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PayPal System Design Interview Questions

A comprehensive prep guide to PayPal System Design Interview Questions. Strengthen your understanding of distributed systems and excel by practicing with real-world interview questions.

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PayPal engineers design systems that are resilient, secure, and capable of handling millions of transactions per second. If you're targeting a backend or infrastructure role at PayPal, you’ll need to demonstrate your ability to reason through trade-offs in distributed systems, especially within the context of real-time financial operations. This course focuses on PayPal-specific System Design questions inspired by real production systems. You’ll go beyond generic architectures and explore design problems that mirror the financial, regulatory, and scale challenges PayPal engineers solve every day. Using the RESHADED framework, each question helps you break down high-level goals into modular components, prioritizing availability, data integrity, latency, and security. By the end, you’ll not only be ready to interview at PayPal—you’ll have a deep understanding of how to build financial systems that operate reliably at a global scale.

PayPal engineers design systems that are resilient, secure, and capable of handling millions of transactions per second. If you'...Show More

WHAT YOU'LL LEARN

A structured, modular approach to PayPal System Design Interviews, tailored for high-impact roles.

Techniques to architect complex payment and transaction systems using scalable, microservice-based building blocks

The skills to analyze real-world requirements and constraints, critical for designing infrastructure at PayPal scale

Insight into common System Design questions asked in PayPal interviews, and strategies to confidently navigate them

How to apply systematic thinking to fintech-specific problems, including payment routing, fraud detection, and user authentication

A deeper understanding of how large-scale web services (including financial platforms like PayPal) are built and maintained

A robust, repeatable method for solving novel design problems, with this course serving as a blueprint for PayPal-style system thinking

A structured, modular approach to PayPal System Design Interviews, tailored for high-impact roles.

Content

180 Lessons140 Quizzes

System Design Interviews

5 Lessons

Getting Ready for the System Design Interview

Key Concepts to Prepare for the System Design Interview

Resources to Prepare for a System Design Interview

The Do’s and Don’ts of the System Design Interview

Let AI Evaluate your System Design Interview Preparation

Introduction

2 Lessons

Introduction to Modern System Design

Course Structure for Modern System Design

Abstractions

4 Lessons

Why Are Abstractions Important?

Network Abstractions: Remote Procedure Calls

Spectrum of Consistency Models

The Spectrum of Failure Models

Non-functional System Characteristics

6 Lessons

Let AI Evaluate Your Understanding of Non-Functional Requirements

Back-of-the-envelope Calculations

2 Lessons

Put Back-of-the-envelope Numbers in Perspective

Examples of Resource Estimation

Building Blocks

1 Lessons

Introduction to Building Blocks for Modern System Design

Domain Name System

2 Lessons

Introduction to Domain Name System (DNS)

How the Domain Name System Works

Load Balancers

3 Lessons

Introduction to Load Balancers

Global and Local Load Balancing

Advanced Details of Load Balancers

Databases

5 Lessons

Introduction to Databases

Types of Databases

Data Replication

Data Partitioning

Trade-offs in Databases

10.

Key-value Store

5 Lessons

System Design: The Key-value Store

Design of a Key-value Store

Ensure Scalability and Replication

Versioning Data and Achieving Configurability

Enable Fault Tolerance and Failure Detection

11.

Content Delivery Network (CDN)

7 Lessons

System Design: The Content Delivery Network (CDN)

Introduction to a CDN

Design of a CDN

In-depth Investigation of CDN: Part 1

In-depth Investigation of CDN: Part 2

Evaluation of CDN's Design

Quiz on CDN's Design

12.

Sequencer

3 Lessons

System Design: Sequencer

Design of a Unique ID Generator

Unique IDs with Causality

13.

Distributed Monitoring

3 Lessons

System Design: Distributed Monitoring

Introduction to Distributed Monitoring

Prerequisites of a Monitoring System

14.

