The rise of APIs and the race for consumer loyalty have made payments players think of innovative solutions like never before. This has resulted in a new openness to outside developers. Both in the US and abroad, many organizations are opening up developer portals or joining open banking working groups, either by choice or by regulation.
Open Access Is Spreading
Codes provide unique control for companies when it comes to transaction processing, meaning swiping, dipping, taping, or clicking. Today, they’re becoming open to developers working for these companies or other firms.
Using application programming interfaces, outside coders can get closely involved in an existing payment service and integrate it with a new website or mobile app the developer is working on. For example, PayPal started offering such platform in 2009. Today, open APIs and open developer portals are spreading with rapid advances.
In February 2016, Visa launched Visa Developer, giving access to 155 APIs, including those for Visa Checkout and Visa Direct.
In September 2016, Mastercard announced Mastercard Developers, opening developer gateway to critical payments tools.
In October 2016, American Express launched AmEx for Developers, opening its closed-loop developer network to a wide range of developers.
According to George Warfel, general manager for fintech and payments strategy at San Francisco-based consultancy Haddon Hill Group, getting the good developers can be realized only through letting them join an open platform.
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What to Expect from Open Payments Platforms
First, through an open payments platform it’s possible to attract more customers and increase their activity rates. Second, an open platform can account for incremental revenue by selling its API services. Third, an open platform generates data and enables related investment opportunities.
According to experts in the field, the best payments technologies are the ones that will win consumer loyalty, as payments turn from plastic cards into wallets developed entirely with software.
Though the payments business may undergo fundamental changes, one thing never changes: networks must add volume to drive down unit costs. Adding volume in our modern days implies getting the network’s applications embedded in as many third-party apps as possible. As some observer note, emerging technologies like the IoT account for opportunities for volume.
However, developer portals may also have a social purpose. For example, PayPal Holdings Inc. now aims to democratize payments. In November 2009, the company introduced PayPal X, a development platform open to outside developers working on payment applications. Today, through integrations PayPal hopes to make digital payments available for populations that use mostly cash.
When it comes to “open,” it may not be as open as everybody would like: limits, including non-disclosure agreements, exist at some places.