Design Payment Orchestrator

Designing a payment orchestrator means creating a system that intelligently routes, manages, and abstracts payment flows across multiple PSPs (Payment Service Providers), gateways, and alternative payment methods. It acts as a middle layer to provide flexibility, reliability, and optimization for merchants. Its key responsibilities include:

Routing transactions to the best-suited payment provider.
Retrying failed transactions with fallback providers.
Normalizing responses from different providers.
Handling fraud & compliance checks (3DS, SCA, PSD2).
Optimizing costs & performance (least-cost routing, latency-based routing).
Supporting reconciliation & reporting.

Key Considerations

Architecture

Modular & Extensible (plugins for new providers, fraud engines).
Event-driven design (Kafka, RabbitMQ for async flows).
Stateless services (for horizontal scaling).
Caching layer (for routing rules, merchant configs).

Data Model

Unified transaction schema (normalized across providers).
Idempotency keys (avoid duplicate processing).
Audit logs (for debugging & compliance).

Security

PCI-DSS compliance (tokenization, vaulting).
Encryption in transit & at rest (TLS, AES-256).
Role-based access control (RBAC) (for admin dashboards).
Support for velocity checks, IP/device fingerprinting, and risk scoring.

Performance & Reliability

Low-latency routing (cached rules, geo-distributed deployments).
Graceful degradation (handle provider outages).
SLA monitoring (track uptime, response times).

Business Logic

Smart retries (avoid retrying hopeless failures).
Surcharge & dynamic pricing (pass fees to customers).
Merchant-specific routing rules (custom logic per business).
A pluggable rule engine to define custom routing logic, based on region, BIN, card type, currency, issuer bank, or past performance.

User Stories

Multi-Provider Routing

As a Merchant, I want transactions to be routed to the cheapest/fastest payment provider, so that I can reduce costs and improve checkout success rates.
As a Payment Operations Manager, I want automatic fallback to a secondary provider if the primary one fails, so that we minimize declined transactions.
As a Data Analyst, I want A/B testing capabilities for payment providers, so that we can compare performance and optimize routing rules.

Payment Method Abstraction

As a Product Manager, I want to support multiple payment methods (cards, wallets, BNPL, etc.) through a common interface, so that users have flexible checkout options.
As a Developer, I want to abstract payment operations (authorize, capture, refund, etc.) across methods, so that I can build once and reuse everywhere.

Unified API

As a Developer, I want to integrate once with a single, consistent API, so that I don’t have to manage different PSP integrations myself.
As a Developer, I want the orchestrator to normalize PSP responses, so that I can handle success and failure cases the same way regardless of the provider.

Transaction Processing

As a Merchant, I want the orchestrator to retry soft-declined payments with a different provider, so that I can recover lost sales.
As a Merchant, I want to avoid retrying hard-declined transactions, so that I don’t annoy customers or increase fraud risk.
As a Merchant, I want idempotent payment requests, so that accidental retries don’t result in duplicate charges.
As a System Admin, I want webhook support for asynchronous payment status updates, so that I can keep my systems in sync without the need for constant polling.
As a Merchant, I want all providers to trigger consistent events, so that I don’t have to manage provider-specific logic.
As a Merchant, I want to initiate refunds or track disputes through a single system, so that I can resolve customer issues quickly.
As a Merchant, I want to see dispute history and status across all PSPs, so that I can manage chargebacks effectively.
As a Merchant, I want the ability to customize field mappings from a predefined template, so that I can easily adapt it to my specific business needs.

Reconciliation & Reporting

As a Finance Team Member, I want automated reconciliation between transactions and settlements, so that that accounting discrepancies are flagged early.

Tokenization & Vaulting

As a Merchant, I want to securely store customer payment methods for future use, so that I can support one-click and recurring payments.
As a Developer, I want to choose between orchestrator-managed vault or PSP vaults, so that I can comply with PCI and optimize performance.

Compliance & Security

As a Security Officer, I want the orchestrator to be PCI-DSS Level 1 compliant, so that I can reduce audit scope and maintain trust.
As a Merchant, I want support for 3DS and local authentication, so that I meet regulatory requirements and reduce fraud.
As a Compliance Officer, I want automatic 3DS2/SCA handling for PSD2 compliance, so that we avoid regulatory penalties.
As a Risk Manager, I want integration with fraud detection tools, so that we can block high-risk transactions.

Visibility & Monitoring

As a Merchant, I want to see real-time status and performance of each PSP, so that I can make informed decisions or take manual actions if needed.
As a System Admin, I want to auto-disable unhealthy providers, so that routing avoids failing paths without human intervention.
As a Architect, I want the system to have build-in metrics, so that we gain full visibility on how the system performs.
As a Merchant, I want access to dashboards showing success rates, decline reasons, and provider performance, so that I can optimize my routing and checkout strategy.

Scalability & Resilience

As a DevOps Engineer, I want circuit breakers for failing payment providers, so that our system doesn’t get overwhelmed by retries.
As a Developer, I want queue-based processing for high-volume periods, so that payments are processed reliably during spikes.