Building an On-Demand Infrastructure for Payment Processing

The global digital payment market is thriving, reaching $81.3 billion in 2022 and projected to grow at a CAGR of 20.8% from 2023 to 2030. When combined with on-demand infrastructure, its potential grows manifold. But what does an exhaustive on-demand infrastructure for a payment company consist of?

Here are the key components of on-demand payment infrastructure:

1. Payment Gateway
   Payment gateways play a pivotal role in bolstering security by using encryption to protect sensitive payment data. They serve as a crucial aspect of on-demand payment processing services, ensuring that payment information is transmitted securely to the payment processor. Without these gateways, online threats could potentially compromise the integrity of payment transactions.
2. Cloud Infrastructure
   Cloud infrastructure provides an effective solution to address the challenges posed by fluctuating transaction volumes. Payment companies can seamlessly adapt to varying levels of transaction activity, thanks to the scalability of cloud resources. Furthermore, this approach offers significant cost-saving advantages by eliminating the necessity for physical servers and datacenters. These benefits are expected to drive phenomenal growth in the global cloud computing market size, from an estimated $569.31 billion in 2022 to $2,432.87 billion by 2030.
3. Application Programming Interfaces (APIs)
   APIs serve as the architectural foundation for constructing software applications, facilitating communication between different software components. Payment companies leverage APIs to enhance their applications by integrating third-party services and functionalities. This integration enables companies to expand their service offerings and meet the diverse needs of their customers. APIs are versatile tools that facilitate the creation of innovative solutions and enhance the overall user experience.
4. Fraud Detection and Prevention
   With the rising use of digital platforms for payment processing, cybercrimes and fraud have risen. Effective fraud detection and prevention strategies are crucial to safeguard both the company and its customers. The key elements include:

• Real-time monitoring systems: These systems scrutinize each transaction as it occurs, enabling the immediate identification of any fraudulent activities.
• Machine learning for pattern recognition: Machine learning algorithms analyze large datasets to identify patterns and identify anomalies, continuously improving their accuracy over time.
• Multi-factor authentication: Requiring users to provide multiple forms of identification enhances security by adding layers of verification.
• Transaction compartmentalization and risk scoring: Segmenting transactions based on factors such as location and transaction amount allows for risk assessment and the assignment of risk scores.

Fraud analytics for employee training: Transaction data can be harnessed for in-depth analysis and reporting. These insights are invaluable for training employees who are at the forefront of combating online fraud and cybercrimes.

1.  Compliance and Security
   The banking and financial sector, whether in its brick-and-mortar form or the digitalized version, is subjected to stringent compliance and regulations, as the people’s interest is at hand. Failure to comply could result in massive legal and financial penalties, as well as harm to reputation. Some of the significant guidelines that a payment company must follow are:

   Payment Card Industry Data Security Standard (PCI DSS)

• General Data Protection Regulation (GDPR)
• Anti-Money Laundering (AML) regulations
• Electronic Fund Transfer Act (EFTA)
• Cybersecurity Information Sharing Act (CISA)