Given its ability to fuel innovation through flexible resource distribution and scalable systems, the cloud will be the future of payments. In this article, we’ll discuss the benefits of migrating payment solutions to the cloud, as well as potential pitfalls to watch out for and best practices to observe.
Benefits of the cloud-native approach to payment orchestration
Here are a few reasons why moving payment orchestration to the cloud is ideal:
1. Resilience and scalability
Record payment volumes are commonplace for businesses. Unfortunately, profits are drastically reduced as the existing payment infrastructure is plagued by government regulation and falling fees due to market competition.
Fortunately, cloud-native payments can scale as needed to meet changing volumes and provide the capacity for growth. In addition, some systems can detect anomalies and automatically apply corrective measures to keep critical business services running.
Cloudifying payments is a critical way to ensure your business is agile enough to meet future competition. It is also the single most important factor that motivates companies to migrate to the cloud so that they can easily transform and meet the changing needs of their customers.
3. Comply with new standards
To operate, payment companies must comply with the laws of the market by adopting the latest compliance standards, such as PSD2 and ISO 20022. The problem is that these rules are constantly changing, which can mean that companies with legacy technologies can struggle to catch up.
But with cloud integrations in place, businesses that process large amounts of payments can implement new updates more quickly or run multiple releases that allow them to quickly switch between them. This mitigates unnecessary wasteful delays.
4. Unleash productivity
Modernized payment infrastructures are full of tools that can help organizations better meet the needs of their customers. For example, automation tools can help teams spend time on important activities instead of managing repetitive tasks.
Additionally, during the process of modernizing to the cloud, a bridge between new and old technology can be established. This allows merchants and financial institutions to start enjoying the fruits of their new resource engine before its official launch.
5. No hardware costs or additional expenses
It is relatively inexpensive and much easier to migrate payment systems to the cloud compared to acquiring and configuring hardware units.
6. Rapid adoption of new messaging formats and standards
Payment processors need to link and integrate many messaging formats both inside and outside the organization. The problem is that doing this on a traditional tech stack takes an awful lot of time. Ultimately, longer transaction times will drive customers away.
Surprisingly, when merchants or fintech companies move to cloud-based integrations, they have the ability to work with multiple messaging formats and standards. These can be created and deployed easily via point-and-click browser-based tools and predefined delivery channels, making the transformation process fast and effortless.
In short, the cloud allows payment providers to initiate multiple routes, connections, and transformations in any ecosystem using predefined templates. Team members don’t need to focus on onboarding, but rather on other important things that move the needle. The result is satisfied customers and a profitable business.
7. Countering ever-increasing financial crimes
Worldwide, financial institutions face the highest number of data breach fines. If this happens multiple times, a business could find itself in extremely murky waters.
The truth is that when businesses process large transactions in real time, cybercriminals can easily step in undetected. Fortunately, cloud platforms now allow companies to deploy artificial intelligence and machine learning algorithms that detect illicit payment activity. This can help your business stay within compliance regulations.
Apart from the existence of AI and ML for better security, merchants also have the freedom to store data in a public, private or hybrid cloud. Large organizations are turning more to hybrid environments so that their data can be kept private and transferred to the public when the demand for scalability arises.
Things to keep in mind when building a cloud-based payment infrastructure
Potential for system anomalies and variations
The transformation of a payment technology is not without obstacles. Anomalies are likely to appear if there is no active debugging system. This could lead to costly problems for customers.
Therefore, it is essential to place multiple service listeners and automated monitoring tools that continuously analyze anomalies and variations. When a bug, broken link or other issue is detected, a notification alert will be sent to the designated team for immediate response.
TDD (test driven development)
You should run TDD during development and deployment to ensure the software is high quality and bug free. This is implemented at checkpoints where new releases pass or at points where frequent client updates are adopted.
TTD must strictly adhere to the requirements of coding design and implementation. In the design phase, the code must stick to the requirements of the business and therefore be open to future developments.
As for the coding implementation, the application code must be testable from the start so that defects can be eliminated before the final version. Don’t forget about automated testing – it’s a good idea to reduce frequent human intervention.
Prioritize the DevSecOps approach
An effective risk management plan when changing payment technology should include DevSecOps. It is one of the best security practices and protects businesses from potential hacking incidents. Best of all, the costs of automating security checks and urgent bug fixes will be significantly lower.
Other challenges your IT department may face along the way, from DataArt’s experience
- Data-centric regulatory compliance and privacy concerns
In some countries, there are rules that prevent payment companies and processors from cracking their monolithic stacks. These measures are in place to protect the data of their citizens. As a result, many merchants will find it very difficult to distribute their means of payment in different regions. One possible way to meet the challenge is to have a hybrid setup, using Kubernetes both on-premises and in the cloud.
- Running multi-region apps can be risky
Companies operating a multi-regional infrastructure should expect to deal with different region-specific services. Notwithstanding, suppliers may also differ. Under such circumstances, the existing technology stack must display two key qualities: scalability and seamless integration. That’s why you need to think in advance about the level of abstraction of the application’s architecture and logic to make it fault-tolerant and with low latency for geographically dispersed users.
- Security restrictions sometimes impact the development process
Not all tools will be acceptable when it comes to designing your infrastructure with security restrictions in mind. It’s something you wouldn’t expect, but you might discover in the middle of the development process. CI/CD tools are a good example. Some of them (including those from Google) do not support private clusters.
When DataArt had a situation like this, the only way forward was to create another tool that didn’t compromise security.
- The pitfalls of integration during growth
As the business grows, the number of integrations with service providers and partners increases. This challenges the infrastructure and the development process. In one of the projects where the DataArt team migrated payment systems to the cloud, integrations were hampered during the testing phase because not all integrated systems had test instances or development. So the DataArt team built some good mock services to emulate them on the lower and local environments.
Moving to the cloud can improve scalability and provide opportunities to create a self-updating cloud-based vault, artificial intelligence, and edge computing that keeps transactions compliant with local regulations. Companies that adapt now will stay ahead of the competition and look to the future with their heads held high.