Direct-to-Scheme Processing

How Enterprise Merchants Are Taking End-to-End Control Card Payments Processing

The billion-dollar question that keeps enterprise CFOs awake at night just got an answer they didn't expect.

For years, companies like Uber, Facebook, and Zalando have built their own payment subsidiaries: Uber Payments, Facebook Payments, and Zalando Payments.

They've hired armies of payment engineers, obtained licenses, and created sophisticated orchestration platforms that route transactions across dozens of acquirers.

But here's the twist: despite owning the entire payment stack, they still hand over the final mile to traditional acquirers and PSPs.

They've built Ferrari engines but kept the bicycle wheels.

A new wave of enterprise merchants is changing that calculation.

They're bypassing acquirers entirely and connecting directly to Visa and Mastercard networks through cloud-native processors like Silverflow.

The economics are compelling, but the real drivers go deeper than cost savings. These merchants want something their current providers can't deliver: complete control over their payment destiny.

In this edition of Payments Strategy Breakdown, I'll explain why billion-dollar merchants are making the leap from orchestration to direct processing, how cloud-native infrastructure makes it possible, and why this represents the final evolution of composable payments.

Let's dive in...

The Acquirer Middleman Problem

Even the most sophisticated enterprise payment operations face the same fundamental constraint: they're still dependent on acquirers to reach card networks.

Take Uber's payment architecture.

The company processes billions in transactions through Uber Payments, its licensed payment institution. They've built world-class fraud detection, dynamic routing, and real-time optimization. But when a rider's card gets declined in São Paulo, Uber still depends on their Brazilian acquirer's relationship with local issuers.

That acquirer might optimize for their portfolio, not Uber's specific needs. They might route Uber's premium transactions alongside budget hotel bookings, missing optimization opportunities that could improve authorization rates by 2-3%.

Facebook Payments faces similar constraints.

Despite processing massive volumes through their own infrastructure, they can't access the raw scheme data that would enable issuer-specific optimization strategies.

Their acquirers provide summary reports, not the granular transaction metadata that would feed their machine learning models (or so we are told).

Zalando Payments has built sophisticated European coverage, but expanding to new markets still means finding local acquirers, negotiating terms, and accepting whatever capabilities those partners provide.

Adding support for new payment methods depends on acquirer roadmaps, not Zalando's business priorities.

The pattern repeats across enterprise merchants: they've solved the orchestration puzzle but hit the acquirer ceiling.

What Direct-to-Scheme Processing Actually Means

Traditional payment processing follows a predictable path:

Merchant → PSP → Acquirer → Card Network → Issuer.

Each layer adds latency, costs, and constraints.

Direct-to-scheme processing eliminates the middle:

Merchant → Card Network → Issuer.

This isn't theoretical.

Bolt's partnership with Silverflow demonstrates how it works in practice.

The mobility platform processes payments across ride-hailing, food delivery, e-scooter rentals, and car sharing in 50+ countries.

Instead of managing separate PSP relationships in each market, Bolt routes everything through Silverflow's direct connections to Visa and Mastercard.

The technical architecture matters less than the strategic implications.

Bolt can now experiment with issuer-specific routing strategies, implement payment optimizations in days rather than months, and access complete transaction data that feeds their fraud and customer analytics models.

Jüri Laur, Bolt's Director of Product for Payments, explained their rationale: "Our goal is to manage key data elements internally to better understand and influence payment flows, rather than depending on third parties."

Notice he didn't mention cost savings first.

The primary driver is control.

The Technology Catalyst

Direct processing was technically possible before, but practically impossible.

Building connections to card networks required mainframe expertise, 18-month certification processes, and millions in infrastructure investment.

Cloud-native processors changed the equation.

Companies like Silverflow and other new cloud-native processors provide the network connectivity, certification, and compliance infrastructure through APIs rather than requiring merchants to build processing platforms from scratch.

Silverflow's architecture illustrates the transformation.

Their platform provides direct connections to Visa and Mastercard through AWS infrastructure with 600+ points of presence globally.

Merchants get sub-100ms latency worldwide with complete scheme data transparency, but they don't need to hire mainframe developers or manage PCI certification internally.

The implementation timeline reflects this shift.

Traditional direct processing projects required 6-18 months. Silverflow's customers report going live in weeks, not years.

This infrastructure democratization explains why direct processing is accelerating. The technical barriers that previously limited this approach to the largest financial institutions have largely disappeared.

