AI-powered payment routing is reshaping the future of digital commerce. Khalil Kammoun, Head of shared services at Worldline, explains how this technology unlocks revenue, improves authorisation rates, and ensures business continuity across global payments.
The digital payment landscape has become a powerhouse of global commerce, growing at an extraordinary pace. By 2025, this market is projected to hit a monumental transaction value of $20.09 trillion, underscoring the critical role of seamless digital payments in today’s economic framework. With such tremendous growth comes a pressing need for businesses to optimise transactions, minimising costs and enhancing approval rates.
Enter AI-powered routing, an innovative solution that leverages advanced payment technologies to transform transaction efficiency and revenue potential.
Choosing the best acquirer for each transaction has always been a balancing act for businesses. Inefficient routing decisions can lead to higher costs, elevated decline rates, and lost revenue opportunities. With millions of payments to process daily, especially across diverse sectors, businesses urgently need solutions to streamline processes. AI-powered or Smart Routing addresses this challenge by deploying intelligent, AI-driven mechanisms that enhance payment flows, reduce operational headaches, and unlock new paths for revenue growth.
What is payments routing and how does it work?
On the surface, payment processing might appear simple, but beneath that lies a labyrinth of decisions involved in determining the flow and approval of transactions. This is where AI-powered or smart routing becomes indispensable.
Smart Routing technology works as an intelligent payment decision engine, using predefined rules to guide payments to the most optimal acquiring bank for each transaction. This empowers businesses to configure the rules based on key considerations such as reducing fees or improving approval rates. This ensures that the payment system dynamically adapts to the company’s unique goals.
The parameters businesses can customise include:
- cost optimisation: payments are directed to acquirers with the lowest applicable interchange fees, ensuring minimal transaction costs.
- higher approval likelihood: the system prioritises acquirers with higher success rates for approvals, improving customer satisfaction and completion rates.
- scalable segmentation: companies can flexibly allocate transaction volumes across multiple acquirers, achieving an optimal balance while preparing for growth.
This flexibility positions AI-powered routing as an indispensable tool across industries, geographies, and transaction channels. By automating routing decisions and simplifying complex payment ecosystems, businesses can focus more on scaling their operations and less on manual processing inefficiencies.
The AI advantage in routing
While rule-based routing systems are effective, the incorporation of artificial intelligence elevates the capabilities of Smart Routing, offering unparalleled precision and adaptability. AI excels at ingesting vast amounts of historical and real-time data, making predictive, intelligent decisions that maximise the efficiency of every transaction.
- Boosted authorisation rates: AI continuously learns from transaction trends, identifying patterns that can boost payment approval rates. By reducing the likelihood of incorrectly routed payments, companies can ensure smoother payment processing
- Data-driven optimisation: By analysing historical transaction performance and fees, AI pinpoints the ideal route for each transaction, which reduces costs and prevents declines.
- Predictive problem-solving: Beyond choosing the best acquirer, AI accounts for dynamic factors such as network delays or regional issues, ensuring that transactions go through seamlessly even during disruptions.
AI doesn’t just optimise routing—it de-risks it. With continuous improvements and self-learning capabilities, business outcomes such as approval rates, operational accuracy, and overall cost savings soar to levels unattainable with manual interventions.
Core business benefits of Smart Routing
Integrating AI-powered routing technology offers numerous tangible advantages for businesses operating in today’s competitive digital commerce environment. Here’s how it shapes operations:
- Unified Omnichannel Integration: Modern customers expect seamless experiences across all touchpoints, whether purchasing online, in-app, or in-store. Smart Routing enables businesses to integrate payment systems across multiple channels, creating a unified, reliable payment ecosystem that alleviates customer frustration while delivering operational simplicity.
- Guaranteed Business Continuity: Payment channel operations can grind to a halt with a single point of failure—such as an unavailable acquirer. By directing transactions to alternate acquirers automatically during outages or high volumes, Smart Routing ensures uninterrupted payment functionality. This prevents lost sales and maintains buyer confidence even during unforeseen disruptions.
