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Speed digital payments and real-time transactions with Red Hat

Gain customer loyalty with real-time payment experiences

Faster payment platforms present organizations with an opportunity to improve customer experience and loyalty while boosting operational efficiency. A type of financial transaction for instant settlement, real-time payment services allow both individuals and institutions to send funds with immediate and irrevocable availability to others over a secure payments network. Senders can directly confirm receipt of funds, completing the experience in seconds, rather than hours or days. Often implemented using cloud technologies, more modern payment platforms can also help organizations process larger payment volumes and better manage their cash positions to control costs.

In 2015, the United States Federal Reserve Faster Payments Task Force established criteria for a successful faster payments system in the U.S. Composed of more than 300 delegates representing financial institutions, corporate treasurers, consumer advocates, financial technology firms, industry associations, academics, and others, the task force set 2020 as the target date for faster payment offerings to be available to every U.S. consumer and business.

The trend to deliver faster payments is not limited to the U.S. Worldwide, financial organizations are establishing real-time payment initiatives. While these initiatives may be called instant, faster, or immediate payments across North America, Europe, and Asia, all aim to process higher volumes of payments more quickly. Globally, 51% of banks will increase their IT budgets for payments-related projects, with 61% of banks in Asia increasing investment. Additionally, 85% of all banks expect realtime payments to create revenue growth. As a result, many banks are now modernizing their infrastructure to support real-time payment processing operations.

This overview will discuss a framework for building faster, modern payment platforms to meet global initiatives.

Connect to a new network for delivering payments faster

In the U.S., payments services have historically used automated clearing house (ACH) networks to deliver funds. Payments are posted to payees on the same day funds are sent, while banks settle the transaction via the ACH network. Because the ACH network uses batch processing, there is a delay in ACH transfers. As a result, banks deliver funds to the payee before the bank itself actually receives them.

In response, organizations are developing fast payments initiatives. For example, The Clearing House (TCH) banking association launched its real-time payments service. The first new payments system in the U.S. in more than 40 years, the RTP network is a real-time payments (RTP) platform that allows federally insured U.S. depository institutions to transfer funds between bank accounts in only five seconds. The RTP network is separate from ACH and wire transfer networks and RTP payments do not interface or clear through these mechanisms. 

The Clearing House is working with providers of core processing and payment services, banks, and corporate credit unions to ensure that every financial institution in the U.S. has an easy way to access the RTP network by 2020. In order to use the new network, banks need to build or access platforms that create and receive payments according to the RTP network message standards. These platforms must also integrate with existing banking systems, including settlement and posting systems.

Build a platform for faster payments

Agile integration and cloud architectures are critical for a successful instant payments platform. New technologies must be connected to legacy infrastructure to provide modern features and operational efficiency while protecting existing investments. Key technologies include hybrid cloud infrastructure, containerized microservices, integration platforms, data streaming tools, and process automation. Combined with agile processes, these components allow you manage higher throughput and rapidly innovate and provide faster, simpler services to your customers.

Using the solution framework outlined in this overview, you can quickly develop and seamlessly integrate microservices into your existing architecture to deliver more value to internal and external users. The modular, cloud-ready architecture — connected through lightweight integration processes — improves service resilience and make it easy to adapt and add new features over time. Finally, a high-throughout, low-latency message streaming service platform allows you to handle large volumes of payments without delays.

Create an open source, enterprise foundation for faster payments

Using modern, open source technologies, Red Hat can help you build a flexible, cost-effective, and production-ready faster payments platform.

Open source technologies

Red Hat’s open source software stack provides key elements — like containers, cloud-native runtimes, distributed caching, process automation, agile integration, and message streaming — needed for efficient payment platforms. Industry-standard interfaces and integration between layers of the stack simplify interoperability between applications, events, and systems of record.

Open source software also delivers significant savings compared to proprietary solutions. For example, organizations that deployed Red Hat® OpenShift®, an enterprise-grade open source container platform, experienced 66% faster application development life cycles and 38% lower IT infrastructure and development platform costs per application.1 Without vendor lock-in, you can move applications and services between infrastructures and cloud providers to optimize costs, improve performance, and meet growing demand.

Security focus

To protect your business and your clients, you need a continuous, integrated approach to security for your payment platform. Red Hat builds advanced security features — like Security-Enhanced Linux® (SELinux), mandatory access controls, and container-based application isolation — into its products. Compliance with Payment Card Industry Data Security Standard (PCI-DSS), Defense Informations Systems Agency Security Technical Implementation Guides (DISA STIGs), and Federal Information Processing Standards (FIPS) ensures your environment operates according to the latest, most stringent security standards. Integration between layers in the Red Hat stack extends militarygrade protection throughout your environment. Red Hat Product Security also issues fixes for most critical security issues within one day of discovery.

Using a modular approach, Red Hat provides a flexible, open source technology foundation for faster payments processing.

Operational efficiencies for payments processing

The Clearing House RTP network supports several message types to support fast payments. Figure 1 shows the credit transfer process to illustrate how the components in the Red Hat architecture work together to deliver fast payments.

The payment process can be initiated in several ways. An individual or business can send payments to another individual or business via direct or partner channels. Payment data is exchanged through APIs, data streams, or batch data loads. The payment approval service validates payment data, then reformats the payment message and forwards the message to the payment connector service. Finally, the payment connector service routes the message to all dependent processes for confirmation, notification, and settlement of the payment.

