Transaction rules
Transaction rule configuration provides merchants with precise controls to accept, decline or reroute payments based on static data points. Payment operations teams use transaction attribute filtering to evaluate individual purchases against specific country, currency and card-level parameters before acquirer submission.
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Cardflo's transaction rules provide granular control over how individual payments are processed. Merchants can define specific parameters that dictate whether a transaction is accepted, declined, routed to a particular acquirer, or subjected to additional verification.
This level of control optimises payment flows, manages risk, and enhances conversion rates by applying logic precisely where needed.
Routing payments or triggering 3DS based on card type optimises global performance. By carefully setting risk parameters, merchants can enhance payment flow efficiency across all acquirer partners.
Transaction rules overview
Transaction rules represent the logic layer within a payment gateway or orchestration platform that governs the lifecycle of an individual payment request. By applying conditional statements to inbound data, these rules determine the path of a transaction before it reaches the acquirer.
Logic is typically structured using attributes such as the Bank Identification Number (BIN), Merchant Category Code (MCC), or geographical metadata. This mechanism allows a merchant to manage risk profiles and cost structures in real time.
Rather than treating all traffic as uniform, rules enable the segmentation of payments by risk level, value, or origin. This ensures that high-value transactions may require more stringent verification like SCA, while low-friction paths are maintained for low-risk scenarios.
This granularity is essential for businesses operating across multiple jurisdictions where local regulations and scheme rules vary. Effective rule implementation focuses on balancing fraud prevention with the preservation of authorisation rates.
How transaction rules works
Attribute extraction and identification
When a customer initiates a payment at the checkout, the system identifies specific metadata associated with the request. This includes the card issuer country, the specific BIN, the currency, and the Merchant Identification Number. These variables serve as the foundational data points upon which subsequent logic is applied.
Application of conditional logic
The transaction passes through a sequence of pre-defined 'if-then' statements. For example, a rule might specify that if a transaction exceeds a certain value and originates from a high-risk region, it must be diverted. This stage determines the immediate fate of the payment before any network calls occur.
Fraud and authentication filtering
Based on the internal logic, the system decides whether to trigger Strong Customer Authentication via 3DS. Rules can be configured to request 3DS only when risk thresholds are met, thereby reducing friction for low-value or trusted payments while maintaining compliance with relevant PSD2 or regional regulations.
Direction to optimal gateway
Once the transaction is validated, the rules engine chooses the most appropriate acquirer. This decision may be based on the lowest interchange-plus costs, the highest historical authorisation rates for the specific card type, or the need to meet volume commitments stipulated in merchant service agreements.
Authorisation and response handling
The request is transmitted to the selected acquirer. Upon receiving a response, the rules engine can interpret decline codes. If a soft decline occurs, the system may initiate an automated retry through a different route, provided the merchant's ruleset permits subsequent attempts for that specific failure reason.
Why transaction rules matters
Mitigation of processing costs
Payment costs are rarely uniform across different card schemes or regions. Transaction rules allow for the prioritisation of routes with lower scheme fees or interchange costs. By identifying local cards and routing them through domestic acquirers, businesses avoid the higher costs associated with cross-border processing. This systematic approach ensures that the most cost-effective path is chosen for every individual line item processed by the gateway.
Compliance and risk management
Regulatory environments like PSD2 require specific authentication behaviours. Transaction rules provide the mechanism to enforce these requirements without applying them universally. Merchants can automate the exclusion of specific high-risk jurisdictions or restrict certain MCCs if they fall outside of risk appetite. This reduces the burden on manual review teams and protects the merchant from excessive chargeback rates or potential penalties from card schemes.
Transaction rules use cases
Wholesale order value ceilings
Trade wholesalers need to prevent exceptionally large card orders from reaching a standard MID when pallet quantities push the transaction above an approved value ceiling. Cardflo applies amount-based rules that decline the payment or route eligible commercial card transactions to a suitable acquirer partner configuration.
Licensed territory payment blocks
Regulated operators must reject card payments where the billing country, issuing country or BIN country falls outside territories covered by their licence. Cardflo filters these static attributes before authorisation and sends only permitted transactions to the acquirer partner network, supporting territory-specific acceptance policies.
