Fintech System Design

Specialized patterns for payment systems, ledgers, and financial platforms at scale

95 minutes

9Detailed Sections

Senior Level

Double-entry bookkeeping: every transaction creates two equal and opposite entries (debit and credit). Ensures accuracy: total debits equal total credits.

Example: user deposits $100 -> debit cash account, credit user deposit liability. For payment: debit user wallet, credit merchant account.

Ensures money never disappears. Database implementation: ledger table with account, amount, transaction ID, timestamp.

Account balances computed from ledger entries. Benefits: immutable audit trail, reconciliation.

Challenges: distributed transactions, consistency. Real-world: Stripe uses ledger model; Wise transfers; Square payments.

Ledger as source of truth; balance is derived state.

Key Takeaways

Core Principle: Every transaction creates debit entry and credit entry (must balance)

Ensures Money Conservation: Total debits always equal total credits

Immutable Audit Trail: Ledger entries never change; changes create new entries

Source of Truth: Account balance is derived from ledger, not stored

Prevents Errors: Double-entry catches unbalanced transactions immediately

Facilitates Reconciliation: Easy to verify accounts and detect fraud

Visual Diagram

Transaction -> Debit entry + Credit entry -> Ledger -> Balance (sum of entries)

All Tutorials Practice Questions

Fintech System Design

Table of Contents

The Double-Entry Ledger: Core Accounting Principle

Key Takeaways

Visual Diagram

Idempotency: Ensuring Safe Payment Processing

Money Representation: Decimals, Currencies, and Precision

Transaction Isolation and Concurrency Control

Reconciliation: Detecting and Fixing Discrepancies

Audit Trails and Regulatory Compliance

Fraud Detection and High-Availability Patterns

Real-World Fintech Architectures and Lessons

Case Studies: Building Trusted Payment Systems