The Methane Remote Sensing LIDAR Mission (MERLIN) is a joint French-German cooperation on the development, launch and operation of a climate monitoring satellite, executed by the French Space Agency CNES and the German Space Agency DLR. It is focused on global measurements of the spatial and temporal gradients of atmospheric Methane (CH4) with a precision and accuracy sufficient to determine Methane fluxes significantly better than with the current observation network.Merlin is a LIDAR Instrument using the Integrated Path Differential Absorption (IPDA) principle. This instrument principle relies on the different absorption of the laser signal by atmospheric Methane at two laser wavelengths -online and offline -both around 1645 nm, reflected by the Earth surface. The attenuation is strong at the online wavelength; the offline "reference" wavelength is selected to be only marginally affected by Methane absorption. Being an active instrument with its own light source, the MERLIN LIDAR Instrument does not rely on sun illumination of the observed areas and therefore operates continuously over the orbit.Airbus DS GmbH was selected by DLR as the industrial Prime Contractor for the Mission Phase C/D to build the MERLIN Payload, which is the first realization of an IPDA LIDAR for space in Europe. This presentation will concentrate on the Architecture and the Design of the MERLIN Payload, which passed the CDR in 2020 and is now progressing in Phase D. Further details of the instrument development status will be shown by an overview of the current hardware and design status of the major subsystems.A spotlight of this paper will be a finding when performing a low-bandwidth spectral characterization of an Avalanche Photo Diode (APD), which revealed features which were not expected: Next to the known global spatial and spectral variations, the scans have shown an unexpected narrowband spectral dependence, as well as a spatial dependence, which was a factor of two worse than originally expected. Further tests also showed a thermal dependence of the QE related to the APD operating temperature, which strongly exceeded the expected variations.These unexpected effects would have led to a highly increased Radiometric Systematic Error (RSE) in the Differential Absorption Optical Depth (DAOD).The root-cause was identified as an Etalon effect caused by the APD substrate, which in addition varied over the APD due to slight changes in the layer thickness. The effect is strongly field angle dependent, which made a review of the scan setup necessary. Therefore, the setup was adapted via a stepwise increase of the field angle, which reduced the Etalon effect.Consequentially, the Etalon effect as root cause for these observations has been confirmed by experiments, as well as theoretical analysis, which was shown to be in line with the measurement results.