Designing a Reliable and Scalable Payment System

Learn how to design a reliable and scalable payment system using Apache Kafka and asynchronous communication.

00:00:00 This video explains the process of implementing a reliable and scalable payment system, including the role of payment gateways and payment service providers. It also discusses the options of using a PSP like Stripe or PayPal versus connecting directly to banks or card schemes.

šŸ’° E-commerce has grown rapidly, requiring reliable and scalable payment systems.

šŸ’³ Payment systems involve multiple parties, including payment gateways, acquiring banks, and customer banks.

šŸŒ There are two common ways to build a payment system: using a payment service provider (PSP) or connecting directly to banks.

00:04:37 This video discusses the design of a payment system, focusing on technical concepts and handling large throughput. The system should generate a payment event, store it in a database, call an external PSP for payment processing, update the wallet and ledger, and have synchronous or asynchronous communication.

šŸ’³ The payment system doesn't store card data and relies on a payment service provider (PSP) for processing transactions.

šŸ” Transaction failures and inconsistencies require reconciliation in the system.

šŸš€ Building a reliable payment system requires considering technical concepts and handling large throughput of payment requests.

šŸ›’ The core features of an online store payment system include generating payment events, storing payment details, and coordinating with a PSP for card processing.

šŸ¦ The payment service updates the merchant's wallet and ledger to track account balances and financial transactions.

šŸ”„ Communication between internal and external services can be synchronous or asynchronous.

00:09:12 The video explains the challenges of designing a payment system and suggests using asynchronous communication, such as Apache Kafka, to handle failures and traffic spikes. It emphasizes the importance of avoiding strong dependencies between services.

šŸ’” The design of a payment system needs to account for potential failures and communication issues.

šŸ’” Synchronous communication is not suitable for most cases and asynchronous communication is preferred.

šŸ’” Asynchronous communication, using persistent queues like Kafka, helps handle uneven traffic and prevents service overload.

šŸ’” Implementing a reliable payment system involves addressing system failures, poison pill errors, and functional bugs.

šŸ’” Using messaging queues like Apache Kafka can ensure transaction completion and mitigate the challenges of a payment system.

00:13:47 Learn how to design a payment system using Kafka for message queueing, retry strategies, exponential backoff, and timeouts to ensure successful and efficient payment operations.

šŸ’” Kafka is used to persist communication messages and ensure their delivery to other services.

šŸ”„ Retry strategies are important for handling network issues and ensuring successful payment requests.

ā° Timeouts are implemented to avoid indefinite waiting for a response.

00:18:24 A system design interview about designing a payment system. Covers handling failed orders, setting timeouts, using fallback values, dealing with incompatible messages, and retrying operations safely.

šŸ” When an order fails, it is important to determine the status of the payment and communicate it to the customer to avoid confusion.

šŸ’” Timeouts should be set high enough to allow slower responses but also low enough to avoid waiting indefinitely.

šŸš« Fallback mechanisms can be implemented to handle failures in dependent services and ensure uninterrupted payment processing.

šŸ’„ Incompatible messages, known as poison pill errors, can be saved for later debugging or discarded using a dead letter queue.

ā³ In cases where a service is down, failed transactions can be stored in a persistent queue and processed once the service recovers.

ā™»ļø Hidden potency can be utilized to safely retry payment operations without charging the customer twice.

00:22:59 This YouTube video discusses designing a payment system by using a hidden potency key to avoid double payments. It also explains the benefits of a distributed system and the importance of data encryption.

šŸ’³ To avoid double payments in a payment system, a unique key called a hidden potent key is used.

šŸ”‘ Hidden potent keys, often generated as UUIDs, are added to the HTTP header and serve as the ID of the payment order.

šŸŒ In a distributed payment system, data replication and workload distribution improve reliability and scalability.

šŸ”’ Encryption is crucial to protect data at rest and during transmission in a payment system.

00:27:37 Learn about designing a secure payment system, including encryption, access control, software updates, data backup, and password security. Ensure data integrity with monitoring techniques. Increase reliability and fault tolerance with redundancy, Kafka, retry strategies, and message handling.

šŸ”’ TLS and HTTPS can protect data transmitted over a network.

šŸ” Access control and two-factor authentication verify user identity and restrict data access.

šŸ’¾ Regularly updating software and backing up data helps prevent vulnerability exploitation and data loss.

šŸ”‘ Using long and complex passwords can enhance security against password cracking.

šŸ” Monitoring data integrity allows detection of changes and malware.

āœ… Reliability and fault tolerance are important for a payment system.

Summary of a video "Design a Payment System - System Design Interview" by High-Performance Programming on YouTube.

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