How to Design a Scalable Payment System to Improve Payments Infrastructure

Today, effectively managing a high volume of transactions is essential for any digital payment system.

It doesn’t matter if you’re running an online store, a subscription service, or a peer-to-peer payment app – being able to handle growing transaction numbers while maintaining first-rate performance is of top importance.

Scalability plays a key role in designing a payment system, ensuring it can easily adjust to meet user demands without sacrificing performance.

In this article, we’ll take a detailed look at the principles and best practices for building a scalable payment system that can easily grow with your business.

What Is a Scalability Attribute in Payment System Architecture?

In the context of software architecture, scalability refers to a system’s ability to manage a rising amount of work, data, or users without compromising productivity.

A scalable architecture allows a system to adjust and efficiently expand, meeting the demands of a growing user base or an extending workload.

The need for scalable infrastructure appears from the ever-changing nature of modern applications and services. As businesses grow, the number of transactions and users accessing the system can increase exponentially.

And without a scalable architecture, the system may struggle to keep up with the increasing load, as well as experience slow response times, errors, and even system failures.

There are two primary types of scalability:

• Vertical Scalability (Scaling Up): Involves adding more resources (CPU, RAM, storage) to an existing server or upgrading to more powerful hardware. This approach has limits and may be quite expensive in the long run. But it can provide a quick fix for systems experiencing short-term resource constraints.
• Horizontal Scalability (Scaling Out): Involves adding extra servers or nodes to the system by distributing the workload across multiple instances. This approach allows for near-linear scaling and is more cost-effective in the long term since you will pay for additional infrastructure resources only when needed.

Understanding the Basic Payment Workflow and Creating User Scenarios

Before diving into the technical aspects of scalability, it’s essential to understand the basic payment workflow.

The basic payment workflow involves a series of steps when a user initiates a payment transaction. They are user authentication, payment processing, transaction recording, and confirmation.

By identifying these steps, you can create user scenarios that imitate real-world interactions and provide a foundation for scalability testing.

Here’s how you can create user scenarios for the payment system. Let’s take successful payment as an example:

• User selects a product/service to purchase.
• User logs in or creates an account.
• User selects a payment method and enters valid payment details.
• User submits the payment request.
• System quickly ensures that the user account has enough funds to initiate a payment. More fast checks could be applied here – account limits, blacklist checks, etc.
• User receives information that the payment is now processed
• When the payment processor approves the transaction, the funds’ withdrawal is confirmed, user and merchant are notified about the payment status. This action is deferred in time because more time is needed for complex checks like fraud detection or communicating with a payment provider.

Setting up Non-Functional Requirements: DAU, Data Load, Latency

To design scalable payment solutions, it’s crucial to set up non-functional requirements.

These requirements define the system’s capabilities and performance features, essential for meeting user expectations and business objectives.

The three key non-functional requirements for a payment system are:

• Daily Active Users (DAU): Estimate the number of active users your system will handle regularly. This will help you determine the expected load on the system.
• Data Load: Understand the amount of data generated and processed by the payment system. This includes user profiles, transaction history, and other relevant information.
• Latency: Define acceptable response times for different operations within the system. Low latency is vital for a good user experience.

Analysis of Integrations with SLA Provided. Getting Information About Provider Limits

A payment system often relies on third-party integrations, such as payment gateways and external services.

Analyze the Service Level Agreements (SLAs) provided by these integrations to understand their performance guarantees and limitations.

This information will help you identify potential points of failure and develop workarounds to keep things running smoothly.

Here are some steps to help you perform this analysis:

1. Identify Integration Points: List third-party services used for payment processing.
2. Obtain SLAs from Providers: Gather service-level agreements from providers.
3. Evaluate Uptime and Reliability: Check provider uptime and reliability.
4. Assess Response Times: Analyze provider response time commitments.
5. Review Transaction Success Rate: Consider the success rate of transactions processed by providers.
6. Check for Scalability and Limits: Verify provider capacity for handling the increased workload.
7. Examine Security and Compliance: Ensure providers meet security and compliance standards.
8. Consider Support and Documentation: Evaluate provider support and API documentation.

Finding Potential Bottlenecks. Creating a Scalability Plan for Persistent Storages, Compute Instances

Identifying potential bottlenecks is a crucial step in designing scalable payment solutions. Bottlenecks can arise at various points in the system and can hinder overall performance. However, the most common areas to focus on include:

• Persistent Storages: Optimize database queries and consider database sharding or read replicas scalability to effectively distribute and serve data.
• Compute Instances: Implement auto-scaling mechanisms to dynamically adjust resources based on demand and provide efficient utilization of compute power.

Implementing Scalability for Hot Spots Using a Wide Selection of Tools

To address scalability for hot spots (areas experiencing high load) in your payment system, consider the following tools and techniques:

• Vertical vs. Horizontal Scaling: Understand the differences between scaling up (adding resources to existing servers) and scaling out (adding more servers) and choose the appropriate strategy.
• Service-Oriented and/or Microservice Architecture: Adopting a modular architecture allows you to scale individual components independently.
• Load Balancers: Implement load balancing techniques to evenly distribute incoming requests among multiple servers.
• Establishing Scaling Metrics: Define clear metrics to monitor the system’s performance and trigger scaling actions when necessary.
• Automatic Processing Units Scaling: Use auto-scaling to adjust the number of processing units based on demand.
• Serverless Pattern: Apply serverless computing for specific tasks to reduce operational overhead and improve scalability.
• Caching Strategies: Employ caching mechanisms to store frequently accessed data and reduce the load on databases.
• Database Replication: Set up database replication to ensure data availability and distribute read operations.
• Communication Between Services Using Queues and Message Brokers: Implement asynchronous communication patterns to decouple services and improve system resilience.
• API Gateway and CQRS Patterns: Use API gateways to manage requests and implement Command Query Responsibility Segregation (CQRS) for better performance and scalability.
• Application of Scalable CDN: Use Content Delivery Networks (CDNs) to efficiently cache and deliver static and dynamic assets, reducing server load.

Implementing a Lightweight API Payment Worker and Transaction Processing Service

To further enhance scalability, consider introducing a lightweight API payment worker and transaction processing service.

A lightweight API payment worker is a specialized component designed to offload resource-intensive payment-related tasks from the main application flow.

Instead of processing payment requests synchronously, where each payment action is handled in real-time, the worker processes tasks asynchronously.

This means that the main application can quickly acknowledge the payment request and continue its operation while the worker handles the complex payment processing in the background.

The transaction processing service, in turn, is responsible for validating and processing transactions to ensure they are completed accurately and securely.

Together, these components create a robust payment system capable of meeting growing demands in the digital landscape.

Conclusion

Designing a payment system with scalability in mind is a vital aspect of building a successful online platform or application.

By understanding the architecture’s scalability attributes, setting up non-functional requirements, and employing a wide selection of tools and patterns, you can build a payment system that can easily scale with your business needs.

But remember that scalability is a controlled process. Don’t forget to regularly monitor the system’s performance, conduct load testing, and continuously improve it for the best outcomes.

Are you ready to take your payment system to the next level? At SCAND, our expert team specializes in building scalable and secure payment solutions tailored to your unique business needs.

Whether you’re a startup or an established company, we have the experience and expertise to develop a payment system that can handle your growing demands.