Red Hat delivers innovative, tested, trusted components for each step in the real-time payments process. Each component can be scaled independently to meet changing demand. A series of interconnected services support application functions — including integration, updates, and message management — and deploy as containers. Finally, the event-driven architecture avoids synchronous processing bottlenecks, allowing messages to flow through the system faster.

Container platform

Containers simplify application deployment and portability across platforms. This eliminates the need to refactor services to launch them on different infrastructure and makes your environment more efficient. Containers also let developers deploy services like data streams, caching, automation, and business rules on demand, without needing to provision additional infrastructure.

A production-grade container application platform, Red Hat OpenShift provides services to containerized workloads and components. It delivers built-in security features for container-based applications — including role-based access controls (RBAC), SELinux-enabled isolation, and checks throughout the container build process — helping to safeguard your overall application environment.

In this solution, Red Hat OpenShift serves as the underlying container application platform. Application services are built, deployed, and managed using Red Hat OpenShift.

image container Figure 1. The Red Hat operational efficiency solution for payments architecture and credit transfer message flow

Enterprise integration tools

Enterprise integration tools connect applications and internal systems of record. It also lets you monitor and control data access and authorization to protect your infrastructure and business.

Red Hat Fuse is a comprehensive, cloud-native integration tool that allows integration experts, application developers, and business users to collaborate and independently develop connected solutions. A distributed approach and microservice-centric, container-based architecture decouples services so they can be created, extended, and deployed independently. With more than 200 included connectors, you can integrate everything from legacy systems to Internet of Things (IoT) devices into a single environment.

You can also use Red Hat 3scale API Management to integrate application programming interfaces (APIs) with systems of record. Red Hat 3scale API Management lets you share, secure, distribute, manage, and monetize your APIs using a centralized tool built for performance, customer control, and future growth. Coordination with Red Hat Fuse lets business users, integration experts, and application developers create APIs easily and quickly.

In this solution, Red Hat Fuse connects internal and external banking systems. Optionally, Red Hat 3scale API Management can provide distributed control plane management for real-time payment APIs.

Message streaming platform

Efficient messaging is critical for fast payment systems. A distributed messaging platform lets systems across your infrastructure communicate with each other.

Red Hat AMQ is flexible messaging technology — based on the open source Apache Kafka streamprocessing platform — that delivers information reliably to support real-time integration and connections. With Red Hat AMQ Streams, you can share data between microservices and applications running in Red Hat OpenShift with high throughput and low latency. It also provides built-in partitioning, replication, and fault tolerance.

In this solution, Red Hat AMQ integrates and provides messaging services to applications, endpoints, and devices.

Data caching systems

Fast payment systems require rapid access to relevant data.

Red Hat Data Grid is an in-memory, distributed, NoSQL datastore solution that allows applications to quickly access, process, and analyze data.

In this solution, Red Hat Data Grid caches frequently accessed customer and transaction data to improve response times.

Process automation engine

For fast payment systems, requests must be promptly validated and appropriate actions taken based on that validation. An effective process automation engine can automate this process to streamline operations.

Comprised of Red Hat Decision Manager and Red Hat Process Automation Manager, Red Hat Process Automation provides an integrated set of developer tools and runtimes, process and decision management tools, and automated DevOps pipelines. This containerized solution allows business and IT teams to collaborate and develop applications that automate operations that can be easily adapted as market needs change.

Red Hat Decision Manager is comprehensive decision automation software for business rules definition and management, resource optimization, and complex event processing (CEP). It is compliant with Decision Model and Notation (DMN) standards.

Red Hat Process Automation Manager is a tool for developing containerized microservices and applications that automate business decisions and processes. It includes business process management (BPM), business rules management (BRM), and CEP technologies, and is compliant with popular industry standards like business process model and notation 2.0 (BPMN 2.0) and DMN 1.1 for process and decision management.

In this solution, Red Hat Process Automation implements and encapsulates business policies, validation logic, and rules for handling exceptions, managing cases, assigning tasks, and other paymentsrelated operations.

Extend your platform for smarter payments

With a flexible payment platform based on Red Hat, you can easily add innovative new capabilities and take advantage of community innovation. Red Hat’s open source technology foundation and partner ecosystem let you integrate artificial intelligence, machine learning, cognitive computing technologies into your environment to extend payment functionality and services.

Deploy faster with Red Hat services

Red Hat Consulting offers services to help you build more modern and efficient payments platforms faster. Using a strategic solution delivery framework, Red Hat experts can provide assessment, planning, and implementation services. The process-driven applications pilot program is an eight-week engagement that delivers a production-grade solution based on business process automation and integration. Additionally, through Red Hat Open Innovation Labs, members of your team can attend hands-on residency programs to learn how to use open source technologies and culture to solve business challenges.

Learn more

Real-time payment services can help you improve customer experience and loyalty while increasing operational efficiency and reducing costs. Modern, agile technologies like containers and microservices are critical for building an effective real-time payment platform. Red Hat provides an open, modular technology foundation that gives you all of the capabilities needed to offer fast payment services to your customers while preparing you for future change and innovation.

Learn more about Red Hat solutions for financial services at