# Payment Processing Integration - Technical Specification
## Security First Architecture
### Compliance Requirements
- **PCI DSS Level 1** compliance mandatory
- No raw card data storage
- End-to-end encryption
- Tokenization for all card data
- Audit logging for all transactions
## Implementation Phases
### Phase 1: Stripe Integration (Week 1-3)
**Task 1.1**: Stripe Connect Setup
```javascript
// Architecture
Client → Backend API → Stripe API
↓
Token Storage (encrypted)
↓
Transaction DB (audit)
```
**Implementation Details**:
- Set up Stripe Connect account
- Implement OAuth flow for merchant onboarding
- Configure webhook endpoints
- Set up idempotency keys for reliability
- Implement retry logic with exponential backoff
**Security Measures**:
- TLS 1.3 for all connections
- API key rotation every 90 days
- Request signing
- IP whitelisting
- Rate limiting per merchant
**Task 1.2**: Payment Intent Flow
```javascript
async function processPayment(orderId, amount, currency) {
// 1. Create payment intent
const intent = await stripe.paymentIntents.create({
amount: amount * 100, // cents
currency: currency,
metadata: { orderId },
payment_method_types: ['card'],
capture_method: 'manual' // auth only, capture later
});
// 2. Store intent ID
await db.savePaymentIntent(orderId, intent.id);
// 3. Return client secret
return intent.client_secret;
}
```
**Task 1.3**: Card Tokenization
- Use Stripe Elements for secure card input
- Never touch raw card data in backend
- Store only payment method tokens
- Implement token lifecycle management
- Handle token expiration gracefully
**Supported Card Types**:
- Visa, Mastercard, Amex, Discover
- Debit cards with PIN
- International cards (200+ countries)
- Digital wallets (Apple Pay, Google Pay)
### Phase 2: PayPal Integration (Week 4-5)
**Task 2.1**: PayPal REST API Setup
- Create PayPal Business account
- Set up REST API credentials
- Configure webhook notifications
- Implement smart payment buttons
- Handle PayPal-specific flows
**Task 2.2**: Fallback Logic
```python
def process_payment_with_fallback(order):
try:
# Try Stripe first (primary)
result = stripe_payment(order)
if result.success:
return result
except StripeException as e:
log_error("Stripe failed", e)
try:
# Fallback to PayPal
result = paypal_payment(order)
return result
except PayPalException as e:
log_error("PayPal failed", e)
raise PaymentFailedException("All payment methods failed")
```
### Phase 3: Fraud Detection (Week 6)
**Task 3.1**: Implement fraud checks
- Velocity checks (transactions per hour/day)
- Amount anomaly detection
- Geolocation mismatch detection
- Device fingerprinting
- IP reputation checking
- BIN validation
**Risk Scoring Model**:
```python
def calculate_risk_score(transaction):
score = 0
# Velocity check
if recent_transaction_count(user) > 5:
score += 30
# Amount check
if transaction.amount > user.avg_transaction * 3:
score += 20
# Location check
if geo_distance(user.location, transaction.location) > 1000:
score += 25
# New device
if not is_known_device(transaction.device_id):
score += 15
# Time of day
if is_unusual_hour(transaction.timestamp):
score += 10
return score # 0-100 scale
```
**Risk Actions**:
- **0-30**: Auto-approve
- **31-60**: Manual review
- **61-80**: Challenge (3DS, CVV)
- **81-100**: Auto-decline
**Task 3.2**: 3D Secure Integration
- Implement 3DS2 flow
- Handle authentication challenges
- Liability shift verification
- Frictionless auth when possible
### Phase 4: Multi-Currency Support (Week 7)
**Task 4.1**: Currency Conversion
- Support 15+ major currencies
- Real-time exchange rates (daily updates)
- Display prices in customer's currency
- Settle in merchant's currency
- Handle currency conversion fees
**Supported Currencies**:
USD, EUR, GBP, JPY, CAD, AUD, CHF, CNY, SEK, NZD, MXN, SGD, HKD, NOK, KRW
**Task 4.2**: Dynamic Currency Conversion (DCC)
- Offer currency conversion at checkout
- Display exchange rate and fees
- Allow customer choice
- Comply with card network rules
### Phase 5: Refunds & Chargebacks (Week 8)
**Task 5.1**: Refund Processing
```javascript
async function processRefund(transactionId, amount, reason) {
// Partial or full refund
const refund = await stripe.refunds.create({
payment_intent: transactionId,
amount: amount, // optional for partial
reason: reason, // duplicate, fraudulent, requested_by_customer
metadata: {
refund_reason: reason,
initiated_by: 'customer_service'
}
});
// Update order status
await updateOrderStatus(transactionId, 'refunded');
// Send notification
await sendRefundNotification(customer, refund);
return refund;
}
```
**Refund Rules**:
- Full refund within 30 days
- Partial refunds for damaged items
- Automatic refund on order cancellation
- Refund processing time: 5-10 business days
**Task 5.2**: Chargeback Management
- Webhook for chargeback notifications
- Evidence submission automation
- Dispute status tracking
- Chargeback analytics dashboard
- Preventive measures based on patterns
**Chargeback Response Flow**:
1. Receive chargeback notification
2. Gather evidence (receipt, delivery proof, communication)
3. Submit evidence within 7 days
4. Track dispute status
5. Update customer account
6. Analyze for fraud patterns
### Phase 6: Reporting & Analytics (Week 9)
**Task 6.1**: Transaction Reporting
- Daily reconciliation reports
- Payment method breakdown
- Success/failure rates
- Average transaction value
- Currency distribution
- Settlement reports
**Task 6.2**: Financial Analytics
```sql
-- Example: Daily payment summary
SELECT
DATE(created_at) as date,
payment_method,
currency,
COUNT(*) as transaction_count,
SUM(amount) as total_amount,
AVG(amount) as avg_amount,
COUNT(CASE WHEN status = 'failed' THEN 1 END) as failed_count
FROM transactions
WHERE created_at >= DATE_SUB(NOW(), INTERVAL 30 DAY)
GROUP BY DATE(created_at), payment_method, currency
ORDER BY date DESC;
```
**Dashboards**:
- Real-time transaction monitoring
- Success rate trends
- Fraud detection alerts
- Settlement tracking
- Chargeback rates
### Testing Strategy
**Unit Tests**:
- Payment intent creation
- Token handling
- Refund logic
- Risk scoring algorithm
**Integration Tests**:
- End-to-end payment flow
- Webhook processing
- Fallback scenarios
- 3DS authentication
**Security Tests**:
- PCI DSS compliance scans
- Penetration testing
- Token encryption validation
- TLS configuration review
**Load Tests**:
- 500 transactions per second
- Concurrent payment processing
- Webhook handling at scale
- Database connection pooling
## Monitoring & Alerts
**Critical Metrics**:
- Payment success rate (target: > 98%)
- Average processing time (< 3s)
- Failed payment reasons
- Fraud detection accuracy
- Chargeback rate (< 0.5%)
**Alerting Rules**:
- Success rate drops below 95%
- Processing time > 5s (p95)
- Fraud score anomalies
- Unusual chargeback spike
- Payment gateway downtime
## Dependencies
- Stripe SDK (Node.js)
- PayPal REST API
- Redis (idempotency)
- PostgreSQL (transactions)
- AWS KMS (encryption)
- Datadog (monitoring)
## Success Criteria
✅ PCI DSS Level 1 compliant
✅ 98%+ payment success rate
✅ < 3s payment processing time
✅ Zero raw card data storage
✅ < 0.5% chargeback rate
✅ Support 15+ currencies
✅ 99.9% uptime