Design a scalable payment processor
Overview
This question evaluates skills in large-scale distributed system design, secure payment processing, transactional consistency (idempotency and exactly-once semantics), regulatory compliance (PCI/PSD2/GDPR), data modeling for ledgers and audit logs, integration with external networks, and operational concerns like scalability, resilience, and observability. It is commonly asked because interviewers need to assess architectural trade-offs, fault-tolerance and orchestration for multi-step money flows, reconciliation and settlement logic; the category is System Design and the level of abstraction spans both high-level conceptual architecture and detailed practical application.
System Design: Online Payment Processing Platform
Scenario
Design a multi-tenant online payment processing platform that lets merchants accept card and digital wallet payments globally. Assume a mix of e-commerce (card-not-present) use cases and support for regional regulations (e.g., PSD2/SCA in the EU). Merchants integrate via REST APIs and webhooks.
Functional Requirements
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Payments API
- Authorize, capture (partial/multiple), refund (partial/multiple), void/cancel.
- Idempotency keys and exactly-once charge semantics from the merchant’s perspective.
- Tokenization for cards and wallet payment methods; avoid storing PAN in merchant systems.
- Webhooks for state changes (authorized, captured, refunded, chargeback, payout).
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End-to-end processing
- Flow across gateway, acquirer, card networks, and issuers.
- 3DS/SCA support (frictionless and challenge flows), risk scoring, velocity controls, optional ML risk.
- PCI scope boundaries and tokenization strategy.
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Data and accounting
- Data model for transactions, ledger entries, settlements, chargebacks, payouts, and immutable audit logs.
- Consistency model, deduplication, retries, and orchestration (outbox/SAGA) for multi-step workflows.
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Money movement and operations
- Settlement/clearing with acquirers, currency conversion, fees, and scheduled payouts.
- Reconciliation against acquirer/network files and dispute handling.
Non-Functional Requirements
- Scalability: thousands of TPS at peak; p99 latency < 200 ms for authorize (excluding 3DS challenges).
- Resilience: backpressure, queueing, retries with idempotency.
- Availability: multi-region active-active. State your RPO/RTO objectives and data replication approach.
- Observability: metrics, tracing, log correlation. Secure access control, PII/GDPR handling, key management.
- Testing: strategy for unit/integration/load; simulators/mocks for external partners; handling timeouts/partial failures.
Deliverables
Provide a detailed design covering:
- API design and exactly-once semantics.
- End-to-end processing flows, tokenization, and PCI boundaries.
- Risk/fraud controls and 3DS/SCA.
- Data model and storage approach, including ledgers and audit logs.
- Consistency, deduplication, orchestration (outbox/SAGA).
- Settlement, reconciliation, currency conversion, fees, payouts.
- Scalability, backpressure, HA/DR.
- Observability, security, privacy, and key management.
- Testing and failure-handling strategies.
Solution
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