- Cost-Effective Operations: Smart Routing takes an intelligent approach to saving costs by funnelling transactions to acquirers with minimal interchange fees. Over time, these incremental cost savings accumulate, significantly contributing to business profitability without demanding constant manual oversight.
- Ease of deployment: One of the standout features of Smart Routing systems is their simple integration process. Businesses can configure routing rules and integrate the technology into existing workflows efficiently, minimising downtime and implementation risks. This intuitive, user-friendly setup ensures faster adoption without lengthy training cycles.
- Improved approval rates: Even small improvements in approval rates can lead to substantial revenue gains for companies handling large transaction volumes. Rule-based routing alone drives a 3% average improvement in authorisation rates. However, AI-driven processes amplify this impact, adding a further 2% gain by leveraging advanced data methods. These enhanced rates mean increased revenue and reduced customer churn, each of which has a powerful impact on the business’s financial bottom line
Building a competitive edge in the payment revolution
Businesses today operate within an evolving payments ecosystem. From navigating stringent regulations to meeting customer expectations for seamless transactions, staying competitive demands smarter systems, and this is precisely where AI-powered routing delivers value. By integrating AI-powered routing technology, businesses can achieve the trifecta of streamlined processes, improved cost management, and greater payment reliability.
Smart Routing is also a game-changer for global scalability. Its automation capabilities allow companies to diversify their acquiring networks while optimising payment performance across regions. This is particularly invaluable for enterprises dealing with cross-border payments, where complexities such as differing fees and processing standards often impede efficiency.
Furthermore, payments routing, bolstered by predictive analytics, aligns with future-focused goals. Businesses that prioritise AI-powered payment solutions position themselves ahead of peers, adapting easily as consumer demands evolve and transaction volumes grow.
Preparing for the future with AI-powered routing
The rapid evolution of payments means that businesses must remain resilient and proactive in adopting advanced tools. Smart Routing isn’t just a tool—it’s a strategy that ensures companies are ready for tomorrow’s challenges while unlocking untapped growth potential today.
The adoption of machine learning within payment routing offers the perfect example of how technology continuously evolves to outpace challenges and deliver security, scalability, and efficiency. By selecting optimal routes for payments, this solution improves operational transparency while reducing friction, costs, and delays.
Why businesses cannot afford to wait
The predicted $20.09 trillion value of digital payments speaks to an enormous growth opportunity—but also to an equally significant challenge for businesses yet to optimise their payment strategies. The companies that will excel are those that leverage innovative tools like AI to optimise approvals, reduce costs, and provide consistent payment efficiency across global markets.
Smart Routing is no longer a luxury; it is a necessity in today’s hyper-competitive market. Businesses investing in smarter payment systems can future-proof their operations while benefiting from substantial short-term returns.
By empowering businesses to customise, automate, and optimise their payment flows, Smart Routing doesn’t simply streamline commerce—it provides a blueprint for scalable revenue and sustainable growth. For businesses ready to thrive amid growing complexity, AI offers the ideal combination of innovation and reliability.
Khalil Kammoun is Head of shared services at Worldline. He began his career as a Management Trainee at Tenovis in 2001, where they quickly moved up to become the European Sales Manager. In 2004, they joined Avaya as a Partner Manager, responsible for international partner management. In 2007, they transitioned to Aastra, taking on the role of Product Line Manager.
In 2012, Kammoun joined SIX Payment Services as a Senior Product Manager in the E-Commerce division, and eventually became the Head of Product Management E-Commerce. Kammoun then moved to Worldline Merchant Services in 2018, initially as the Head of Portfolio and Product Management – Omnichannel & Collecting. He later took on the role of Head of Portfolio and Partner Management in the Global Business Division Acceptance.
In addition to their roles in the payment services industry, Kammoun also serves as a Board Director at nexo standards, starting in 2021.
