In today’s rapidly evolving digital landscape, retailers and organisations are continually having to embrace and implement innovative payment changes to streamline payment processes and improve the overall customer experience. An important consideration in this regard for retailers who own their own payment switch is moving it to the cloud, a complex but necessary upgrade and safeguard that requires industry expertise and experience to deliver the programme without introducing extra operational risks.

As a leading global PayTech solution provider, Stanchion has more than 20 years’ experience solving complex payment problems for clients around the world. Currently, Stanchion is engaging with the largest payment switch vendor on a strategic European project, which entails migrating a large on-premise infrastructure to cloud. The project’s scope involves moving an existing multi-tenant payment switch to a well-known Cloud provider with Stanchion providing a solution architect to design the solution and provide support during the implementation and go-live phases to the project team.

It is this hands-on experience that makes Stanchion a smart choice for retailers and organisations looking to migrate their payment switch to cloud, with their team of experts having clear insights into both the short- and long-term benefits and challenges.

Key drivers

The main drivers for moving to the cloud include cost-saving, flexibility and compliance, with scalability set to come into play in the future.

Migrating a payment switch to the cloud can help reduce infrastructure expenditure as the cost of leasing on-premise data centres is high. By moving to the cloud, costs can drop significantly as hardware, software licences and maintenance costs fall to the cloud vendor.

Furthermore, maintaining PCI compliance of a self-hosted data centre is always a painful and risky process – it requires lots of working hours and brings risk to the organisation in case of a PCI audit failure. Moving to the cloud reduces compliance operations for the organisation as, once again, a subset of the responsibility shifts to the cloud vendor.

In terms of flexibility, this is enhanced by built-in cloud services such as network firewalls and HSM services.

While scalability is not one of the current key drivers regarding mainly the payment switches, it is likely to become so in the future. By implementing their payment switch migration now, retailers can stay ahead of the curve and be ready to take immediate advantage of the scalability benefits when they come. As Stanchion’s Senior Solutions Consultant, Costas Valakas, points out that most payment platforms are not cloud optimised, meaning they often do not utilise microservice benefits. “Having said that, however, we are going to see the real benefits in scalability as soon as the switch vendors start redesigning their products based on the microservice architecture. These benefits will be huge as retailers and organisations will be able to spin off multiple miniature switches on-demand,” says Valakas.

He lists the example of retailers being able to scale up to meet the transaction surge over the festive season (or even worse on Black Friday) and then scale back down afterwards when transactions ease off. “Similarly, if there is a service disruption in one region, new switch instances can be created in real time in another region and provide the necessary bandwidth for the online processing.” And because it is cloud based, this could all be done almost automatically with minimal manual intervention.

Valakas highlights that taking advantage of the DevOps-friendly cloud infrastructure means a lot of operations can now be performed automatically, including one-off operations like the deployment of payment servers and repetitive ones, such as software maintenance, patches installation, parameters configuration, back-office operations and more.

Time challenges

Despite these benefits, moving their payment infrastructure to the cloud is a big step for retailers and many are reluctant to embrace this change. As well as needing a culture shift within the organisation and buy-in from the top down, migrating a payment switch to the cloud requires careful assessment and planning, as well as preparation and testing to ensure a smooth transition.

The time frame is lengthy: in Stanchion’s experience, organisations need at least two years from initial decision to going live, depending on the infrastructure’s complexity.

• The first phase involves the setting up of the cloud infrastructure, including DevOps workflow preparations and can take up to 9 months to complete.
• Phase two, typically, requires an additional year and involves migrating the actual payment platform to the respective cloud servers and covers software installation, parameterisation and extensive testing.
• The final go-live phase is done gradually, with a full-store migration taking up to two months, depending on the retailer’s size.

Optimised solutions

Stanchion’s Verto and Switchcare solutions can be utilised to underpin and ensure a smooth migration to the cloud.

“During the preparation phase, before moving to the cloud, Verto can abstract a lot of the switch’s functionality and integrate it with the Verto framework,” explains Valakas. And because Verto is cloud-optimised, it makes the migration smoother and easier. “Additionally, Verto can be easily scaled horizontally, providing redundancy to any service it performs. The organisation can also benefit from other out-of-the-box services Verto provides such as notifications, integration with alternative payment channels, card token life-cycle management and more.”

SwitchCare’s combination of on-prem and cloud-based deployment support means it can give retailers the assurance they require to deliver the high service levels customers demand. SwitchCare’s full stack combination of platform, application and real-time transaction monitoring can support the transition, minimising the risk of outages and providing assurances during this critical time.

With extensive migration project experience over the last two years, combined with the experience the team acquired on cloud architecture during the development of its Verto and SwitchCare solutions, Stanchion is ideally positioned to guide and assist organisations as they migrate their payment switches to the cloud by designing the solution and providing implementation support.

As Valakas says: “Our hands-on experience, combined with our team’s deep payment switch knowledge and long exposure to payment-related projects, means Stanchion can provide a full range of services to retailers and organisations looking to take this crucial – and essential – next leap forward on their payments journey.”