AOV filters for subscription boxes
Equipment hire operators may exclude prepaid cards because available balances can be insufficient when deposits and final damage charges are submitted separately. Cardflo identifies configured prepaid BIN ranges at checkout and declines those instruments while allowing eligible debit and credit cards to follow the relevant routing rule.
MID currency acceptance controls
Retailers operating separate sterling and euro MIDs need to stop unsupported currencies reaching an acquirer partner configuration intended for domestic settlement. Cardflo matches the transaction currency against permitted values, declining incompatible payloads or directing accepted GBP and EUR payments to the corresponding configured route.
Transaction rules by the numbers
Typical uplift observed in the industry when transitioning from static routing to a multi-acquirer setup using smart transaction rules.
Standard range of savings reported by merchants who implement cost-based routing for cross-border and regional domestic transactions.
The expected performance threshold for modern payment orchestration engines when executing complex conditional logic at the gateway level.
Methodology: these figures are illustrative ranges drawn from published industry data and observed merchant cohorts, not guarantees. Actual results depend on your risk profile, card mix, geography and acquiring setup, and are confirmed only in your own pricing and approval terms.
Related terms
Talk to our team about a live rollout across our acquirer partners' rails.
What you get with Transaction rules
- Configure logic based on specific Bank Identification Number ranges for precise issuer targeting.
- Restrict or permit transactions according to the cardholder's geographic location or IP address.
- Automate the routing of high-value payments to acquirers with superior risk-modelling capabilities.
- Enforce Strong Customer Authentication based on transaction value and regional regulatory requirements.
- Identify and segment transactions by Merchant Category Code to manage industry-specific risk profiles.
- Direct domestic card traffic to local acquirers to minimise cross-border fees and interchange.
- Implement automated retries for soft declines by switching to secondary processing partners.
- Assign specific Merchant Identification Numbers for different product lines or business units dynamically.
- Filter transactions based on historical fraud data and internal blacklists at the gateway level.
- Apply specific currency conversion rules based on the cardholder's native currency and FX rates.
A short scoping call, then a written plan for your MIDs.
Questions about Transaction rules
How do transaction rules affect the speed of the checkout process?
Rules are typically processed within the gateway in milliseconds. The logic is applied before the authorisation request is sent to the network.
While complex rulesets require more processing power, a well-managed engine ensures that the latency impact is negligible. In most cases, the speed gains from avoiding unnecessary authentication steps or routing to more efficient acquirers outweigh the initial processing time at the logic layer.
Can rules be used to prevent specific types of chargebacks?
Yes, rules can mitigate chargeback risk by identifying patterns associated with friendly fraud or stolen credentials. By enforcing 3DS on suspicious transactions or blocking high-risk IP ranges, a merchant can stop potentially fraudulent transactions before they reach the issuer.
However, rules cannot prevent all chargebacks, as some occur post-settlement for reasons unrelated to the initial authorisation logic.
What is the difference between a hard decline and a soft decline in rule logic?
A hard decline is a permanent refusal from the issuer, such as for a stolen card, where rules should not attempt a retry. A soft decline indicates a temporary issue, such as insufficient funds or a technical timeout.
Transaction rules can be configured to recognise these differences, allowing the system to intelligently retry soft declines through an alternative route while immediately stopping hard declines to avoid scheme penalties.
Is it possible to route transactions based on the cost of processing?
Merchants can use rules to direct transactions to whichever acquirer offers the best pricing for that specific card type.
For example, if one acquirer has a better rate for commercial cards, the rules engine can identify the card type via the BIN and route the transaction accordingly. This ensures that the merchant is not overpaying for interchange-plus or scheme fees on high-cost transactions.
Can I set different rules for recurring payments versus one-off transactions?
Payment systems distinguish between Merchant Initiated Transactions and Customer Initiated Transactions. Rules can be configured to apply different risk filters to these categories.
Typically, a CIT might require 3DS for the initial setup, while subsequent MITs are permitted through the ruleset without further customer intervention, provided the appropriate tokens and indicators are present in the request.
How does BIN-based routing work in a transaction ruleset?
BIN routing uses the first six to eight digits of a card number to identify the issuer and card product type. Rules are set to recognise these digits and apply specific logic.
For instance, a merchant might route all 'Gold' or 'Platinum' cards to an acquirer with higher approval thresholds for premium cards, or route all domestic debit cards to a local provider.
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