Distributed architecture: how can it benefit your payment system?

A distributed system architecture is broadly implemented in payment systems and has many successful cases like Stripe and Netflix. Many people interested in building a successful payment gateway want to implement a distributed system but want to understand whether it will be beneficial, particularly for their business. So, this article is your short guide to distributed systems.

Table of contents:

1. What is distributed system?
2. Key Components of a Distributed System
3. Why use distributed system architecture for payment systems?
4. Best practices for building a large-scale distributed system
5. Summing up

What is distributed system?

A distributed system, also known as distributed computing or distributed databases, is basically multiple software components in different computers that run as a single system to achieve a common goal. There is no requirement for the location of such computers:

• they can be placed physically close to each other  and connected by a local network;
• they can be placed in the distance and connected by a wide area network.

The central concept of distributed architecture consists of the ability of such a system efficiently process data simultaneously through multiple processors, using different levels of openness to the software. Simply, It uses separate nodes to communicate and sync to a shared network. Such nodes usually represent individual physical hardware devices, but under different circumstances, and in some cases, they can represent other recursive encapsulated systems as well.

To better understand this complex system, look at the picture below, which perfectly illustrates the structure of distributed system architecture.

To understand this process better and know how it can be beneficial for payment systems and payment gateways, let's look at the main characteristics of distributed databases:

• Resource Sharing – the resources such as hardware, software, or data can be directly or remotely accessed across multiple computer systems.
• Simultaneous processing – many computers can process the same function simultaneously, which simplifies many processes.
• The openness of the extensions and improvements of distributed systems.
• Transparency simply means that the node can communicate with other nodes in the system. There are many types of things referred to as transparency: replication, access, location, concurrency, etc.
• Fault Tolerance – it is essential to understand that any system can fail, but the goal should always be to build it so that the system is always available even after something has failed.
• Error detection – many failures can be easily detected and prevented.
• Concurrency – multiple activities are executed at the same time. It allows for a reduction in latency and increases the throughput of the distributed system.
• Scalability – the distributed system handles the growth as the number of users for the system increases. Usually, scaling the system is performed by adding more computers to the network so that components do not need to be changed during this process.

Key Components of a Distributed System

Before we know how a distributed system can be beneficial for payment systems and payment gateway, let’s get familiar with the key components of a distributed system. There are three basic components of a distributed system:

• primary system controller;
• system data store;
• database.

And there are some optional components for a non-clustered environment:

• user interfaces;
• secondary controllers.

Primary system controller

The primary system controller keeps track of everything in your system, even dispatching and managing server requests. Here, executive and mailbox services that allow your system to function well are installed automatically on the primary system controller. Also, for non-clustered environments, there are some optional components like user interface and secondary controllers.

Secondary controller

The primary system controller keeps track of everything in your system, even dispatching and managing server requests. Here, executive and mailbox services that allow your system to function well are installed automatically on the primary system controller. Also, for non-clustered environments, some optional components like user interface and secondary controllers exist.

User-interface client

The user interface client is an extra element in distributed computing systems. The key role of this element is to provide the users with important system information. This component is a part of the non-clustered environment and does not operate on the same machines as the controller. Generally, it provides the functions necessary to monitor and control the whole system.

Database

In a distributed database system, the database stores all the relevant data and allows multiple users to use the same information simultaneously. This process works by the following principle: the datastore locates the data and then shares it among multiple users. Relational databases can be found in all data systems.

System datastore

The datastore is a crucial component of the distributed system as it persistently stores data collections, such as a database, a file system, or a directory. The information is usually stored on the disk vault when clustered or non-clustered. For example, in non-clustered systems, the data can be stored on one machine or distributed through several computers, but all of these devices must have access to this datastore to work correctly.

Why should you use distributed system architecture for payment systems?

