In today's landscape, payment processing systems are critical data-driven operations that demand the utmost speed and reliability in their underlying software systems.
Payment processing systems enable businesses to accept payments through credit cards, debit cards, checks, and digital wallets. These systems verify transaction details and then transmit the data for financial processing. The payment company conducts anti-fraud checks before finalizing the transaction, all of which must occur before clearance, even while the customer waits.
Operating globally around the clock with stringent SLAs demands stability and automatic recovery. Each step in the payment pipeline requires minimal latency. Hazelcast Platform is an ideal solution, offering consistently low end-to-end processing latencies. It merges high-performance stream processing, rapid data storage/access, and messaging in a unified architecture within a single cluster. This approach simplifies development and deployment, reduces risk and cost by minimizing components, and scales up performance efficiently.
Card Payment Use Case
There are many instances within a payment processing software architecture where low-latency and instant processing of streaming data can help to meet or exceed SLAs.
Hazelcast Platform has been deployed in every component in the card payment processing ecosystem.
Payment Processors and Gateways
Payment processors are the first point of contact for most merchants in the card payment lifecycle, and gateways are the channels for secure data transmission. Firms often handle both functions for merchants. Processors and gateways use Hazelcast Platform for:
Acquiring banks (or simply “acquirers”) manage bank accounts on behalf of the merchants to collect money from purchase transactions. Acquirers use Hazelcast for:
Transaction monitoring
Advanced anti-fraud protection
Business intelligence services
Credit Card Networks
Credit card networks are the overall coordinators of purchase transactions of their brand of credit cards. They work with all stakeholders to make sure funds are properly passed from the consumer to the merchant. Credit card networks use Hazelcast for:
Authentication and fraud detection
Payment messaging
Issuing Banks
Issuing banks are the consumer-facing firms that manage accounts on behalf of credit card holders. They are responsible for delivering money to the acquirers through the credit card networks. Issuing banks use Hazelcast for:
Hazelcast Platform provides a robust foundation for your payment processing architecture, especially in the payment hub services component, offering speed, scalability, resilience, and security. It empowers the following components:
Payment Hub
The payment hub is responsible for three primary decisions:
Authentication. Payment authentication entails checking details of the transaction to ensure valid data was provided. Hazelcast Platform can quickly check rules to authenticate the transaction.
Fraud detection. Fraud detection entails checking against a large set of rules, or even a machine learning model, to make a prediction on whether the transaction is fraudulent or not.
The Hazelcast speed advantage lets you create a competitive advantage by running more complex algorithms simultaneously within your stringent SLAs. This lets you more effectively reduce the risk of fraud while minimizing the likelihood of false positives.
Network selection. For network selection, the payment hub identifies the most cost-effective network choice for a given SLA time. Hazelcast Platform can determine this at near real-time speeds based on information and rules stored in-memory.
Gateway
The payment gateway is a set of connectors to different networks. It understands the varied protocols and data formats across existing networks. Hazelcast provides a connector API for creating customer interfaces to deliver transactions to the broad range of networks that are available today.
Operational Data Store
The operational data store (ODS) stores all the information necessary to authorize and deliver transactions. This includes cardholder information, fraud detection model data, historical transaction history, payment gateway information, etc. Hazelcast platform stores all of this in-memory to enable the highest throughput of transactions with the lowest latency.
Instant Payments Use Case
Hazelcast Platform is used to speed up instant payment transactions, which are often plagued by cross-border incompatibilities. Interfaces tend to add bloat that slows down the transactions, and our platform provides in-memory data access speeds to make payments truly instant.
The complexity of cross-border transactions represents the next major challenge for instant payments.
Hazelcast Platform can accelerate the various components in an instant payment lifecycle.
Consumer Transactions
Banks can leverage Hazelcast for various facets of payment transaction processing. Offering in-memory speed, real-time stream processing, scalability, resilience, and security, Hazelcast enables banks to implement systems that accelerate transactions while preserving their core banking infrastructure.
Bank Activities
Hazelcast Platform serves as a solution for banks to manage diverse dimensions of payment transaction processing. With its in-memory velocity, real-time stream processing, scalability, resilience, and security, banks can establish systems that enhance transaction swiftness while upholding their foundational banking infrastructure.
Cross-Border Payments
As countries are looking to expand their instant payment ecosystems to include fast payments to international payees, payment network providers are providing the integration points to simplify the connectivity between countries. The use of in-memory and stream processing capabilities in Hazelcast Platform can boost throughput and reduce latency to keep up with the load and the immediacy demands in today’s digital world.
Business Requirements
Payment processing systems rely on the common requirements of high performance systems.
