Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
@DTPaymentNews
Payments networks face a competitive landscape marked by rapid innovation, so the two biggest systems, Visa Inc. and MasterCard Inc., are responding by increasing the access developers have to their once tightly guarded skunk works.
The latest move comes Wednesday from MasterCard, which announced MasterCard Developers. The company is opening a gateway that gives outside developers early access to application programming interfaces for more than 25 MasterCard products and services, including key services like the Masterpass digital wallet, MasterCard Digital Enablement Services, the crucial tokenization factory for mobile payments, and MasterCard Send, the network’s person-to-person payment service.
The broader access also includes APIs for experimental products such as bot commerce and vending applications, as well as software development kits and sample code for each service. The code is available in half a dozen programming languages, MasterCard says.
Why open access so widely? Much of the reason has to do with speeding products to market by harnessing the programming power of thousands of outside developers, Lisa Bongiovi, MasterCard vice president for product management, digital payments and labs, tells Digital Transactions News. “It’s a chance for us to learn and co-innovate with our developers. It’s pretty awesome for us to be able to expose some of these services,” she says.
But there are deeper reasons, as well. MasterCard may be helping out developers by making faster commercialization possible, but the network benefits as well. With such broad access to cutting-edge technology, the network can shepherd new products into existence at lower cost. MasterCard Developers is “unburdening us from the cost of delivery and the cost of supporting the user experience,” notes Bongiovi. “Our developers take care of that.”
And, since the basic economics of running a transaction network hasn’t changed, faster development means more volume sooner for MasterCard. “At the end of the day, isn’t it about volume?” asks George Peabody, who follows digital payments at Glenbrook Partners, a Menlo Park, Calif.-based payments consultancy. “Here’s a way to get that done.”
With constant pressure to build volume and reduce unit costs, networks like MasterCard and Visa see wide-open developer access as an unavoidable strategy. MasterCard isn’t done exposing APIs, Bongiovi says, explaining that another five to 10 will become available by year’s end. The mandate comes from the top. “There’s a rallying cry from our CEO [Ajay Banga, MasterCard’s chief executive],” she says. “He’s mandated that all of our services take an API-first approach. We’ve got a schedule we’re working on.”
MasterCard first opened a limited range of its APIs to developers six years ago, following a similar move by PayPal Holdings Inc., which was then part of eBay Inc. What’s different this time is that the network is throwing in a wide range of SDKs and sample code to smooth things out for programmers, Bongiovi says. “There’s clear developer documentation,” she says. “We’re giving developers a leg up here.”
These lessons aren’t lost on Visa. MasterCard’s bigger rival in February opened its own developer gateway, exposing some 155 closely held APIs, including those for such services as Visa Checkout, Visa Alerts, and Visa Direct, a person-to-person payments app. The gateway also features a so-called sandbox that will let developers test new apps before releasing them into the marketplace.
What the world’s biggest payments brands are recognizing, above all else, is the centrality of the developer as the business ushers in highly tech-dependent services like mobile payments and payments through an Internet of things. “Six years ago was the beginning of the shift toward the developer being the decision-maker,” says Peabody. “Now the developer is in the driver’s seat.”
