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How the Cloud kernel is revolutionizing the payments industry?

August 7, 2023


When we speak about the EMV and level 2 kernels (contact/ contactless), we expect them to be embedded inside the POS terminals. But times have changed with the introduction of Cloud Kernels.

The cloud kernels reduce the cost and time of launching your terminals in the market.

The question is if it has so many advantages, why are the terminal vendors hesitant to implement it? Some of the reasons could be:

  1. Latency - The transactions will get completed faster if the Level 3 application and the cloud kernel are connected through a good Internet connection. Still, there might be a questionable delay when conducted through 3G/ 4G network, which can result in latency.
  2. Security - In addition to the EMV secure protocols, you should get PCI DSS certification to transfer the card and cardholder information to the cloud securely.
  3. L2 Certification - When the cloud kernel was first launched, we had only a small number of kernel vendors that had cloud kernel certification. This is one of the reasons for lower adoption. However, the payment schemes and EMVCo have started supporting the cloud initiative and upgraded the L2 certification process to support different parts of the L2kernel running on different platforms.
  4. Internet - Yes, without the internet cloud kernel will not work as the transaction must pass through the kernel.
  5. Contactless kernel certification - As far as we know, the payment brands restrict themselves from providing L2 certificates to cloud-based level 2 contactless kernels if the EMV kernel is not performing at the expected levels based on the transaction speeds.

Discounting these slim negatives, one should consider the advantages of using cloud kernels carefully. Let us list them below:

  1. Reduced Cost of EMV Level 2 Certification Process – Once you receive the L2 certification for the cloud kernel, you will have to get certification only for the L3 application when you integrate your L3 application with the kernel. With this process in place, you don’t have to go through the complete L2 certification process, which includes getting the certification for the entire device and the kernel platform - saves a lot of time in bringing the terminal to the market.
  2. Easy patching of the Config Files - As the kernel is running in the cloud, if there is an update/ change in the kernel config files, it can be directly patched in the cloud instead of pushing it individually. Like in the embedded kernels, you must complete regression testing before the kernel is patched. Besides this, it is also easy to roll back the patch if any unexpected performances occur.
  3. Reduced hardware dependency - In the present scenarios, the L2 kernel runs only in the OS platform where it is ported. If you need to port to any other OS platform, the L2 testing and certification should again be done from scratch, which is not the case with cloud kernels as it is not dependent on the hardware OS.
  4. Easy to troubleshoot in case of transaction errors - In the current terminal integrated kernels, storage limitations exist in storing and fetching the transaction logs. This is not the case with cloud kernels, as there are no restrictions in data storage.
  5. Test tools for Certifying the Cloud Kernel - The same test tools and scenarios that you used for testing embedded kernels can be used to test cloud kernels
  6. Avoid Memory issues - In the present scenarios, the L2 kernels are running on the terminal side in the L1 memory. Suppose the terminal vendor wants to add one more kernel in the same terminal, and if the memory is insufficient, the terminal vendor needs to upgrade/change the L1. In the cloud kernel, there are no memory restrictions.

With the advancement in cloud technologies and the introduction of cloud POS in the payments business, cloud kernel has matured as a reliable way to reduce your L2 testing and certification costs.

Venkateshkumar Thirumalaisamy

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