Why should businesses pay attention to edge computing?

With the increase in data breaches, it’s not just consumer confidence that is being affected. Governments are also beginning to take notice, and impose stricter regulations on how, where and when companies can store customer data. As cross border commerce continues to grow, merchants looking to take advantage of that growth to scale globally should be future-proofing their infrastructure with edge computing.

What is edge computing?

Edge computing is a distributed IT architecture in which data is processed as close to the originating source as possible. Traditionally, data was stored in a central data center, but with the sheer amount of data existing in today’s world, this gives way to latency issues, bandwidth limitations, disruptions to the network, and cybersecurity concerns. 

Now, with edge computing, a portion of the storage, resources and processes are moved out of the central data center, and moved closer to the source of the data itself so that the work is performed where the data is generated. In payment terms, this would mean card data is processed locally at “the edge” and then sent back to the main data center. 

As Stephen Bigelow, a journalist at TechTarget, defines it, “the principle is straightforward: If you can’t get the data closer to the data center, get the data center closer to the data.”

Why should leaders pay attention to edge computing?

According to McKinsey and Co., data regulation is taking center stage around the world – over 60 countries reported data protection localization requirements in 2021, meaning edge computing might soon become an operational necessity for many organizations. 

It is projected that spending on edge computing in 2025 will reach around $250 billion, and that 26% of servers shipped in 2024 will be deployed at the edge – an increase from 20% in 2019. In fact, Gartner predicted that by 2025, 75% of of enterprise-generated data will be created outside of centralized data centers. 

For businesses, the constantly changing regulations around data handling and localization can be a huge headache. As enforcement continues to get tighter, fines or repercussions for noncompliance can be substantial. One of the key stories emerging in recent years is the Reserve Bank of India barring Mastercard from issuing new debit or credit cards to India’s population for violating a rule that card networks must store Indian payment data solely in India. 

Find out more about Reserve Bank of India’s tokenization regulation and what it means for merchants

Outside of regulation, consumers are increasingly concerned about how their data is used, stored, and transmitted. Digital trust has become more of a focus point for consumers, with many looking for trusted partners or logos to put them more at ease. 

What are the benefits of edge computing?

Two of the key benefits of edge computing are in data sovereignty and edge security. Moving data across national and regional boundaries can pose a range of issues including security, privacy, technological, and other legal issues. Edge computing allows raw data to be processed locally, and have any sensitive data elements obscured, secured, and/or tokenized before sending anything to the primary data center, which may be in another jurisdiction. 

Secondly, edge computing allows an additional layer of data security. In addition to the tokenization mentioned above, edge deployment can be hardened against malicious activities, so that any data that is being sent back to the cloud or data center is secured through encryption. 

According to McKinsey & Co., companies that address issues around data privacy and localization, can have a competitive advantage in a few key areas:

• Optimized customer experience – being able to offer customers a more personalized experience with a brand no matter where they are in the world
• Lower compliance costs – being able to move efficiently between geographies and avoiding getting tied up with regulatory issues and the red tape internally to meet these
• Positioning and reputational advantage – boost customer acquisition and retention by positioning a brand as the guardian of customer data and digital identity

The advantage of edge computing in payment orchestration

Payment orchestration platforms can help merchants overcome the complexities of payments – from deploying and managing multiple payment methods, through to adherence of local data and privacy regulations. Payment orchestration providers can work in conjunction with edge computing to provide payment solutions that have customer data stored locally, and therefore compliant with local privacy and data laws, while also able to be easily used across multiple continents and countries, as well as being standardised across the world.

An infrastructure-first solution built natively in the cloud gives merchants the tools and features they need built into their own individualized cloud instances that they can quickly spin out as an ‘edge’ to new locations, adding new and localized payment services through a single universal API. 

It also enables merchants to enter new markets by creating edge Instances within a chosen country or region, keeping transactions and data secure within a local, unique edge that is compliant with local sales and privacy regulations. Unlike the shared tenancy SaaS platforms offer, an IaaS provider offers a single-tenant cloud infrastructure which reduces points of failure to ensure a merchant never loses a transaction. 

Merchants will not share infrastructure or server loads with other merchants meaning there is no risk of slowdown or interference from other merchants, as well as the ability to create bespoke deployments to improve regional storage. IaaS is not a ‘one deployment fits all’ solution – merchants have their own private payment infrastructure customized to meet their individual needs.

To find out more about how Gr4vy, a cloud-native IaaS payment orchestration platform trusted by companies globally, can help you reduce and simplify your regulation and compliance burden, and offer you security with unrivalled flexibility for all of your payments, get in touch with our team.