Monitor Server-side Errors

3 Lessons

Design of a Monitoring System

Detailed Design of a Monitoring System

Visualize Data in a Monitoring System

15.

Monitor Client-side Errors

2 Lessons

Focus on Client-side Errors in a Monitoring System

Design of a Client-side Monitoring System

16.

Distributed Cache

6 Lessons

System Design: The Distributed Cache

Background of Distributed Cache

High-level Design of a Distributed Cache

Detailed Design of a Distributed Cache

Evaluation of a Distributed Cache's Design

Memcached versus Redis

Distributed Cache System

Mock Interview

17.

Distributed Messaging Queue

7 Lessons

System Design: The Distributed Messaging Queue

Requirements of a Distributed Messaging Queue’s Design

Considerations of a Distributed Messaging Queue’s Design

Design of a Distributed Messaging Queue: Part 1

Design of a Distributed Messaging Queue: Part 2

Evaluation of a Distributed Messaging Queue’s Design

Quiz on the Distributed Messaging Queue’s Design

18.

Pub-sub

3 Lessons

System Design: The Pub-sub Abstraction

Introduction to Pub-sub

Design of a Pub-sub System

Pub-Sub

Mock Interview

19.

Rate Limiter

5 Lessons

System Design: The Rate Limiter

Requirements of a Rate Limiter’s Design

Design of a Rate Limiter

Rate Limiter Algorithms

Quiz on the Rate Limiter’s Design

20.

Blob Store

6 Lessons

System Design: A Blob Store

Requirements of a Blob Store's Design

Design of a Blob Store

Design Considerations of a Blob Store

Evaluation of a Blob Store's Design

Quiz on the Blob Store's Design

Blob Store

Mock Interview

21.

Distributed Search

6 Lessons

System Design: The Distributed Search

Requirements of a Distributed Search System's Design

Indexing in a Distributed Search

Design of a Distributed Search

Scaling Search and Indexing

Evaluation of a Distributed Search's Design

22.

Distributed Logging

3 Lessons

System Design: Distributed Logging

Introduction to Distributed Logging

Design of a Distributed Logging Service

23.

Distributed Task Scheduler

5 Lessons

System Design: The Distributed Task Scheduler

Requirements of a Distributed Task Scheduler's Design

Design of a Distributed Task Scheduler

Design Considerations of a Distributed Task Scheduler

Evaluation of a Distributed Task Scheduler's Design

24.

Sharded Counters

4 Lessons

System Design: The Sharded Counters

High-level Design of Sharded Counters

Detailed Design of Sharded Counters

Quiz on the Sharded Counters' Design

25.

Concluding the Building Blocks Discussion

4 Lessons

AI Evaluation of Building Blocks in E-Commerce Platform

AI Evaluation of Building Blocks in Online Education System

Wrapping Up the Building Blocks Discussion

The RESHADED Approach for System Design

26.

Design YouTube

6 Lessons

System Design: YouTube

Requirements of YouTube's Design

Design of YouTube

Evaluation of YouTube's Design

The Reality Is More Complicated

Quiz on YouTube's Design

TikTok

Mock Interview

27.

Design Quora

5 Lessons

System Design: Quora

Requirements of Quora's Design

Initial Design of Quora

Final Design of Quora

Evaluation of Quora’s Design

28.

Design Google Maps

6 Lessons

System Design: Google Maps

Requirements of Google Maps' Design

Design of Google Maps

Challenges of Google Maps' Design

Detailed Design of Google Maps

Evaluation of Google Maps' Design

29.

Design a Proximity Service / Yelp

5 Lessons

System Design: Yelp

Requirements of Yelp’s Design

Design of Yelp

Design Considerations of Yelp

Quiz on Yelp's Design

30.

Design Uber

7 Lessons

System Design: Uber

Requirements of Uber’s Design

High-level Design of Uber

Detailed Design of Uber

Payment Service and Fraud Detection in Uber Design

Evaluation of Uber’s Design

Quiz on Uber's Design

Uber Eats

Mock Interview

31.

