How did Google cloud helped PayPal manage its transaction surge ?

Today's story is about a company who is the flagbearer of Internet based payments in the world.

Yes, we are talking about PayPal.

PayPal, is a pioneer in online payments, it was world's first company to move money over Internet.

With 377M+ active accounts in 200 markets, PayPal processed over $936B in total payment volume (TPV) in 2020. Global impact at scale.

In previous years, total payment volume (TPV) was growing at 25% annually.

However, due to a significant surge in digital commerce and user traffic triggered by the 2020 pandemic, Pay Pal struggled with smooth payment processing due to which they decided to move towards Google's cloud computing services. Here we will talk in depths about the challenge PayPal faced and why did they decide to move towards cloud service, the strategy it made and also how it executed it.

Then we will see finally how did google cloud positively impacted its business and what we as a business need to learn from PayPal.

The Challenge Pay Pal faced/ The 2020 pandemic challenge

This story starts in early 2020, the world was fighting a deadly pandemic caused by Covid-19, from shopping malls, to restaurants everything was shutdown.

This caused a really big spike in online transactions as offline transactions were to be avoided. Due to this significant uptick in digital commerce and user traffic PayPal struggled with smooth payment processing.

PayPal was handling transactions entirely on-premises and in its own data centers, it had to build onto its infrastructure to prepare for peak transaction load and maintain it at all times.

The Strategy

PayPal took a big decision to move to cloud and that too in the middle of a pandemic. But, things like cloud migration are not a simple affair, it involves a high degree of risk and can cause disruption in day to day business activities.

Hence, PayPal hired technology consulting firm Deloitte to make a robust strategy for cloud migration. They took some and defined a multiyear change in its infrastructure strategy, which means they would be doing changes in multiple phases and not at once altogether.

PayPal's mission was to to drive the exit of its non-strategic data centers and move to zero data center ownership, which means PayPal expected to completely shut down one of its Salt Lake City data centers by the end of 2021.

Migration to cloud

Deloitte provided assistance in migrating PayPal's workloads onto Google Cloud by not only helping to define PayPal’s overall migration strategy but also by providing additional engineering support.

Manual effort was minimized through the design, development, and implementation of automation scripts, reducing PayPal’s migration timeline.

At present around 20% of PayPal's core infrastructure is now on Google Cloud, with ongoing plans for multiyear cloud transformation and advanced analytics.

How cloud migration positively affected Pay Pal

After the move to Google Cloud, the PayPal team saw immediate improvements. While the process of adding capacity to an on-premises infrastructure typically takes months, with?Google Cloud, PayPal was able to do three month’s worth of work in just hours.

They Seamlessly handled the pandemic and holiday season transaction surges in 2020. During peak traffic times, like Black Friday and Cyber Monday, PayPal processed 1,000 payments per second.

Google Cloud helped manage these high-traffic events by staggering workloads while also scaling up or down to manage off-peak times effectively.

PayPal's shift to Google Cloud also reduced infrastructure maintenance costs. Flexible scaling met changing demands, saving resources. They experienced significant cost savings over what it would cost for peak volumes on-premises

Key takeaways

1. PayPal did the right thing by taking some time to reflect on making a new strategy for its customer's needs.

1. Instead of doing cloud transition by themselves they outsourced technology consulting firm Deloitte who has experience and skilled talent for making a cloud migration strategy and experience and expertise as well.

1. Instead of doing a single standalone transition, they did a multiyear change, one by one which allowed them to experience the change then test it and then mindfully taking the next step.

Sources - Google cloud blog, LLMs

This was the end the our weekly insights, where we got to know the inside story of a successful cloud migration in PayPal and how it significantly improved their offering to their customers. See, you next week with a new insight.

About Us : Nextedge labs is an IT and Software development firm, we offer, different kinds of service, like UI Design, Mobile and web application development, Cloud applications and transitions etc. Know more about us here - https://www.nextedge.consulting/