Open API driven digital innovations

published Jan 23, 2017
4 min read


Open API driven digital innovations as differentiators in merchant payments.

Everyone knows that merchant payments and card acquiring offers are highly commoditised today. When merchants select a payment provider usually considers two factors: price and customer experience.

Multi-channel merchants have more ways to interact with customer than ever, but they need to translate these interactions into a POSITIVE CUSTOMER EXPERIENCE. They need to CAPTURE CUSTOMER FEEDBACK and constantly MEASURE the gap between the expected customer experience and what is actually delivered during digital shopping journeys.

 It is not surprising that with a growing complexity of channels:

  • only 22 % of consumers say the average retailer understands them as an individual, and
  • only 21 % say the communications they receive from the average retailer are “usually relevant.
  • 88 % of merchants say their growth depends on personalizing the customer experience – but lack the resources and expertise to design an improved customer journey.
  • Only 37 % believe they have the tools they need to deliver exceptional customer experiences.

But the danger may come in focusing solely on one part of the experience. Only 22% of the companies surveyed by E-consultancy and Seren (Foviance) had an integrated strategy to improve the customer experience.

 To keep up with the changing landscape of ecommerce, social commerce, and mobile payments, all businesses start to pay attention to all data gathered, including demographics, in-app behaviors, data trends, and more. Merchants can engage even with card customers and let them see available discounts when they are in or near their locations and also to confirm risky transactions.

 For payments and non-payments companies, new merchant services are attractive areas for growth. There are several ways how payment providers can help merchants improve customer experience with new functionalities like payment data analytics, advertising and loyalty programs.

Card acquiring and merchant services increasingly tend to attract new FinTech entrants. Their solutions help merchants drive personalized interactions and improve buying decisions. HOW? They are floating customized app solutions on cloud services so that they can access and leverage API data to provide more insights into consumers’ buying habits.


 Digital transformation, increasingly dematerializing plastic cards offer several innovative ways for a powerful communication between customer and merchant. For example, Feedback, a service launched by Square in may 2014 provides fresh way of looking at an old problem of letting customers offer comments on their shopping experience. It let businesses get and act upon feedback from customers through their digital receipts. If a business decides to use Feedback, customers is prompted to answer the question “How was your experience?” with either a smiley or frowny face when they receive their receipt by text or email. Businesses are able to respond to customers on an individual basis. The feature is available to merchants for $15 a month. According to the Wall Street Journal Square processed in 2014 10 million digital receipts per month, so the opportunity to facilitate the building of those relationships is substantial.

 New global merchants such as Uber, Netflix, and Airbnb, built the success of their services on openness. They expect an open technical setup also from their solution providers. This puts pressure on payment providers to keep up with Open API economy.

The Open API driven digital innovations focused on building positive customer experience represent attractive revenue opportunity for the entire merchant payments ecosystem.

Major card schemes MasterCard and VISA fully aware of Open APIs driven opportunities are un-bundling full suite of their products and services and giving developers open access to the underlying payment capabilities.

MasterCard Worldwide announced in 2016 the release of its Open Application Programming Interfaces (Open APIs) for third-party and independent software developers around the world. Josh Peirez, Chief Innovation Officer, MasterCard Worldwide said: “We are excited about tapping into the ingenuity of software developers around the globe to help create the next generation of game-changing payment applications. We feel this will unleash innovation within our industry especially in the burgeoning areas of e-commerce and mobile payments.

Visa announced in February 2016 the launch of its global developer engagement program that includes the creation of a marketplace enabling financial institutions, merchants and technology companies to collaborate, share and search for innovative digital commerce applications and services. VISA opened more than 150 proprietary APIs to outsiders. These include such services as Visa Checkout, Visa Alerts, and the Visa Direct person-to-person payments app.
Visa Inc, Rajat Taneja, executive vice president of technology, said: “We believe this will lead to the creation of entirely new commerce experiences with Visa technology integrated to enable greater security, scale and convenience when it comes time to pay. When you add the ability to distribute those new experiences across Visa’s global network, you can see why Visa Developer will become the preferred playground for developers everywhere.



 And what are the challenges for payment processors and payment solution providers connected with Open Architecture?

According to Wolfgang Berner, ACI Worldwide: “Software developers – regardless of whether they are on the merchant side or developing payment solutions for payment providers – have high expectations when evaluating a potential service. They expect the initial positive feedback in the first five minutes, the first success within 20 minutes, and a complete sketch for a solution within 45 minutes. If it does not deliver, the option will simply be discarded. Not being able to deliver the essential technical setup that is now expected can present a major obstacle to growth, and stop the pitch process for a payment technology provider before it has even begun. The ACI Worldwide UP eCommerce Payments API reflects the shifts in market expectations that have occurred in recent years. A single, unified API ensures simple integration and streamlined processes, as well as automated merchant on-boarding. We acknowledged, in the course of developing the API, that the technical platform alone is not enough. When an API evaluation is expected to yield results within minutes, it must be accompanied by intuitive and interactive tutorials. Developers now expect interactive documentation that gives instant access to the payment system, and is capable of providing real-time feedback and showcasing the capabilities of the API. A 100-page PDF just does not cut it. Just as websites wish to maximize the conversion rate of online shoppers, interactive documentation needs to guide developers through the evaluation process and convince them that the API will deliver the tools they need. This is what we call “developer conversion,” and this is a concept that we had in mind in developing our own developer documentation.

How are traditional card acquirers, banks, PSPs, ISOs & payment networks capitalizing on this opportunity? Are they doing enough to help merchants create a more customer centric experience, shorten the buying cycle, increase loyalty and retention, and boost customer life-time value?

How do they face the challenge of disruptive services being launched by innovative FinTech companies? Forward-looking payment providers aren’t writing off startups as threats. Instead, they’re finding new ways to collaborate with them. Starting with recognizing a need for building a collaborative culture, they can look to address customer expectations and working with other businesses to make their services ready for Multi- & Omni-channel commerce.

Merchant payments, Open Platforms & API driven digital innovations with FinTech companies are among the key topics to be discussed at the MPE 2017, the Top European merchant payments, POS and card acquiring event featuring 300+ CXOs and MDs, 150+ speakers, 1000+ of participants from 40+countries, 70+ sponsors & exhibitors. MPE 2017 is 1 BIG expo with 3 parallel conferences, MPE top class networking & evening dinners; Internationally recognized MPE Awards, MPE C-Level Club, Festival of European online merchant payments and Innovation Corner. MPE 2017 topics span from ACH payments, Apple, Samsung, Android Pay to integrated shopping experience, NFC, from FinTech to RegTech, SmartPOS, mobile & online checkout conversion, CNP Fraud & security, IoT, biometrics, local and cross border acquiring. 

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