The OND quarter witnesses a festive season in most parts of the world. We have seen a surge in liberal spending as the market is opening up and people are gearing up to spend on Luxury and travel. Even post-pandemic, digital payments continue to be the go-to payment option for shoppers. Consequently, payment platforms and gateways focus on devising ways to handle the expected surge in the volume of transactions.

In times like this, most fintech players rely on a combination of a robust technological infrastructure that can manage the pressure and meticulous planning to offer a seamless payment experience both for users and merchants alike.

In an exclusive interaction with Minu Sirsalewala – Executive Editor – Special Projects, Dataquest, Narendra Babu, Chief Technology Officer, PayU shares his views on what it means for Payment gateway platforms like PayU to have the capability to handle the growth in volume and ensure performance. The Wibmo collaboration, PayU’s tech growth strategy, and trends leading the payment segment.

Narendra Babu, comes to PayU with over two decades of experience in driving digital transformation strategies and building next-generation software products. Previously, he was with Walmart Labs Technology, India, where he led the supply chain businesses, building and leading large teams across India and the US. Prior to joining Walmart Labs, Narendra spent a decade at Google and Microsoft serving in multiple technology leadership roles. Find below the excerpts.

With the pandemic behind us and markets opening up there has been a visible spike in liberal spending during the festive season – what it means for Payment gateway platforms like PayU?

The pandemic accelerated digital adoption, but post-pandemic we see the preference for digital is still strong. For example, in the festive season of 2022, our platform saw a 64% increase in expenditure & 31% increase in the number of transactions vis-à-vis the festive period in 2021.

We also mapped the overall pandemic impact on Indians’ adoption of digital payments. Looking only at the festive periods, there’s been a 245% increase in expenditure & 130% increase in the number of transactions between the ‘normal’ period of 2019 & post-pandemic period of 2022.

How does technology ensure the smooth and secure handling of the surge in the volume of transactions? What have been the highest transactions processed in a day?

We processed 11 million transactions in one day –our highest single-day transaction. We were the trusted tech partner handling first-day sale surge of marquee brands.

PayU can manage high volumes thanks to its dynamic routing algorithm which chooses the most optimized route to perform a given transaction, keeps continually improving it by using historical & real-time data, and in conjunction with dynamic scaling capability, it is able to deal with huge traffic spikes. Our application architecture is designed and deployed in a way to factor these kind of surge scenarios. Therefore, PayU has the most stable and scalable platform in the country, preferred by brands during high volume festive season sales. We also harness and apply ML learnings qualitatively, using descriptive, diagnostic, and predictive analytic tools. Prescriptive analytics of previous years can provide valuable lessons in preparing for upcoming and ongoing festive season sales.

How do you ensure a seamless payment experience both for users and merchants alike?

We undertake a series of Load Testing Simulation and Actual Load Stress as well as Throughput, Latency and Efficiency analysis. This ensures glitch-free payment experience on the days of the sale. PayU’s war room preparations involve all teams – sales, operations, engineers, SRE’s, everyone –which ensures that our merchants & their customers get a glitch free payment experience & tractions can increase exponentially during festive times seamlessly. We optimize decision making on transaction routing through ML, ensuring a transaction success rate that is 2-3% better than the industry average.

In addition, we have a host of features and an exhaustive list of payment options that ensures smooth payment & checkout service which merchants can offer customers all year. For instance, we have smart checkout options like Token Hub, Native OTP, optimized payments for apps with PayU SDKs & Web Checkout services which allow merchants to accept digital payments from 150+ methods & get industry best success rates. With features like Checkout For Bharat, customers can see checkout page in their local language, boosting sales.

How is PayU Token Hub ensuring compliance and ease of use?

With Token Hub, we have successfully tokenized more than 60 million cards to date. PayU and Wibmo (a PayU owned company) built Token Hub to help merchants comply with government regulations on tokenizing debit and credit cards without compromising customer convenience.

Entities other than card networks and card issuers would not store debit or credit card data with themselves, but with Token Hub, popular payments use cases including EMI, subscriptions, instant refunds and offers engines which rely on card numbers can continue seamlessly. PayU has integrated some of the largest merchants in the country.

