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Maximizing Business Value with Legacy Payments Modernization

We built a payment layer on top of the existing infrastructure using a strangler-fig approach. We delivered SEPA instant processing, payment orchestration, and full DORA compliance during a phased enterprise software development engagement.

Legacy Payments Modernization: Achieving SEPA Instant and DORA Compliance
 SEPA instant payments or DORA operational requirements.

Client

The client operates as a payment services provider for businesses, supporting multicurrency transactions for corporate clients operating across the Netherlands, Germany, and Belgium.

After building an architecture for over ten years, their system had evolved into a monolith no longer capable of supporting SEPA instant payments or DORA operational requirements. This project combined expertise in fintech software development, payments engineering, and cloud migration.

Business Challenge

With SEPA Instant and DORA timelines overlapping, the gap between existing payment-processing capacities and compliance requirements prevented banking modernization.

Regulatory Deadlines

The old system was batch-oriented and could take 24 hours to complete transactions. The operations staff spent 40%+ of time on manual reconciliation, without having any visibility into the transaction flow in real time. The cost per transaction was 40–60% above cloud-native competitors because of infrastructure overhead and manual processing inefficiencies.

Operational Inefficiency


The system relied on 24-hour batch processing. Without real-time visibility, staff spent over 40% of their time on manual reconciliation, creating critical workflow bottlenecks.

Competitive Pressure

The competition that provided instant payments was already luring customers. Non-compliance had the consequences of fines and loss of license. DORA compliance brought obligations for real-time incident detection, third-party risk management, and a complete audit trail. The replacement of the platform would take about 18–24 months.

Technical Gap

Routing, processing, reconciliation, and reporting were put together as one monolithic system, which could not be upgraded in pieces. There was neither ISO 20022 compliance nor an event-driven framework, and there was no possibility of executing a payment in ten seconds through the current architecture. The customer required expertise in payments engineering and data migration in fintech.

Solution

The modernization process was implemented via four layers constructed simultaneously alongside the legacy platform using the strangler fig model. The modules were individually deployed and tested while the old system kept working. 

Module 1: SEPA Instant Payment Engine

Batch processing was replaced with an event-driven architecture on top of Apache Kafka, satisfying the requirement of the 10-second SLA in line with SEPA Instant Payments Regulation. ISO 20022 implementation manages all messaging formats and validations. The operation of SCT Inst runs 24x7x365 with VoP done prior to each transaction.

Module 2: Payment Orchestration Platform 

The payment orchestration platform ensures that payment channels are managed irrespective of the payment rail being used. In case of a failover, a backup rail automatically turns on. Bulk payroll payments and B2B disbursements are broken down into individual instant transactions.

Module 3: DORA Compliance and Operational Resilience

Real-time fraud detection with DORA-aligned automatic workflow escalation for any incidents. Audit trail is provided for each transaction and all system activities, with the option to be reviewed by regulators at any time. Disaster recovery is DORA-compliant with an RPO under 4 hours and an RTO under 2 hours.

Module 4: Real-Time Operations Dashboard

Transaction flows are available in the real-time dashboard per rail and per volume. Reconciliation occurs in real time with more than 90% automated resolution without any manual work involved. Reports required by regulations are produced based on audit trail data. Manual work was decreased by more than 40% of working time to exception handling only.

Security and Fraud Prevention

SEPA Instant payments are non-retractable once initiated. That is why AI fraud detection models evaluate the transaction for risks prior to clearing. The system adheres to the PCI DSS compliance, payment information is tokenized, and the customer authentication procedure is applied per the PSD2 regulation.

  • 10-Second

    Payment SLA

  • 90%+

    Automated Reconciliation

  • Zero

    Downtime Migration

  • Business Architecture
  • Team
  • Development in Detail
  • Technology Stack
  • The platform uses an event-based architecture to enable real-time payments across various SEPA rails and drive banking modernization.

    Payment Processing Domain
    Deploys a Java (Spring Boot) microservices engine with ISO 20022 message handling to execute SCT Inst protocols, verify payees via VoP, and route payments across SEPA Instant and SEPA Credit Transfer rails — all within a 10-second SLA, 24/7/365.

    Orchestration Domain
    Implements an intelligent routing engine based on Kafka that uses rule-based routing and failover to backup rails based on cost, speed, and regulation. It also allows splitting payroll and B2B payments into individual instant transactions.

    Compliance Domain
    Incorporates Kafka-based event streaming and ClickHouse audit logging to provide incident detection, an automated escalation process, and third-party risk management. This also includes the capability to perform DORA-compliant regulatory reporting in real time with an accessible audit trail for each transaction.

