Real-Time Payments Infrastructure: Challenges and Cloud-Native Solutions

Authors: Prashant Singh

DOI: https://doi.org/10.37082/IJIRMPS.v8.i5.232559

Short DOI: https://doi.org/g9q394

Country: USA

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Abstract: The banking sector is experiencing a paradigm shift with the worldwide rise in demand for real-time payments (RTP). The idea of instant transfer of funds and immediate settlement between financial systems and payment networks has transformed from a value-added feature to an industry norm. Customers and enterprises alike expect funds to be immediately accessible, a need that traditional banking infrastructures are finding it difficult to meet. This paper delves into infrastructural hurdles and possibilities around real-time payments and how cloud-native solutions are a critical element towards facilitating scalable, secure, and resilient functioning of RTP systems. Traditional banking and financial infrastructures were designed with payment processing on a batched basis and functioning windows across hours or days. In contrast, RTP systems demand near-zero latency, round-the-clock availability, and robust fraud prevention mechanisms, all of which place unprecedented stress on existing architectures. The limitations of legacy systems including rigid core banking structures, lack of elasticity, and manual intervention-heavy workflows have created significant barriers to the wide-scale adoption of real-time payment technologies. The use of cloud-native models, which exhibit microservices design, containerization, continuous deployment and continuous integration (CI/CD), and orchestration systems like Kubernetes, presents promising dimensions to counter such challenges. With the decoupling of services, cloud-native platforms enable horizontal scalability and operation flexibility, important to address dynamic transaction volumes in contemporary payment platforms. Additionally, cloud-native offerings provide automated monitoring, real-time anomaly detection, and predictive maintenance features that further bolster security and system availability. Artificial intelligence combined with cloud-native technologies also enables new levels of predictive fraud detection and risk mitigation, which become increasingly vital in a world of instantaneous financial value transfer. This paper systematically examines the existing situation of real-time payment infrastructure, determines the key technological and regulatory issues, and assesses the potential of cloud-native solutions in addressing them. The research also synthesizes latest research outcomes, industry studies, and case studies of international payment operators and banking organizations that have effectively made a shift towards cloud-based RTP systems. In the process, this study not only emphasizes the operational and strategic advantages of cloud-native technologies but also offers practical suggestions to banks and fintech companies considering their migration process. The conclusions highlight that although the migration to cloud-native infrastructures necessitates a big change in operational mindset and investment in new skill sets, the long-term benefits in terms of scalability, security, regulatory compliance, and customer satisfaction are well worth the cost and risk. Finally, the adoption of cloud-native approaches is the most promising route towards neutralizing the native restrictions of traditional payment infrastructures and capturing the true value of real-time payments as a mass market universal financial service.

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Paper Id: 232559

Published On: 2020-09-03

Published In: Volume 8, Issue 5, September-October 2020

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