The fintech industry is grappling with some major challenges like data security, regulatory and compliance laws, lack of skilled tech expertise, user retention, and seamless user experience. What doggs your organization the most?

Regulation and compliance with laws is not a problem for PayU; we are fully compliant with all Indian laws. We welcome governmental initiatives which strengthen confidence in digital payments in the country. Testament to this is CoFT regulation. This regulation challenged the entire Payments ecosystem in the way Cards were managed. PayU was pioneer in providing the complete solution to the merchants both from tokenizing and token processing of transactions. PayU is proud in the way this was rolled out to our merchants with no disruption to their business. Compliance is a must-have for fair play and ensuring the customer is protected. Our challenge is to keep up to date w.r.t the changes in policies, we have our compliance team engage with all the stakeholders by doing trainings, open offices, etc on a regular cadence. Also, our SDLC life cycle also includes security & compliance steps, so every feature request is getting built allowing Engineers to factor these as part of design and development.

With increasing frauds and scams being reported, what is your perimeter security like? How do you ensure stringent security hygiene at your organization?

PayU has followed highly detailed ISO 27001 certification validation process which verifies the effectiveness of our internal security operations, secure software development practices and product capabilities. Our ISO/IEC 27001 security compliance is regularly validated by an independent internationally recognized third-party auditing authority after a rigorous assessment of our information security management system and related business processes.

PayU India is ISO 27001:2013 Certified – a gold standard in security recognized worldwide.

PayU’s integration with Wibmo helps in the provision of unique One-Step TM frictionless device fingerprinting, authentication via downloadable apps, and fraud detection behavior modeling to PayU’s customers. Our proprietary risk engine is designed for evolving fraud threats, and we use third-party risk engines, including those from specialist sector-focused risk firms. Advanced rules based on multiple parameters can be processed by the in-house risk management engine. PayU leverages its PCI-DSS certification & has deployed SHA512 and 2048 SSL Key encryption algorithms and benchmarked risk assessment processes to prevent fraud among merchants. At PayU, we test which attributes are most relevant, create compound signals to identify and block fraud & constantly tweak algorithms.

What are the business implications for platforms like PayU with the evolving threat landscape due to digitization, increased cyber-attacks, frauds and scams?

Business implications of fraud for any organization is data theft/loss, monetary damages (something which the Data Privacy Bill addresses), and reputational damage. In general, for any platform like ours, risk can come from a customer being defrauded or when a fraudulent merchant attempts to cheat a customer.

We are PCI-DSS certified to handle sensitive payments data of merchants and their customers and have best-in-class encryption algorithms (SHA512 and 2048 SSL Key) and benchmarked risk assessment processes to prevent frauds amongst merchants. PayU also has its own proprietary risk engine, developed globally for the PayU platform and now uses best in class third party risk engines (including from schemes and specialist sector focused risk firms).

What are the tech trends dominating the payments segment, and what can one look out for in the coming year?

Some trends which we can expect to go big next year include accelerated progress in Web3.0 & adoption of the metaverse by brands, bridging the digital and physical worlds. We will probably also see the increased interface of payment systems & wearables & greater investments by companies in sustainable technology. Going Digital first is no more a luxury but a necessity for any Business, this trend will continue in the post-COVID world as well. This is evident from the fact of the increase in adoption of Omni-channel Businesses where the boundaries between physical and digital worlds are slowly fading away.

What is PayU’s tech growth strategy for India and how will it further its business?

PayU over the years has built a very competitive Payment Aggregator system, Marquee merchants who run big sale events rely on PayU PA system for being very stable, highly scalable, and also compliant with regulations and Indian laws. In coming years, you would see more focus towards the SMB business, Keeping the technology as independent and Anything as a service will help us build/stitch products together at a much faster pace. You would also see PayU adding more value to the merchants in other Payment opportunities – Lending / Current Accounts / Recon / Offer Engine etc and be the one-stop shop for addressing all the financial problems for our merchants – This is possible because systems were designed and built for scale in a loosely coupled manner.

Narendra Babu

Chief Technology Officer, PayU

By Minu Sirsalewala

minus@cybermedia.co.in