Paytm Payments Migrates Tag Issuer System to AWS for Instant Scalability

Paytm Payments Bank Limited (PPBL) is a leading digital bank in India with over 330 million digital wallets, as well as 65 million current and savings accounts. The bank is also 1 of 35 certified banks in India that issues FASTag, a cashless, electronic toll collection device.

PPBL previously hosted the infrastructure for the tag issuer system (TIS) on-premises. Any additional infrastructure required considerable effort to procure and prepare before it was ready for application deployment. Along with that, the TIS also observed network connectivity issues a couple of times which required detailed analysis and temporary hardware unavailability for inspection and verification, which caused temporary infrastructure deficits. When the Indian government released the guidelines mandating toll plaza deductions through FASTag around the end of 2020, the bank saw the opportunity to migrate to the cloud.

In anticipation of the rapid growth in users and transactions, PPBL decided to leverage Amazon Web Services (AWS) in January 2021 for faster scale out. By the end of 2021, the company handled more than 1.8 million average daily tag transactions compared to 0.9 million average daily transactions in December 2020, and was the largest issuer of FASTags in India.

PPBL migrated its TIS application to the Amazon Elastic Compute Cloud (Amazon EC2) platform in anticipation of heightened compute capacity and scalability requirements. With Amazon EC2, the TIS can scale instantaneously to handle surges in transaction traffic without having to procure infrastructure in advance. This allows PPBL to maintain consistent and quality service.

PPBL also leveraged Amazon EC2's autoscaling to optimize costs during the pandemic when toll transaction traffic fluctuated drastically due to changes in lockdown restrictions. In June 2021, before migrating to AWS, the TIS was processing an average of 1.2 million transactions a day. When lockdown restrictions eased in December 2021, the transactions surged by 50 percent to an all-time high of 1.8 million daily average transactions.

“The scale of the FASTag rollout made it difficult to cater to every contingency on an on-premises infrastructure. Being on AWS gives us the opportunity to scale infinitely, and the agility to respond to changes,” shared Nipun Arora, general manager of engineering at Paytm. PPBL was the fastest bank to issue 10 million FASTags and is responsible for nearly 30 percent of all FASTags in the country.

The deployment began with migrating internal Application Programming Interfaces (APIs) before moving to transactions from external APIs. Prior to the cutover, PPBL also conducted a 2-hour trial, whereby all TIS’s traffic was directed to the cloud and monitored. This allowed the team to identify and rectify any compatibility issues. The entire deployment, including the trial, took 3 to 4 weeks to complete.

PPBL also moved its Kubernetes applications to Amazon Elastic Kubernetes Services (Amazon EKS). PPBL’s developers now spend less time deploying, scaling, and managing Kubernetes applications. Overall, migration to the AWS Cloud helped the PPBL team save around 8 to 12 weeks per year, which were previously spent on procuring infrastructure, deploying servers in data centers, formatting, and setting up the network connectivities.

Additionally, PPBL also stores transaction reports on Amazon Simple Storage Service (Amazon S3), which are available upon request. This has improved latencies as these operations get dedicated network bandwidth between Amazon EC2 and Amazon S3 instead of shared bandwidth, as it did previously on-premises.

Furthermore, moving to AWS made it easier for PPBL to hire talent for the infrastructure team. The bank no longer has to restrict itself to IT talent who have skill sets in their previous on-premises infrastructure. This allowed PPBL to tap a wider pool of technology talent.

“As we have inhouse expertise on the AWS Cloud, now we can quickly respond to concerns and issues, and make infrastructural changes that are in line with our business needs. The AWS team also helped upskill our developers and increase their proficiency with the AWS infrastructure,” Ajit Kumar, vice president of engineering at Paytm shared.

Beyond the electronic toll collection system, PPBL has plans to add parking and fuel payments to TIS’s functionality. By the bank’s estimates, this will increase daily average transactions on its platform from 1.8 million to 2.7 million. With TIS now running fully in the AWS Cloud, PPBL is ready to further ramp up operations, facilitate business growth, and stay ahead of other payments banks in the Indian market.

To learn more, visit Financial Services.