Digital Payments Leader Partners with Cloudflare to Make Your Monthly Mobile Payments Faster and Securer

Over the past five years, India’s digital payments industry has experienced tremendous growth. The report, titled “Digital Payments in India: A $10 Trillion Opportunity,” states that the market is at a tipping point and that by 2026, he will more than triple from $3 trillion today to $10 trillion. It emphasizes that it is projected to be large. (non-cash transactions) are expected to account for two-thirds of all payment transactions by 2026.

PhonePe, one of India’s leading players in the digital payments and financial technology (fintech) sector, with a user base of nearly one in four Indians, is well-positioned to lead this paradigm shift I have.

Founded in December 2015, the company creates products and services tailored for the Indian market and has a user base of over 435 million registered users. PhonePe has also made significant strides in digitizing offline merchants, with more than 35 million of his merchants in Tier 2, 3, 4 cities and beyond now using its platform. This extensive reach covers his 99% of all PIN codes in India. In terms of market share, PhonePe consistently outperforms competitors such as Google Pay and Paytm.

Detailed Market Share Source: NPCI

In its latest development, PhonePe has secured $350 million in funding from global growth equity firm General Atlantic at a pre-money valuation of $12 billion. This is the first tranche of a funding round of up to $1 billion that PhonePe launched in January 2023. The company plans to use the newly acquired funds to invest heavily in infrastructure, including data center development, to build up its finances. Large-scale service provision in the country. PhonePe also plans to invest in new businesses such as insurance, wealth management and lending.

The funding is expected to boost PhonePe as it aims to accelerate the growth of the next phase of UPI payments in India, such as UPI lite and UPI credits, thereby increasing the number of Indians. The promotion of financial inclusion will be facilitated.

The growth of digital payments is not without challenges

With network requirements defined for peak times, PhonePe was looking for an elastic Content Delivery Network (CDN) to absorb daily traffic spikes. More importantly, the solution had to handle dynamic traffic without introducing delays that could detract from the user experience.

“Each transaction should be completed in 3 seconds. When the time is longer, people lose patience. When a transaction reaches 12 seconds, users assume there is a problem. zero,” PhonePe co-founder and Chief Reliability Officer Burzin Engineer told VentureBeat.

The quality of PhonePe’s customer experience is critical to customer retention, so the company also needed a way to manage and efficiently distribute still image and video content. Most importantly, as a fintech platform partnered with banks, PhonePe needed a single solution for real-time protection against threats such as denial of service attacks (DDoS), malicious bots, and SQL injection. They also needed to be able to make large financial transactions instantly.

To defend against these threats and secure more than 3.6 billion mobile payment transactions each month, PhonePe has partnered with San Francisco-based security, performance and reliability company Cloudflare (NYSE: NET) doing. “Cloudflare’s tech stack caught our attention. Compared to other vendors, they didn’t carry the burden of 20-year-old technology,” he says. “Cloudflare was newer, with a modern, API-driven content delivery network purpose-built from the ground up.”

PhonePe’s leadership also relies on Cloudflare’s commitment to building relationships in India and improving the topology of its content delivery infrastructure nationwide. As it stands, Cloudflare has multiple data centers in Indian cities such as Mumbai, Chennai, and Hyderabad. These data centers store copies of static content from websites that use Cloudflare’s CDN service. When a user requests content from one of these her websites, the content is served from her closest Cloudflare data center, helping improve her website load times for Indian users.

“All of our business is domestic, so the Cloudflare Web Application Firewall (WAF), managed rule sets, and the ability to geographically block traffic provided immediate security benefits. We blocked over 90% of malicious attacks by restricting traffic to sources in India using Cloudflare WAF.The WAF uses a combination of rules and machine learning to analyze SQL Identifies and blocks potential threats such as injection attempts and cross-site scripting (XSS) attacks.”

“Limiting traffic to certain domestic sources is also an effective way to reduce the risk of malicious attacks. It reduces the pool and makes it more difficult for malicious actors to access the website,” he added.

Cloudflare also plays a key role in ensuring PhonePe maintains critical uptime. The engineer said he detected and neutralized 180 million threats per month to the PhonePe application layer. Cloudflare not only protects PhonePe’s applications, it also simplifies the security audit process and helps the platform meet compliance requirements.

Cloudflare also complies with India’s data localization and data residency regulations, simplifying PhonePe’s compliance requirements.

Serverless image resizing and adaptive bitrate video delivery for a smooth and responsive user experience

Having addressed security and compliance issues and secured their applications and network, PhonePe focused on further enhancing the user experience with Cloudflare Workers traffic processing technology and the API-first Cloudflare global network.

PhonePe initially optimized millions of source images locally to ensure responsiveness on any device and improved performance at service points. The resizing process required over 50 bare metal origin servers. Cloudflare Workers have eliminated the need for these machines. “After offloading dynamic resizing and image delivery for over 200 devices to Workers, all we had to serve was a single high-resolution source image,” explains Engineer. “Workers take care of resizing, caching, and serving these images for us. It saves PhonePe resources, space, and power. It’s also faster, which improves the user experience.”

With the support of the Cloudflare engineering team, PhonePe conceived and implemented the change within two months.

After successfully offloading responsive image processing to the edge, PhonePe moved on to optimizing video content delivery. The company chose Stream, his Cloudflare video service for live and on-demand that dynamically adapts each stream to network conditions. The Stream service has proven to be ideal for alleviating video delivery issues caused by inconsistent mobile Internet performance.

“The stream changes bitrates based on available bandwidth,” said the engineer. “Previously he had three bitrates to choose from, but that was a one-time decision for him. Now Stream dynamically changes speeds, eliminating stalls and jitters to ensure a better customer experience for him. are improving.”

By using Workers and the Cloudflare global network, PhonePe offloads an average of 80% of traffic from origin servers, enjoying corresponding bandwidth savings and a 10x reduction in infrastructure costs. In a month, Cloudflare handles 775 billion requests to PhonePe (over 289,000 requests per second), and PhonePe’s merchant notifications and image resizing use cases trigger 50 billion worker requests.

For PhonePe, where network and security issues directly impact customers and merchant partners, proactive Cloudflare support provides peace of mind and a boost of perspective. “We will continue to grow all parts of our business. It also includes enhancing our services,” said the engineer. “Going forward, digital payments will need to be more inclusive and ‘Bharat’ (non-metro users) will really play a key role in this growth. We will continue to focus on building services for the billion Indians who have the means to transact but who do not know or understand digital payments.