Billions of mobile devices around the world can now initiate payments. But can the supporting IT infrastructure keep up with the growing pressure to process them?
We saw over the 2019 holidays that spending was up several percentage points over 2018. That means that the number of digital payments processed across networks around the world also rose dramatically. And we can all expect the volume of payments to continue to grow.
Credit and debit cards are the dominant methods of retail payment, but cash and checks aren’t the only other options. The use of new payment tools such as mobile wallets—including Google Pay, Apple Pay, and Samsung Pay—is growing rapidly. What was once a novelty was now being used at almost every store I visited from Thanksgiving to New Year’s. These one-tap money transfer mechanisms give consumers easier ways to make secure payments. And consumers love the convenience. It’s almost like having your bank in your pocket.
But the rapid rise in these innovative payment technologies puts pressure on the supporting IT infrastructure. Decades ago, when digital payment processing was new, transactions originated from a relatively small number of point-of-sale terminals in stores and the offices of service providers. These transactions traversed payment hubs and payment networks created by business-to-business, bank-to-bank, and credit card operators.
Higher Demand, Slower Response
Now billions of mobile devices around the world can initiate payments. Think about how many purchases you’ve made from your smartphone or tablet in the last year alone. This shift has geometrically expanded the volume of transactions and the reach of payment processing networks. In addition to cards and mobile wallets, new person-to-person networks such as Zell and Venmo are contributing to the huge and growing scale of payment processing.
Purchasing methods are not the only things that have changed. Consumer expectations are higher than ever. Real-time processing is considered standard, and most shoppers are frustrated by any delays in the time it takes to complete a transaction. The network is slow in responding? The card is declined? The average consumer responds by pulling out another card or using another payment method—causing the bank or card-holding institution to lose that transaction fee.
Then there’s the issue of fraud detection and prevention. More mobile transactions and payment methods means more fraud attempts. Consumers expect to be protected from fraud, but businesses must walk a fine line. More comprehensive fraud checks take longer to process but are more accurate. Simpler fraud algorithms are faster, but tend to return more false positives. Delayed by a fraud accusation from one payment method, most consumers will switch to another. Again, the bank misses out on that transaction fee.
The payments infrastructure is not always ready for these new realities. Networks built using legacy computer systems often struggle to keep up with time-sensitive, high-volume data flows. Lacking adequate edge processing capabilities to support mobile transactions, networks push all of the data to the data center. More data over clogged pipelines is a sure recipe for a traffic nightmare.
In-the-Moment Processing
To address these multifaceted issues, companies are beginning to investigate modern payment processing technologies. When I talk to customers, they consistently ask for solutions that meet four main requirements:
- Speed that supports low latency under even the heaviest workloads, with no noticeable delays
- Scalability that can handle growing, always-on, high-streaming workloads and uses a parallel, distributed computing core to scale
- Stability enabled by an integrated solution that incorporates robust business continuity capabilities
- Security that allows businesses to protect their data from breaches
That’s where the Hazelcast in-memory computing platform can help.
Hazelcast can be the core technology for a payment hub that handles authentication, fraud detection, and network selection. This can connect to a payment gateway which includes a set of connectors to different networks—as well as a connector API for creating interfaces to additional networks, today or in the future.
Hazelcast IMDG can act as the operational data store where all of the information needed to authorize and deliver transactions resides. Because the data is stored in-memory, the solution enables high transactional throughput with the lowest latency. Hazelcast in-memory solutions are also designed to work with existing IT infrastructures, which helps companies breathe new life into their legacy IT systems.
Together, these features offer in-the-moment processing that modernizes payment processing. Because our solution combines data processing and messaging in a single solution, it offers the ideal technology for today’s payment processing systems.
Hazelcast solutions have been used by many financial services and technology companies to modernize their payment processing systems. With the ability to process tens of thousands of payments per second across multiple payment types, devices, and networks, the technology is exactly what’s needed to meet the needs of customers, merchants, and payment processors. To learn more about today’s payment processing challenges and how Hazelcast technology can help, read our special report, Real-Time Payment Processing and Fraud Detection for the Mobile Age.
