NTT DATA Builds a New Cashless Platform and Transforms Its Organization to Deliver Customer-Oriented Services through Agile Development

CAFIS was born in 1984, focusing on expansion of the credit card market. It supports Japanese payments 24/7, processing nearly 900 million payments per month and connecting more than 1 million member stores with almost all domestic credit card companies and financial institutions.

In recent years, the digital payment service environment has changed significantly. Therefore, in 2019, NTT DATA launched a new digital transformation project known as Digital CAFIS.

“The existing CAFIS is a platform that was developed in the 1980s for credit card payments centered around payment terminals,” says Masanori Kurihara, business manager of the Card and Payments Division at NTT DATA. “Now that smartphones have become popular and multiple payment methods have appeared with the expansion of the ecommerce market, new added value is required. Therefore, we thought about responding to structural changes and shifting to provide consumer-oriented and franchise-oriented services.” 

Digital CAFIS was driven by the company’s digital team, which was independent from the existing CAFIS team, to develop services that are not bound by precedent or past achievements. Five engineers hired from external ventures began agile development as a scrum team. As a driving team of Digital CAFIS, the company set up the Digital Payment Development Office in 2019.

“To drive disruptive innovation, we needed to build cross-cultural organizations from scratch, reassessing everything from organization structure to development processes and workplace environment,” explains Daiju Kato, director of the Digital Payment Development Office of the Card and Payments Division at NTT DATA.

In promoting Digital CAFIS, NTT DATA looked for agility in its service platform. That led the company to consider using the cloud, and ultimately, it decided to adopt AWS. “If you want to ride the trend of the times and advance agile development, the cloud is the only option,” says Koji Morinaga, manager of the Digital Payment Development Office of the Card and Payments Division at NTT DATA. “We selected AWS due to factors such as its stability, wide range of offerings, and track record in use at financial institutions.”

NTT DATA built a development environment of the service platform in 2018 and then launched the platform in the commercial environment in April 2019. First, the company migrated the ecommerce payment gateway from the existing CAFIS to AWS. Next, it built new features, such as a QR code payment gateway, on AWS.

The architecture containerizes the application infrastructure with Kubernetes and uses Amazon Elastic Kubernetes Service (Amazon EKS), a managed Kubernetes service, as the operation environment. It synchronizes databases using Amazon Aurora, which provides high performance and availability at global scale with full MySQL and PostgreSQL compatibility. The deployment environment is coded in Terraform.

“To provide Digital CAFIS as a financial service, we have enhanced the architecture to offer at least the same level of reliability and security as CAFIS,” says Morinaga. “In the first year, we standardized the build environment to Amazon EKS and updated the skill set of the engineers; in the second year, we advanced operations; and in the third year, we introduced a multi-region configuration.”

From the fourth year onward, NTT DATA adopted Amazon Elastic Container Service (Amazon ECS)—a fully managed container orchestration service—for container environments and AWS App Runner—which helps to deploy web applications and APIs at scale—for development environments with the aim of diversification, making deployment easier. “Excessive standardization can make an organization inflexible, so we are conscious of building an environment with a high degree of freedom,” says Takumi Yaguchi, acting manager of the Digital Payment Development Office of the Card and Payments Division at NTT DATA. “While we use multiple AWS accounts to increase the degree of freedom, we’re equipped with a governance of multi-account management.” NTT DATA achieves this governance using AWS Control Tower, which is used to set up and operate multi-account AWS environments with prescriptive controls.

Another characteristic of Digital CAFIS is that it employs open source software and software as a service readily as a means of increasing agility.

“Our policy is to choose the right tools in the right place. The release of Amazon EKS triggered our adoption of Kubernetes. Following that, we chose Kubernetes-based open source software, Prometheus and Grafana as monitoring tools, and ArgoCD for deployment management,” says Yaguchi.

Since the kickoff of the Digital CAFIS initiative, NTT DATA has built a good relationship with the AWS account team and is satisfied with the support it has received.

“We’ve overcome various challenges together alongside AWS. AWS Professional Services provides the latest architecture reviews and technical consultations, and technical account managers inform us of service maintenance information and cost optimization proposals as appropriate,” says Morinaga. “Solution architects and account managers keep us updated on the latest information. All of them are very helpful. We exchange candid opinions with account managers above our stations to maximize the benefits of the cloud.”

Currently, close to 150 employees are working on Digital CAFIS, and the team is made up of 600 people, including partners. Digital CAFIS processes approximately 100 million payments per month, which is one-ninth of CAFIS’s total volume and represents 300 billion yen in transaction value.

“The scrum teams have grown from three teams initially to around 60 teams over 4 years, a 20-fold increase,” says Kato. “We are now launching an average of five services per year. The development period has been halved from 6 months on premises to 3 months, and we have seen the agility we were hoping for.”

Many young employees in their 20s are working on Digital CAFIS, fostering organizational autonomy and diversity. As a result, the team is now able to develop customer-oriented services and systems, which has had a positive impact on business.

“With the adoption of the cloud, the business and IT teams can work closely, each becoming aware of the other’s perspective during development,” says Kurihara. “Also, a culture of exploring new technologies has been fostered within the development team.”

Digital CAFIS is about to move from the launch phase to the next phase.

“Digital CAFIS has technical debt yet. We are also aware of the 2025 digital cliff, a possible economical loss if companies in the country could not achieve business and digital transformations until 2025,” says Kato. “We will continue working to change the organizational culture of the company by engaging with more teams and individuals.” 

From the business perspective, NTT DATA will continue to advance structural reforms to take cashless payment experiences in Japan to the next stage.

“We will continue to work on value creation that will solve issues for consumers and affiliate stores as well as contribute to the popularization of cashless payments in Japan,” says Kurihara. “To that end, we believe AWS will improve transparency in addition to business continuity and security as a financial settlement platform.”