By Kate Fitzgerald, Emerging Payments Editor
As a growing number of payments technology providers discover the power of an application programming interface (API) to drive product adoption, best practices for developing effective payments APIs also are emerging, according to a panel of experts speaking last week at the All Payments Expo (APEX) in Las Vegas. The API movement overall is playing a key role in advancing development of mobile banking and e-commerce apps and speeding up the internal sales cycle for new products.
Technology providers are creating APIs to streamline and speed up the process for third parties integrating new software and services into their operations, typically by offering a set of open specifications on how various software components should work together. Dan Schatt, a San Francisco-based payments consultant and the panel moderator, told APEX attendees on March 3. Not all APIs are alike, but a few examples getting kudos from payments industry users are helping to shed light on what works best, he suggested.
Mitek Systems Inc., the San Diego-based maker of mobile check-imaging technology for remote check deposit services, recently developed an API that’s being welcomed by many of its clients, according to APEX panelist Mike Strange, Mitek chief technology officer. The Mitek app “genericizes” integrating its mobile check-imaging technology with an organization’s existing offerings, he said.
Western Union also is using an API to more easily extend its money-transfer and consumer bill-payment products to client organizations, according to panelist David Thompson, Western Union executive vice president, global operations and chief information officer. “Our API helped us open up our platform to allow other financial institutions to offer a service certain smaller and local banks couldn’t do so easily on their own,” he said.
Lending Club, which provides a third-party consumer lending service to mostly smaller financial institutions, also is leaning on APIs to deliver its products quickly to end users. “We built pipes into data sources and created an open architecture that allowed other service providers to tap into our offerings,” explained Jeff Bogan, head of institutional group for San Francisco-based Lending Club.
Speeding Up the Sales Cycle
Other payments industry players suggest APIs are helping to dramatically cut the time needed to implement new technology on a broad range of platforms.
InComm’s API for Cashtie, its platform introduced last year linking retail cash payments via an existing POS system to software applications, has reduced the time needed for implementing a software platform from months to a couple of weeks, Thomas Cornelius, InComm senior vice president, tells Paybefore. “Aside from detailed documentation testing tools, our Cashtie API provides developers with a ‘sandbox environment’ and a ‘live console’ for them to simulate and instantly test the Cashtie capabilities so a company can see quickly how a solution will work once Cashtie is integrated into their own product environment,” Cornelius notes. In addition to helping clients implement a solution quickly, the Cashtie API enables them to create demo versions to use in an organization’s internal sales process, showing how the actual prototype leveraging Cashtie would work for their own products, according to Cornelius. “This changes the old way of selling through RFP’s and ultimately shortens the evaluation and sales cycle, which helps everybody,” he points out.
A key to success for payments technology companies developing APIs is to think like the end user, Mitek’s Strange observed. “The goal is to help organizations get ahold of innovative technology quickly … and then create a great opportunity for innovation and differentiation for those users.”