UPI-Like Transaction Switching: Build a Payments Router with Kafka + gRPC

Modern real-time payments systems, such as India’s UPI depend on high-throughput, low-latency switching infrastructure capable of routing millions of transactions per second between banks, PSPs, apps, and verification services. While the real UPI stack is highly regulated and complex, its architectural principles can be recreated using only open-source tools.

In this hands-on workshop, participants will build a miniature UPI-style payment switch using Apache Kafka, gRPC, protobuf, and lightweight microservices. The workshop walks through the core building blocks of any real-time payment system: message encoding (ISO-like), routing logic, settlement workflows, and observability. By the end, participants will have a functioning transaction router that simulates payer → switch → payee communication with validations and acknowledgements, mimicking the UPI flow.

Attendees will write code, deploy local Kafka brokers, define protobuf contracts, generate client/server stubs, and instrument the entire switch with logs and metrics. This workshop is designed for fintech developers, backend engineers, students breaking into digital payments, and anyone curious about how UPI achieves scale using open ecosystems.

No prior experience with Kafka or gRPC is required. Just enthusiasm to code and build distributed systems.

1. Understand the Core Architecture of Real-Time Payment Systems

• How UPI-like systems route transactions between participants

• Pull vs push payments, request-to-pay

• Why asynchronous messaging is essential for reliability

2. Build a Payment Switch Using Open Source Tools

• Designing protobuf schemas for payment requests

• Creating gRPC microservices for payer, switch, and payee

• Building routing logic that mimics NPCI-like flows

3. Learn Event-Driven Payments with Kafka

• Producing/consuming transactions

• Handling retries, idempotency, and ordering

• Designing topics & partitions for scalability

4. Implement Validations & Acknowledgements

• Balance check logic

• Settlement ledger simulation

• Response codes and standardization

5. Explore Observability for FinTech Systems

• Using logs/metrics for latency & failure tracking

• Why observability is critical in payment compliance systems

6. Take Home a Fully Working Mini Payments Infrastructure

Participants leave with a runnable GitHub template including:

• Kafka broker setup

• gRPC services

• Routing engine

• Simulated transaction flows