M annually), integrate a third-party orchestration platform like Primer, Spreedly, or Gr4vy. Get to market in weeks, validate your payment strategy, and preserve engineering resources for your core product. This approach minimizes upfront costs while giving you enterprise-grade payment capabilities immediately.

If you're scaling rapidly (5-10M transactions), think mar

ketplace platforms handling $50M GMV, subscription businesses with 100k+ active subscribers, or multi-brand retail operations, this is your decision window. Evaluate your per-transaction costs, assess your engineering capacity, and plan your orchestration roadmap. Consider partnering with specialists like Crafting Software who can deliver custom orchestration solutions tailored to your specific workflows, or continue with a vendor while building internal expertise for an eventual transition.

If you're at enterprise scale (>10M transactions), established e-commerce giants processing $500M+ annually, fintech platforms, global marketplaces, or multinational corporations with complex payment flows, the math favors building or commissioning a custom solution. Work with providers like Crafting Software to architect enterprise-grade orchestration engines with configurable workflows and advanced risk management, or assemble your in-house payment engineering team. The upfront investment pays dividends in control, cost savings, and competitive differentiation.

Payment Orchestration Engine Architecture FAQ

1. At what transaction volume does building a custom payment orchestration engine become more cost-effective than using a third-party platform?

The breakeven point typically occurs around 10M transactions per year. With third-party platforms charging $0.05-$0.15 per transaction, you'd pay $500k-$1.5M annually in per-transaction fees alone at this volume. A custom-built engine costs ~$800k in year one and ~$450k annually thereafter, making it financially advantageous beyond 10M transactions. However, factor in your engineering capacity and time-to-market requirements—if you need to launch within 3-6 months, buying makes more sense initially.

2. How do I implement automatic failover routing when my primary PSP goes down without causing duplicate charges?

Implement idempotency keys and the circuit breaker pattern. Each payment request should include a unique idempotency key stored in your database. When your primary PSP times out or returns a 5xx error (not a decline), your orchestration engine checks if a transaction with that idempotency key already exists. If not, it routes to your secondary PSP with the same idempotency key. The circuit breaker monitors PSP health—after 5 consecutive failures, it automatically routes traffic to backup PSPs for 60 seconds before retrying the primary.

3. Can a payment orchestration engine handle cryptocurrency payments alongside traditional card payments?

Yes, modern orchestration engines like Corefy support 200+ currencies including cryptocurrencies. The architecture treats crypto processors (BitPay, Coinbase Commerce) as standard PSP connectors. Your routing engine can direct crypto transactions to specialized processors while routing card payments to traditional gateways. The key is implementing proper currency conversion logic, handling crypto's price volatility during checkout, and managing different settlement timeframes (crypto settlements can take 10-60 minutes vs. instant card authorizations).

4. What's the minimum engineering team size needed to build and maintain a custom payment orchestration platform?

You need at least 4 full-time engineers with payment domain expertise: 2 backend engineers (for core orchestration logic and PSP integrations), 1 DevOps engineer (for infrastructure, security, and PCI compliance), and 1 frontend engineer (for admin dashboards and reporting). Post-launch, you'll need 2-3 engineers for ongoing maintenance, new PSP integrations, and feature development. If your team lacks payment-specific experience, add 3-6 months to your timeline and budget for external payment consultants.

5. How does smart routing reduce involuntary churn for subscription businesses with recurring payments?

Smart routing applies intelligent retry logic for failed recurring payments. Instead of immediately canceling subscriptions after one decline, the orchestration engine: (1) retries the payment 24 hours later when the card might have funds, (2) routes retries to alternate PSPs with higher approval rates for that card type, (3) attempts different times of day (avoiding end-of-month when accounts are low), and (4) uses ML models to predict optimal retry timing based on historical success patterns. This can recover 10-15% of failed recurring payments, significantly reducing involuntary churn.

6. What PSP integration challenges should I expect when expanding from US/EU markets to Asia-Pacific?

APAC requires integrating local payment methods (Alipay, WeChat Pay, GrabPay, PayNow) that don't follow standard card network protocols. You'll need PSPs with strong APAC presence like Adyen or local specialists like 2C2P. Key challenges: (1) different authentication flows (some require QR codes or app-to-app redirects), (2) real-time bank transfer confirmation vs. card's instant auth, (3) varying settlement currencies and FX handling, (4) different refund policies (some methods don't support partial refunds), and (5) compliance with local regulations (China's cross-border payment restrictions, Singapore's PDPA).

7. How do I maintain PCI DSS compliance when integrating multiple payment providers through an orchestration layer?

Your orchestration engine must never store raw card data. Implement immediate tokenization at the client side (using Stripe.js, Adyen's Drop-in, or similar) before data reaches your servers. Your servers only handle tokens, never PANs. This reduces your PCI scope to SAQ-A (simplest compliance level). For your orchestration infrastructure: (1) encrypt all data at rest (AES-256), (2) use TLS 1.3 for data in transit, (3) implement role-based access controls, (4) maintain detailed audit logs, and (5) conduct annual penetration testing. Most third-party orchestration platforms (Primer, Gr4vy) are PCI Level 1 certified, transferring compliance burden to them.

8. What's the implementation timeline for migrating from a single PSP to a multi-PSP orchestration setup?

For a third-party orchestration platform: 4-8 weeks (1 week for contract/setup, 2-3 weeks for integration and testing, 1-2 weeks for gradual production rollout, 1-2 weeks for monitoring and optimization). For a custom-built solution: 6-12 months (1 month planning/architecture, 3-4 months core development, 1-2 months PSP integrations, 1-2 months security/compliance, 1-2 months testing, 1-2 months rollout). Pro tip: start with 10-20% of traffic routed through the orchestration layer, monitor for 2 weeks, then gradually increase to 100% to minimize risk during migration.