Design Twitter

6 Lessons

System Design: Twitter

Requirements of Twitter’s Design

High-level Design of Twitter

Detailed Design of Twitter

Client-side Load Balancer for Twitter

Quiz on Twitter's Design

32.

Design Newsfeed System

4 Lessons

System Design: Newsfeed System

Requirements of a Newsfeed System’s Design

Design of a Newsfeed System

Evaluation of a Newsfeed System’s Design

33.

Design Instagram

5 Lessons

System Design: Instagram

Requirements of Instagram’s Design

Design of Instagram

Detailed Design of Instagram

Quiz on Instagram’s Design

NewsFeed

Mock Interview

34.

Design a URL Shortening Service / TinyURL

6 Lessons

System Design: TinyURL

Requirements of TinyURL's Design

Design and Deployment of TinyURL

Encoder for TinyURL

Evaluation of TinyURL's Design

Quiz on TinyURL's Design

35.

Design a Web Crawler

5 Lessons

System Design: Web Crawler

Requirements of a Web Crawler's Design

Design of a Web Crawler

Design Improvements of a Web Crawler

Evaluation of Web Crawler's Design

36.

Design WhatsApp

6 Lessons

System Design: WhatsApp

Requirements of WhatsApp’s Design

High-level Design of WhatsApp

Detailed Design of WhatsApp

Evaluation of WhatsApp’s Design

Quiz on WhatsApp’s Design

Facebook Messenger

Mock Interview

37.

Design Typeahead Suggestion

7 Lessons

System Design: The Typeahead Suggestion System

Requirements of the Typeahead Suggestion System’s Design

High-level Design of the Typeahead Suggestion System

Data Structure for Storing Prefixes

Detailed Design of the Typeahead Suggestion System

Evaluation of the Typeahead Suggestion System’s Design

Quiz on the Typeahead Suggestion System’s Design

38.

Design a Collaborative Document Editing Service / Google Docs

5 Lessons

System Design: Google Docs

Requirements of Google Docs’ Design

Design of Google Docs

Concurrency in Collaborative Editing

Evaluation of Google Docs’ Design

39.

Spectacular Failures

4 Lessons

Introduction to Distributed System Failures

Facebook, WhatsApp, Instagram, Oculus Outage

AWS Kinesis Outage Affecting Many Organizations

AWS Wide Spread Outage

ChatGPT

Mock Interview

40.

Concluding Remarks

1 Lessons

Conclusions

Certificate of Completion

Showcase your accomplishment by sharing your certificate of completion.

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Personalized Interview Prep

Skip the LeetCode grind with a custom roadmap that adapts to your goals. Hands-on practice for Coding Interviews, System Design, and more.

Mock Interviews

Test your skills in a simulated interview setting. Receive personalized feedback based on your performance. Available for Coding Interviews, System Design, and more.

AI Prompt

Build prompt engineering skills. Practice implementing AI-informed solutions.

Code Feedback

Evaluate and debug your code with the click of a button. Get real-time feedback on test cases, including time and space complexity of your solutions.

Explain with AI

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AI Code Mentor

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Frequently Asked Questions

What is the structure of the System Design interview at PayPal?

PayPal’s System Design interviews test your ability to design secure, scalable, and high-performance systems, often centered on payment processing and financial reliability. Overall, candidates are expected to design solutions grounded in real-world applications.

Are PayPal System Design interviews hard?

Yes. They’re challenging and comparable to those at Google or Amazon, focusing heavily on secure, scalable financial systems.

How do I study for the PayPal System Design interview?

Start with System Design fundamentals, especially for financial systems. Practice common scenarios and review PayPal’s engineering blog for real-world insights.

What are the common mistakes people make in a System Design interview at PayPal?

Common mistakes include neglecting security, skipping scalability trade-offs, overlooking financial reliability, and jumping into solutions without clarifying requirements first.