Visa's CTO banks new network on IP protocol

As chief technology officer at Visa International Inc., which handles 35 billion online transactions annually, Scott Thompson is pummeled with pitches about new networked storage technologies that promise to cut workload and bring a higher return on investment.

Thompson has a simple rule of thumb: "There just isn't anything we can buy off-the-shelf to fit Visa's needs."

"To do something at scale the way we do, the determining factor of success is the architecture that people at Visa and other organizations build," he added.

Last autumn, Visa launched its expanded payment-processing network, VisaNet, which serves 14,000 US financial institutions and their cardholders. Thompson chose a networked storage infrastructure based on Internet Protocol, allowing banks to give their customers access to their funds anytime, anywhere, with any device through the Internet.

In a matter of months, Direct Exchange, the network that connects to VisaNet and took two years to build, has grown into the largest private financial payment network in the world. By the time Visa connects all its member banks to the network, it will be handling more than US$1 trillion per year in transactions, Thompson claimed.

William Hurley, an analyst at The Yankee Group, said the technology Visa is using is significant to the banking industry because it addresses the universal problem of capturing a high number of transactions for processing and storing.

"If they're fully doing it over an IP network, they're definitely way ahead of the crowd in the financial community," Hurley said.

Direct Exchange has banks and merchants "lining up at the door" because it lets cardholders buy online through any device, such as a laptop, cell phone or PDA, said Sarah Garrison, vice president of technology at Visa U.S.A.

The cost for banks to implement Visa's Direct Exchange depends on the size and processing needs of the bank. Visa officials said no exact figures are available, but banks can expect a minimal up-front cost and overall long-range savings.

Visa handles payment processing through a clearing network hooked via Fibre Channel to 85 terabytes of EMC Corp.'s Symmetrix storage. Direct Exchange has enabled Visa to increase its processing capacity from 4,000 transactions per second to 10,000 per second over the Internet, and the average response time to a cardholder's request is two seconds, according to Thompson.

When a card holder makes a purchase on the Internet, the information goes through two synchronized data-processing centers, one on the East Coast and one on the West Coast. Linking those centers in near real-time has Thompson and his team "load balancing all day long between the two."

Not only is the mirroring technique good for disaster recovery, cutting restoration time from five minutes to a split second, but it ensures a Visa cardholder's information is always current. Keeping information up-to-date has cut down on fraud because Visa is able to more quickly inform member banks when it suspects a card isn't being used by its proper owner.

Thompson also pointed out that the total network downtime to date has been zero.

He attributed much of the success of Visa's juggling act to meticulous, deliberate planning and having the "Rolls-Royce" of hardware, software and connectivity devices. Visa's payment processing network is powered by EMC's Enterprise Storage Network, including Symmetrix storage arrays, Connectrix switches and Sun Solaris servers. It also uses Oracle Corp. databases and routers from Cisco Systems Inc.

"That's one of the biggest fears, making sure the customer is confident that Visa's network is safe and there's no fraud involved," said Phil Faulkner, EMC's financial services group manager. "That's a big return on investment."

Backup time at the data center was also reduced from between 10 and 15 minutes to 2 to 3 seconds using the Internet, a further return on investment measured in $2 million to $3 million dollars each backup cycle, Faulkner said.

Dane Lewis, an analyst at investment banking firm Robertson Stephens, said storage over IP is a wave that is gaining traction, but there are still issues that need to be resolved with the technology, such as packet drop or heavy overhead moving of data on the network.

"It certainly sounds like [Visa] is down the road somewhat," he said.

Thompson insisted that he doesn't "attempt to go way off the edge in terms of newest and most leading-edge technology."

"We pick tools and technology that works today," he said, "and that's why it works in our system."

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