Recently, three of the world’s biggest financial services firms—Mastercard, Visa and Citi—have promised to ditch their insular approach and open up their platforms to partners. APIs in Payments has become the forefront of Bank strategies to not only retain but grow market share, grow traction and loyalty, and get back to a value-add growth path of deserved increased revenue & profits. Software leader CA Technologies is working with leading financial companies on their API strategies, and PayX is working hand in hand with the CA’s API Academy to ensure maximum industry applicability and traction is achieved along least resistance paths. The upcoming API360 Summit in London on 18th November—including a speech by Adrian Hausser, PayX CEO—will give the banking industry a comprehensive set of updates covering strategy, case studies and technologies involved.
The Holy Grail for Banks, Merchants and Consumers?
The Banks payments system businesses, Issuing and Acquiring are under increased pressure of commoditisation from many directions. Merchants and Retailers alike need to continue to strive for that extra competitive edge and extra profit. Consumers are demanding a powerful smooth experience and are hungry to enhance their lives through more smart electronic interactions across all devices.
The Holy Grail is for the Banks to turn from decreasing margins and commoditisation through to value pricing with increasing market share, Merchants to utilise their Banks to increase the efficiency and quality of their business to increase revenue and profits, for Consumers to be guided smartly by their devices through the ever increasing swamp of noise towards options that apply to them, less effort and better results that match their personal needs and aspirations.
Clearly Banks do not know Merchants businesses as well as Merchants, and Merchants do not know Payments like Banks, and Consumers do not have access to the data assets and capabilities to maximise the smarts they want. So today each insular island looks longingly at the other “wishing they were just that bit smarter”.
APIs go along way to opening each insular island to peer inside and self serve themselves to do what they wished the other would do for them. Collaboratively and with the assistance of smart third party innovation facilitators this whole work starts to blend and the opportunities to deliver to the Holy Grail become real. Exciting times!
But, what exactly are APIs?
Technically Application Programming Interfaces (APIs) are the building blocks that enable the development of programs (web and mobile applications) that allow software to talk to each other (typically across the internet). From a business perspective organisations can profit enormously (take Apple for example) from opening up their platforms and data so that diverse partners can utilise blends of functionality to reuse in exciting new business propositions.
How are these APIs being used to move the payments industry forward?
The landscape of the payments industry is radically shifting. Payments and Commerce are merging and Commerce has a huge increase in players in the ecosystems. So much so that no organisation can have sight and capability to service the demand and opportunity by themselves. Just one example is the huge rise in online and mobile payments. So much so that over 40% of US small businesses have already adopted Mobile Card Readers (source: Cogent Reports at Market Strategies International). This adoption rate opens major opportunities and challenges for payments providers especially banks and processors. Simply put APIs allow partner communities of businesses and developers to bring new value-add propositions to market at an exponential rate and hence is a critical element in the maximising opportunity in these payments disruptive times.
Developers are becoming empowered to create multi-channel commerce applications & services that are customisable to support customers across traditional POS, mobile and eCommerce touch points. Combining APIs from different partners in an ecosystem enables innovators to create new value-add capabilities that service parties in the ecosystem.
Clients are being enabled to offer banking services in their applications, allowing the easy and secure acceptance of funds, whilst mobile card readers allow clients to accept credit card payments in person. Recurring revenue businesses can automate billing as taking payments becomes ever easier.
Merchant portals are utilising APIs to allow clients access to real-time data. This in turn not only enables clients to increase profits and cut costs, but also simultaneously lessens the risk for acquirers.
Emerging areas such as mobile, Big Data, cloud and the Internet of Things mean now is the time to innovate. Fast thinking businesses can propel their organisation forward through the introduction of sustainable and secure APIs.
To learn more on API strategy visit the API360 Summit 18th November in London. Register to attend the free summit here