    Operations Domain
    Provides real-time transaction monitoring using a React dashboard and ClickHouse analytics/PostgreSQL database; provides live transaction monitoring per rail and volume, automatic reconciliations with over 90% resolution of discrepancies, SLA compliance per all payment types, and exception-only monitoring for operations teams.

    Security Domain
    Provides a PCI-DSS-compliant system with AWS KMS tokenization services, PSD2-compliant Strong Customer Authentication (SCA), and AI-based transaction pre-screening, as well as WAF security and continuous vulnerability scanning of all infrastructure elements.

    • The project received an assigned group of 9 experts for delivery:

      Project Manager: Delivery, stakeholder coordination, and regulatory milestone tracking.

      Solution Architect: Strangler fig migration strategy, payment layer architecture, and DORA compliance framework.

      Payments Engineer: SEPA Instant implementation, ISO 20022 integration, and clearing house certification.

      Backend Engineers (3): Payment engine, orchestration layer, Kafka pipelines, and provider APIs.

      Data Engineer: Reconciliation engine, real-time analytics, and regulatory reporting automation.

      Frontend Engineer: Operations dashboard and exception management interface.

      Security Engineer: PCI DSS architecture, transaction screening, and penetration testing.

      QA Engineer: Payment flow testing, compliance validation, and SEPA Instant SLA load testing.

      DevOps Engineer: Kubernetes infrastructure, CI/CD pipelines, and blue-green deployment.

    • Assessment and Architecture: The initial phase of the project began with an assessment and audit of the current payment solution in terms of its compliance with SEPA Instant and DORA regulations. In addition, the approach to implementing a migration process via the strangler fig technique, along with a zero-downtime strategy, had been planned out before development activities started.

      Event Infrastructure: The Kafka event streaming layer was implemented and set up for the dual-write scenario, where the same data was written to both the existing system and the new payment system. Consistency of data in both systems was verified before moving any traffic.

      SEPA Instant Engine: The SEPA Instant processing engine was built and tested against ISO 20022 standards, VoP requirements, and the 10-second processing SLA. Certification with European clearing houses was completed in this phase. First live transactions ran through the new engine before full migration began.

      Orchestration and Traffic Migration: Smart routing, failover capabilities, and bulk payment capabilities were implemented. Migrations took place incrementally based on transaction types, while the old platform continued to deal only with the unmigrated transaction volume.

      DORA Compliance and Operations: Monitoring in real time, incident detection, and audit trails immutability were enabled. The dashboard operations, reconciliation, and regulatory reporting tools were installed. The results of the full DORA gap analysis showed that all the requirements for operational resilience had been fulfilled.

      Full Migration and Decommission: Transaction traffic was transferred to the new payment layer. The legacy payment system was put in read-only mode. Final validation for compliance with DORA was done.

    • The approach involved the use of AWS native cloud infrastructure and the payments engine based on open standards:

      Core Services: Java 17, Spring Boot, microservices architecture

      Event Streaming: Apache Kafka

      Payment Standards: ISO 20022, SEPA SCT Inst, Verification of Payee (VoP)

      Database: PostgreSQL (transactional), Redis (caching/idempotency), ClickHouse (analytics)

      Cloud Infrastructure: AWS — EKS, RDS, MSK, CloudWatch

      Security: PCI DSS-compliant architecture, AWS KMS, tokenization, WAF

      Monitoring: Datadog, AWS CloudWatch, immutable audit logging

      DevOps: Kubernetes, Helm, GitHub Actions CI/CD, blue-green deployment

    Value Delivered

    Jelvix modernized the client’s payment infrastructure by addressing compliance loopholes and resolving bottlenecks in their processes.

    1. Regulatory Compliance

      SEPA Instant and DORA requirements were met before the regulatory cutoff, with no penalties or license risk.

    2. Operational Visibility

      The payments team now has operational visibility for the first time in more than a decade.

    3. Cost Efficiency

      Cloud-native microservices architecture reduced cost-per-transaction significantly, restoring margin against cloud-native competitors.

    4. Platform Scalability

      Adding a new payment rail or onboarding a new jurisdiction requires configuration, not rearchitecting.

    Project Results

    The modernized payment platform gave the client full control over their payment operations, delivering regulatory compliance and real time payment processing.

    • SEPA instant payments SLA is met for every transaction, 24/7/365, from day one of go-live.

    • Cloud-native architecture and automation reduced infrastructure and operational costs across all payment volumes.

    • Routine reconciliation and monitoring that took 40%+ of the team’s capacity now run without human intervention.

    • The vast majority of transactions are reconciled automatically without manual intervention.

    • Complete migration from legacy to modern payment layer without a single transaction interruption.

    • All operational resilience requirements were closed before the regulatory deadline.

    • Up to 50%
      Lower Transaction Costs

    • 40%+ Reduction in Manual Work

    • Full
      DORA Compliance Achieved

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