Design Points-from-Transactions Service
Overview
This question evaluates system design and distributed-systems competency, focusing on transaction processing, idempotency and deduplication, monetary precision and rounding, consistency models, data modeling, and operational controls like observability and fraud prevention.
Design a Scalable Loyalty Points Service (USD → Points at 1 USD = 1.5 Points)
You are designing a service that awards loyalty points for purchase transactions denominated in USD at a fixed conversion rate of 1 USD = 1.5 points. The service must support awarding, querying balances, and redeeming points at scale, with correctness and auditability.
Assume transactions arrive from a card/payments platform and that points should be awarded only for posted/settled transactions (not authorizations). Redemption must prevent double-spend.
Cover the following:
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API Design
- Ingest transactions for awarding points
- Query balances
- Redeem points
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Idempotency and Deduplication
- How to ensure exactly-once awarding and idempotent client retries
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Precision and Rounding
- Units to store money and points, conversion math, rounding policy
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Consistency Model
- What is strong vs. eventual, and where to apply each
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Data Model and Schema
- Tables, keys, indices, constraints, and how balances are computed
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Prevention of Double Counting and Fraud
- Controls for duplicate events, replay, redemptions, and abuse
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Real-time and Batch Processing
- Streaming path for new transactions and batch backfills
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Backfill and Correction Flows
- Handling refunds, chargebacks, retroactive fixes, and rate changes
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Scaling and Partitioning Strategy
- Per-account ordering, sharding, and throughput considerations
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Observability
- Metrics, logs, tracing, and audits to ensure correctness and SLAs
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Rollout and Testing Plans
- Validation, shadowing, canaries, and guardrails
Solution
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