Payment Solution Architectures For The Post-Pandemic World

The surge in electronic transaction volumes in 2020 was driven by the switch to contactless card payments and the increase in e-commerce, triggered by the behavioural changes of consumers faced with the COVID19 landscape.  Sudden, unpredicted increases in transaction volumes frequently cause problems in the payments infrastructure.  The perceived stability of payments systems is often based on the tendency to limit change.  When change can’t be resisted, as we saw in 2020, the ability of the payments infrastructure to flex and adapt is often found to be limited.  

The root cause of the lack of flexibility, and the source of the change risk is the ageing architecture of many of the 3rd party product solutions used to  construct these infrastructures.   Design patterns from the 1980s and 1990s are usually monolithic and their change approaches are coding-centric.

These architectural features don’t cope with the world of rapid change.  Looking forward to 2021, as organisations try to recover from the COVID19-inspired recession, new business models for retail payments will emerge.  

Already, the convergence of retail channels is driving a need for omni-channel platforms for processing retail transactions - an omni-channel platform is better positioned to cope when transaction volumes rapidly move from one channel to another (for example from retail POS to e-commerce).

Partnering between financial institutions, retailers and loyalty schemes to offer additional value-added services for consumers will result in more complex transaction paths for retail payments, when multiple entities must be consulted in realtime.

The organisations that exploit these new opportunities will be those that can rapidly and safely deploy new transaction processing solutions with minimal code change in environments that reduce the risk of change. Low-code solutions that can add new transaction participants to the payments chain without requiring extensive coding or modification of existing transaction paths will lead the way.