2010 has been an exciting and important year for the payments industry. The emergence of new technology (coupled with the demand for customized services for this new technology) has kept Software Company & Developer communities vigilant in finding the resources they need to service their customers. IP Commerce, the leading open platform for the payments industry, has drawn upon years of experience to provide guidance for Software Company & Developer communities with the Messages from the Edge series. Below you will find a list of all of the Messages from the Edge with a brief excerpt. We hope this series will serve as a resource and be of value going into the New Year, which promises to be just as dynamic and significant as 2010.
One of the most important things happening in payments today is a mounting discussion and associated activity surrounding the topic of “open APIs”. Everyone, from Service Providers to Issuers, is talking about the concept, with hopes of collecting coveted feedback from an increasingly influential target market.
The payments industry is a merchant-centric universe deeply rooted in hardware. Consequently, key players have not given due consideration to Software Companies, – tending to approach relationships with a, “you adjust to meet me” mentality in the form of older machine specifications, lopsided value propositions, disparate processing platforms, limited support and poor documentation, (As a tip, Software Companies are not VARS!)
Choice is about finding fresh routes to reach new customers and offering compelling reasons to keep existing ones. But choice in payment services and providers presents some unique challenges for Software Companies – who are experts in their application workflow, but do not want to become experts in payments.
If you want to treat Software Companies as true partners, and you want to be in the Payments API space, you have to ensure that your people and process treat the Software Company as a valued member of your ecosystem. The process of truly supporting those integrating to, and distributing, your services demonstrates your commitment to the market and to the technology.
The key to successful integration support is striking a balance between availability and flexibility. The first, and perhaps most important, is simple availability. Ensure that your Software Company partners (You are viewing them as partners at this point, right?) are able to obtain the support they need…when they need it.
There is a danger inherent in offering open APIs to the developer community. Time after time, in all industries, companies are caught in the trap of assuming that their responsibility is complete at the time a Software Company or Developer successfully leverages their APIs to complete an integration.
Integration, however, is only the beginning.
**News flash for payment service providers**
Your payment service is not the single most important thing to the Software Company.
Payment services, particularly bankcard services, are commoditized. Software Companies require payment services, but they have a vast amount of choice when determining which commodity to leverage. This commoditization is, in part, the result of payment service providers inability (both from a business and technical perspective) to offer and promote the value-added services (VAS) that supplement the transactional lifecycle.
The combination of payment services, value-added services, policy governance, and the “business rules” that govern the lifecycle of the transaction are of increasing importance to the Software Company looking to build new workflows. Software Company time and effort, a scarce resource, is oft-driven not only by technology curiosity but also through a tangible need of their customer.
The legacy paradigm in payments of static consumer data is being changed to a modality of dynamic data and dynamic interactions. Federated Identity services are what is enabling and driving this change…without it, your payment API is lacking a key component to successful adoption.