Payment Gateway Integration System

Problem

Indian fintech companies face significant challenges integrating with payment aggregators while maintaining strict RBI compliance and PCI-DSS security standards. The existing integration documentation was incomplete, error handling patterns were unclear, and transaction reconciliation systems required custom development for each client implementation.

Key challenges included:

• Regulatory Compliance: Meeting RBI data localization mandates and PCI-DSS Level 1 requirements
• Multi-Channel Complexity: Supporting UPI, cards, net banking, and wallets with unified API
• Transaction Reconciliation: Real-time settlement tracking across 50+ payment channels
• Error Recovery: Handling network failures, timeouts, and partial transactions gracefully

Solution

Architected a comprehensive payment gateway integration framework that abstracts SabPaisa’s API complexity while ensuring regulatory compliance and transaction integrity.

Technical Architecture

API Gateway Layer: Designed RESTful wrapper around SabPaisa’s SOAP and REST endpoints, normalizing response formats and error codes.

Security Implementation:

• End-to-end encryption using AES-256 for sensitive data
• RSA key-based API authentication with automatic key rotation
• PCI-DSS compliant token vault for card data (never touching servers)
• TLS 1.3 for all API communications

Reconciliation Engine:

• Real-time webhook processing for transaction status updates
• Automated settlement matching with bank statements
• Discrepancy detection and alert system
• Daily reconciliation reports with 99.99% accuracy

Key Features

• Unified Payment API: Single interface supporting UPI, cards, net banking, wallets
• Automated Retry Logic: Intelligent retry with exponential backoff for transient failures
• Transaction Monitoring Dashboard: Real-time status tracking, success rates, failure analysis
• Compliance Automation: Automated PCI-DSS audit trail generation and RBI reporting

Implementation Highlights

Idempotency Guarantees: Implemented unique transaction ID deduplication to prevent duplicate charges during network retries.

Webhook Validation: Cryptographic signature verification for all incoming webhooks to prevent fraud.

Graceful Degradation: Fallback mechanisms when primary payment channels fail, automatically routing to alternative channels.

Impact

Measurable Results

• Transaction Success Rate: Improved from 87% to 96% through intelligent retry logic
• Integration Time: Reduced client onboarding from 2 weeks to 3 days with framework
• Compliance: Passed PCI-DSS Level 1 audit on first attempt (typically requires 2-3 iterations)
• Settlement Accuracy: Achieved 99.99% automatic reconciliation (previously 85% manual)
• Processing Volume: Successfully handling 50,000+ daily transactions with <100ms API latency

Lessons Learned

Observability is Critical: Comprehensive logging and monitoring caught 80% of issues before they impacted customers. Investment in observability tools paid off immediately.

Regulatory Documentation: Maintaining detailed compliance documentation from day one simplified audits. Retrofitting compliance is 10x harder than building it in.

API Design: Abstracting third-party APIs early provides flexibility. When SabPaisa updated their API, we shielded all clients from breaking changes.