There is a lot to talk about in the world of payments right now, but, if we cut to the chase, we see two dominant trends emerging: the rise of the API economy and the elimination of cash and checks in favor of digital payments (often in the form of card-to-card transactions for C2C, B2C and even G2C transactions). In reality, the second trend is enabled by the first, with electronic payments increasingly accessed via Open APIs.
In other geographies, evolution of the payments landscape has been driven by regulatory changes. However, in the US, these changes are primarily driven by rapidly evolving consumer expectations. Consumers have been trained by Google and Apple and others to expect seamless, easy to use, clear, simple interactions – whether it’s on their mobile device or on a web site – and they expect payments to just kind of happen magically.
Consumers have been trained by Google and Apple and others to expect seamless, easy to use, clear, simple interactions…and they expect payments to just kind of happen magically.
This shift in consumer expectations makes good quality design and intuitive user experience really important. Companies, large or small, cannot afford to short change investment in human- centered design and user experience. Ultimately, these are the factors that will make or break product adoption.
Consumer expectations of magical, seamless payment experiences also require increased collaboration between established players and smaller companies. The need for collaboration is often seen as problematic. There is a mythology that fintechs and large established players are somehow at odds with each other, but the truth is no one – neither banks nor fintech – has a corner on all the great ideas for engaging and compelling customer experiences. Those great ideas can arise from anywhere.
No one – neither banks nor FinTech – has a corner on all the great ideas for engaging and compelling customer experiences. Those great ideas can arise from anywhere.
By creating a robust ecosystem of Open APIs like we have done with BBVA Open Platform, we can enable those innovators – whether they are in a big financial institution or in a garage – to bring those great ideas to market faster and more economically than ever before. And, because Open APIs lower barriers to entry, a greater number of ideas can be tried and tested (and sometimes fail). Companies integrating financial solutions can iterate like true Silicon Valley startups, ultimately giving customers a much more robust set of products and services to choose from.
Effective collaboration between established financial institutions and fintech doesn’t just rely on the existence of open APIs. To create successful partnerships, banks also need to stop thinking of fintechs only as potential disruptors and start thinking of them as opportunities to extend their own product development capacity. Forward-looking banks will develop programs to systematically seek out partners with the ideas, products, technology and skills that can fill gaps in the bank’s current product portfolio and can extend its reach across industry verticals in new and exciting ways.
Effective collaboration also works best when you share a common language.
On the flip side, effective collaboration also works best when you share a common language. For their part, companies seeking bank partners need to educate themselves on how the payments ecosystem works. To have a successful partnership with a bank, companies need to understand the bank’s role in the ecosystem and must be able to effectively address the concerns of other banks, processors, networks and regulators.
The API revolution is upon us and Open APIs will be the platform play of tomorrow. Both established players and smaller companies need to be ready to take advantage of the huge possibilities enabled by platforms like BBVA Open Platform in order to continue to meet customer expectations for delightful and amazing experiences.
Head of Product, Open Platform
Susan is a payment, digital commerce and financial services expert, with an unparalleled understanding of what fintech companies navigating this landscape want from an API platform – and how to deliver it. Susan has been working in the financial services sector for more than 25 years, most recently leading the team that created and launched Visa’s Developer Program, a suite of APIs that opened up Visa’s network to all developers, from startups to large financial institutions. A former CTO, Head of Enterprise Architecture and Technology Strategist at Visa, Susan also worked as Chief Operating Officer at Euphorion, a website design and development startup in Silicon Valley, and started her own independent consulting business.