Last year in February, India experienced a widespread transactional outage that resulted in problematic or failed UPI transactions across various platforms like GPay, PhonePe, and BHIM.
Several banks (HDFC, SBI, etc.) experienced the impact of this outage, the disruption leading to many failed transactions from these banks. This is precisely what a robust payment infrastructure helps you prevent by enabling seamless transactions and enhancing customer satisfaction. It empowers you to navigate the common challenges that occur in the systems, like downtime, latency, and compliance.
This blog will explore the best practices for designing scalable, secure and future-first payment systems that perform optimally with each transaction. Read on!
Developer best practices for a resilient payment infrastructure
There are six key practices that developers should pay attention to when designing payment systems:
1. Designing for scalability
Scalability defines how quickly you can adjust a system to respond efficiently to incoming traffic. For example, during a sale event of a D2C brand, the website is likely to experience traffic spikes as shoppers rush to complete their orders and redeem offers. Such a heavy traffic load strains the servers, compromising performance and creating payment issues.
There are several best practices you can implement to ensure your payment system is scalable:
a. Load balancing
Load balancing is the process of distributing the incoming shoppers’ traffic across multiple servers. This method helps to reduce extreme loads on a single server and ensures that every server performs optimally without glitching or failing. Think of it as adding more highways to a destination to keep the roadways moving.
b. Horizontal scaling
Developers use horizontal scaling to enhance the capacity of their existing systems. It involves adding more machines or nodes to the existing setup to distribute the workload across multiple machines. Think of it as adding more lanes to a highway to let more traffic pass through.
c. Serverless architecture
You can explore serverless architecture, where a cloud service provider manages the infrastructure while you focus on building apps. This way, you don’t have to configure the hardware or deal with servers.
2. Ensuring high availability
High availability refers to the condition where a server remains available for client requests without slowing, shutting down, or hanging up. It is a parameter of server performance and is essential to ensure smooth payments from start to finish.
Some of the best practices you can use to ensure high availability are:
a) Redundancy
Redundancy is the practice of keeping multiple copies of critical data or system components to ensure continued functionality in case of system failures. Backups are stored across multiple locations or devices to ensure high availability.
In case one system fails during payments, another system with backup can seamlessly take over the operations.
b) Failover mechanisms
A failover mechanism is a backup operation mode that automatically switches to a standby database when the current system faces problems or shuts down. This ensures that even during a time of system failure, your customers can initiate transactions that are routed through the backup systems.
c) Active-active architecture
This architecture keeps all your nodes active to accept requests, working together to create a resilient system. This architecture is highly scalable and suitable for payment ecosystems.
3. Security and compliance
Security and compliance are integral to maintaining a payment ecosystem. You must ensure that your systems work according to PCI DSS mandates and safeguard payer data in the prescribed way.
You can consider:
a) Real-time fraud detection
Leverage ML and AI-based algorithms to power geolocation monitoring that helps identify payment frauds and protect businesses against losses. For example, you can use AI algorithms to identify unusual or anomalous payment patterns and block the transactions.
b) AI-powered compliance
Integrating AI into payment systems helps you stay updated with the latest regulatory changes that apply to payments and customer data (for example, RBI guidelines or GDPR).
c) Modern encryption
Modern encryption methods and real-time fraud detection techniques, such as blockchain and quantum encryption, show promise of securing data not only in the static mode but also during transactions. These methods can be used to protect sensitive information.
4. Optimising payment performance
Payment performance refers to the efficiency and speed with which a transaction is completed. Slower payments may drive customers away and reduce trust in your payment systems.
Here’s what you can do:
a) Reduce latency
Reducing payment latency enables faster payments by eliminating delays in request handling. Developers should design for faster API responses and optimized backend request handling to make this possible.
b) Use retries and intelligent routing
Failed payments reduce user trust in payment channels. To ensure a successful transaction the second time, initiate a retry immediately through a different gateway. This will help you retain your checkout customer while identifying a faulty gateway.
c) Leverage caching
Consider storing temporary user data during checkout processes to speed things along. For example, store user addresses, preferred payment methods, email IDs, etc., to cache to help customers check out quickly.
5. Monitoring and analytics
Monitoring and analytics are the pillars of ensuring sustained performance by your payment systems:
a) Real-time transaction monitoring
Setting up automated alerts can help flag anomalies instantly, reducing downtime and improving the user experience. So, use dashboards, webhooks, and monitoring tools like Grafana or Datadog to quickly identify and resolve transaction issues occurring on your payment systems.
b) KPIs
Track your payment systems’ success rates, latency, and error rates to understand how well it is oiled. For example, you can track traffic spikes during peak hours to identify issues. Additionally, analyzing historical trends in transaction failures can help predict potential bottlenecks and optimize system performance.
6. Future-proofing payments
Future-ready payment technologies, such as blockchain-based settlements, AI-driven risk assessments, and real-time transaction processing, are revolutionizing the way payments are handled. By integrating these advancements, developers can ensure seamless, secure, and highly efficient payment experiences for users.
a) Emerging trends
The payment landscape is constantly evolving, with new innovations making transactions more seamless and accessible. Some of the latest trends include:
- UPI 2.0 & Beyond: The next iteration of the Unified Payments Interface (UPI) introduces features like overdraft accounts, invoice verification, and additional security measures to enhance transaction reliability.
- Voice-activated payments: AI-driven voice recognition technology enables users to complete transactions through voice commands, improving accessibility for differently-abled users and enhancing the convenience of contactless payments.
- Biometric authentication: Payments secured through fingerprint scanning, facial recognition, or iris scanning enhance security and reduce reliance on traditional passwords or PINs.
b) Advanced technologies
Leverage predictive analytics to identify potential payment failures and initiate preventive measures beforehand. For example, if a server has failed before on reaching a certain volume of traffic load, ML algorithms can predict its failure when traffic reaches that point and initiate a load balancing measure to redistribute the traffic.
ML-powered algorithms are also helpful in identifying fraudulent transactions by learning from genuine transaction patterns.
Conclusion
With a plethora of payment options available to customers today, businesses are competing to provide them with the best checkout experience possible. To truly pass the benefits on to customers, it is important to develop a payment system that is scalable, reliable, available, and secure.
Adopt these best practices to ensure your payment infrastructure is sound and trustworthy. You can also partner with Plural by Pine Labs to gain access to a world-class digital payment infrastructure that you can easily integrate with your systems. We offer a full-suite digital payment infrastructure, including gateways, payment options, links, tokenizers, fee collection, BBPS, and much more.