Beyond Cost: The Strategic Advantages

While processing cost savings attract initial attention as enterprises typically reduce fees by 25-45%, the strategic benefits prove more valuable in the long term.

Here are the benefits that come with Direct-to-Scheme processing:

1. Experimentation Velocity
   Direct processors can implement payment optimizations in days rather than months. When Silverflow deploys a new feature, it becomes available to all customers immediately. PSPs and acquirers operate on change management cycles designed for their entire merchant portfolio, not individual enterprise needs.

2. Issuer-Level Optimization
   Each Bank Identification Number represents a specific issuer and card program. Direct processing enables merchants to develop issuer-specific strategies that optimize authorization rates and minimize interchange costs for different cardholder segments. Traditional PSPs aggregate this opportunity away through standardized routing.

3. Complete Data Access
   Direct connections provide raw scheme data, including detailed authorization response codes, network token usage patterns, and real-time transaction signals. This data feeds advanced analytics impossible through PSP intermediation. Merchants can build proprietary competitive advantages through payment intelligence.

4. Geographic Flexibility
   By utilizing a Cloud-Native Processing Engine, merchants can enter new markets either directly or through BIN-Sponsorships with local acquirers while still controlling their own technology stack. This allows them to launch in new markets with their own insights and setup rather than having to figure out what it takes to succeed through a local acquirer.

Advantages that we have seen from successful Full-Stack Acquirers, who grew from Enterprise PSPs into Acquirer.

The Implementation Reality

However, not every enterprise merchant benefits from direct processing.

The model works best for companies with specific characteristics.

Volume represents the primary qualifier.

Merchants processing under $100 million annually rarely justify the complexity.

Those above $500 million almost always benefit from optimization opportunities.

Technical sophistication determines implementation success.

Direct processing requires teams comfortable with API integration, compliance management, and monitoring multiple network relationships.

Companies lacking payment expertise should build internal capabilities first.

Geographic complexity amplifies value.

Merchants selling globally face varied local payment preferences, regulatory requirements, and issuer performance patterns. Single providers excel in their home markets but often struggle with international optimization.

Product complexity matters significantly.

Marketplaces managing split payments, subscription businesses fighting involuntary churn, and platforms enabling embedded finance need specialized capabilities that general-purpose acquirers struggle to deliver efficiently.

The strongest candidates are growing enterprises with payment-savvy teams facing clear performance gaps in their current setup.

The Vendor Landscape

Beside enterprise merchants, the entire landscape is continuing to grow, to provide PSPs, Acquirers, and Banks with options for innovation.

The three distinct approaches emerging in the cloud-native processor market include:

• Scheme-Integrated Platforms (Silverflow) Globally-focused, with strong proven clients in Europe, providing direct Visa and Mastercard certifications, advanced experimentation capabilities, and transparent fee structures. Best for enterprises seeking immediate direct processing capabilities with proven enterprise implementations.

• Full-Stack (Issuing and Acquiring) Capabilities (Highnote) US-focused started as an issuing platform and has recently expanded to acquiring. Focusing on merchants who are looking to integrate both their issuing and acquiring capabilities into one processing platform.

• Banking-Integrated Solutions (Thought Machine) Comprehensive platform approach for enterprises developing embedded financial services beyond standard payment processing. Longer implementation timelines but deeper banking integration capabilities.

When doing a vendor selection, it should match enterprise requirements rather than general market reputation.

Each platform optimizes for different use cases and implementation approaches.

Looking Forward

Direct-to-scheme processing represents the natural conclusion of the composable payments evolution.

Merchants started by replacing monolithic PSPs with orchestration platforms.

Now they're eliminating the final intermediary layer.

The trend will accelerate as more cloud-native processors achieve network certifications and enterprise merchants recognize the strategic advantages beyond cost optimization.

The combination of technical feasibility and competitive pressure creates compelling business cases for sophisticated merchants.

Those who've already invested in payment orchestration and internal capabilities are best positioned for this transition.

Companies still dependent on a single PSP should consider whether their current approach supports their growth ambitions.

The shift from intermediated to direct processing continues.

Merchants who embrace this evolution will control their payment destiny.

Those who resist will remain dependent on providers whose priorities may not align with their business objectives.

The question isn't whether to consider direct processing, but when your scale and capabilities justify making the transition.

For enterprise merchants processing significant volumes with complex requirements, the future is direct. The infrastructure exists, the economics work, and the strategic advantages compound over time.

Build payment capabilities today that give you options tomorrow, and you'll never be constrained by someone else's roadmap again.

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