The distributed system architecture has represented itself as a beneficial tool for payment systems. Here you can see the list of advantages it can bring you:

Reliability

Distributed systems are incredibly reliable as data replication, and backup practices are ingrained in them. As you understand, reliability is one of the most important aspects of payment gateways as you will process your users' sensitive data. If you want to know more about implementing security features in your payment gateway, we would highly recommend you read the article "How To Develop A Payment Gateway: Your Hands-On Guide."

Efficient load management

Many payment services as PayPal, have more than 430 million active users, and it can be really hard to find a good combination of software and hardware that works the best for the payment gateway. Distributed systems deal with such problems by providing the right load allocation tools.

Scalability

As we discussed earlier, one of the main characteristics of distributed computing systems is the ability to be flexible to changes and to connect multiple nodes or servers when needed. The system’s scalability will help you seamlessly grow the volume of your business transactions.

High availability

High availability can be achieved when systems can operate for a long duration of time continuously and without failure. The distributed computing system is an excellent tool: as we discussed earlier, such systems are scalable. Thus, they are more resilient to failure, which is essential for payment services, as failures can stop online payment transactions.

Low latency

Many factors affect the performance of your payment gateway. For example, the location of your services: the payments made in Europe shouldn't be processed in the US. Here you will need database access to understand the time in which the system will respond. Also, if you want to read more about the impact of location on the payment gateway, the article "Payment Services: Regional and General Limitations" can be helpful.

Capacity

Distributed database systems will allow you to understand the expected load the system can support in just a few seconds.

Best practices for building a large-scale distributed system

Building distributed payment system prescribes setting unique requirements for every project. It is not the “one-size-fits-all” case. So, we would like to share with you a list of best practices for building a large-scale distributed system.

Logic

Here are many essential aspects that are hard to understand and can not be neglected, so we will not overwhelm you with too much information. Let’s talk about the following aspects of logic in building a large-scale distributed system:

Queues- are used to prevent errors in system response before processing such requests. In such a case, the internal payment processor should asynchronously perform the queries to run this process seamlessly.

Idempotency is crucial in distributed systems as it should be predictable. The service is idempotent when you can perform the same action multiple times and produce the same results. When we talk about payment gateways, no one wants the system to act impredictably, so idempotency is an excellent feature for a system to have.

The actor model allows you to think about the whole system in terms of communication. Actors communicate with each other to tell other actors to change their state or repair themselves etc. This model is great for implementing in complex systems, such as payment gateways.

• Reactive principles enable applications to work together to react better to their surroundings and one another. This is an excellent solution for large and complex projects that require scalability and resilience.

Hardware and network

As you understand, the aspects discussed in this chapter of the article will not function without hardware. The next concept is hardware and network based on availability, resilience, and scalability principles.

• Availability – your product is available for as much time as possible. Remember that here you can not expect 100% availability from your system. Even top services like Amazon typically offer 99,99% of it.
• Resilience – this aspect looks quite obvious: the distributed system should be able to recover with minimum to no downtime.
• Scalability – we talked about it a lot today. Scalability is one of the main reasons to implement a distributed payment system, so ensure that the choice of tech in your stack meets the requirements, as it is an impact factor for scalability.

Data

Excellent data management practices will make your system more secure, which is crucial for the payment gateway. So, let’s read more about the elements of this aspect:

• Durability means that when any data is added to a system datastore, it will be available going forward. An important moment here: even if nodes in the system will run in offline mode or the crash occurs, the such process does not stop.
• Sharding – a complicated algorithm that helps manage distributed databases. It enables you to ensure proper load distribution: your data is split into small segments located on multiple devices.

Final Thoughts

Building the best payment gateway requires obtaining knowledge in many different areas to make your product suitable for users. As we have already proved by cases,  the distributed system can benefit your business if implemented correctly. So, to implement such a system seamlessly in your payment gateway, you need to understand the distributed system, its key components, primary benefits, and use cases in Fintech.

If you want to build a perfect payment gateway or need guidance on that matter – do not hesitate to contact our dedicated team!