High throughput (e.g., capacity to process many thousands of payments per second) to process as many payments as possible without having to make a huge hardware/infrastructure investment
Extremely low latency (e.g., < 50 ms processing time) to meet the tight service-level agreements (SLAs) that consumers and businesses demand today
Scalability not only to grow as the business expands, but also to elastically scale as workloads vary throughout the year, enabling businesses to only deploy the hardware resources that are required for a given workload
Security to protect sensitive financial information from eavesdropping, and also to prevent tampering of transactions that could result in lost funds
Extensibility in a future-proof architecture to enable new add-on capabilities while reducing infrastructure complexity as much as possible
Maintaining a low total cost of ownership for IT resources
Technical Challenges
The technical challenges of payment processing systems are based on the high performance and reliability expectations of delivering financial data across banks, including those listed below.
The extreme complexity of coordinating many distinct components in a payment processing ecosystem. Hazelcast provides a unified real-time data platform that combines multiple functions in a single platform to help reduce complexity in any large-scale, data-intensive environment.
Maintaining a high throughput system that regularly shows spikes and dips in traffic, so efficiently adjusting to those varying workloads requires elastic scalability. Hazelcast Platform leverages a distributed architecture that can scale out or in depending on the given workload to only consume resources that are needed.
Extremely low latency requires systems that are built with optimizations to respond as fast as possible. Hazelcast Platform’s stream processing capabilities and fast data store were built for ultra-low latency use cases. This makes our platform an ideal technology for building the core of a payment processing system.
Scalability challenges on legacy systems that were built with a monolithic architecture in mind. Hazelcast provides a distributed, cloud-native architecture that can scale to meet changing workload requirements.
Enforcing security controls without compromising on performance. Hazelcast Platform includes security controls that were tested for optimal performance so you can get the outputs you need while protecting your sensitive data.
Many different issues contribute to increased costs in payment processing. Hazelcast provides a highly efficient platform that helps reduce costs by reducing the number of distinct components, by providing greater resource utilization in a cluster, and by simplifying the development and deployment effort with a simplified architecture.
Payment systems require many different components which create significant complexity, so any technology that can help reduce complexity will be a useful part of the payment processing ecosystem.
Why Hazelcast
Hazelcast is at the foundation of some of the biggest payment processing systems in the world. Our customers turn to us to get the speed at scale, security, and reliability they need to run a successful operation. Hazelcast platform is a unified real-time data platform that uniquely combines a distributed, fast data store with a high-speed stream processing engine, to run the fastest applications in any type of data-intensive environment. Consider some of the technology advantages listed below that let Hazelcast customers run highly successful payment processing solutions.
Easy to Develop and Deploy
Hazelcast Platform was designed to simplify the application development process by providing a familiar API that abstracts away the complexity of running a distributed application across multiple nodes in a cluster. This allows developers to spend more time on business logic and not on writing custom integration and orchestration code. Our platform can seamlessly integrate with your IT architecture to add new capabilities without having to rip and replace your existing stack. The Hazelcast cloud-native architecture requires no special coding expertise to get the elasticity to scale up or down to meet highly fluctuating workload demands.
Performance at Scale
Whether you process a large volume of transactions, enhance online experiences with faster responsiveness, run large-scale transformations on data, or cut costs with a mainframe integration deployment, Hazelcast Platform is designed for the ultra-performance that today’s banking workloads require. The proven performance advantage is especially valuable for data-focused experimentation that enables ongoing business optimization, especially in data science initiatives including machine learning inference for fraud detection.
Mission-Critical Reliability
With built-in redundancy to protect against node failures, and efficient WAN Replication to support disaster recovery strategies that safeguard against total site failures, Hazelcast Platform was built to provide the resilience to run mission-critical systems. The extensive built-in security framework protects data from unauthorized viewers, and security APIs allow custom security controls for sensitive environments.
Customer Success Story
A global bank aimed to expand their online payments business but faced limitations with their existing solution's inflexibility. Their architecture couldn't scale for larger customers, hindering potential returns on investments.
Legacy code was hard to extend, causing delays in adding features or entering new markets—monolithic application releases took six months. With SLAs requiring 10,000+ transactions/sec and millisecond latency, they needed a platform tailored to these needs.
Hardware upgrades seemed insufficient given the software architecture. Hazelcast enabled the fast payment system's initial deployment, processing 14,000 transactions/sec with <20ms latency. This met requirements, while the application can scale to 100,000 transactions/sec for future growth.
Hazelcast Platform's in-cluster backups and WAN Replication feature ensure 24/7 real-time payment reliability. The fast payments solution won The Banker's "Innovation in Digital Banking Award" for the payments category in 2020. (The Banker has been a banking industry economic and financial reporting source since 1926.)
