The Magical Mystery API Is Waiting to Take You Away…Waiting to Take You Away

There’s nothing like a good mashup of a Beatles song and technology, right? We all know the Beatles, but do we all know APIs? To butcher another Beatles song, ‘All you need are APIs, APIs are all you need.’ At least that’s what it seems like, especially in today’s vast finance industry. Before we quote any more songs, we should first define what an API is. According to our friends at Webopedia, Application Program Interface (API) is a set of routines, protocols, and tools for building software applications. An API specifies how software components should interact and APIs are used when programming graphical user interface (GUI) components.
Now that’s what I call a scintillating definition!! And speaking of scintillating, ladies and gentleman, the Beatles (uttered in my best Ed Sullivan voice)…I mean, ladies and gentlemen, the Ranta!
So Mark, are APIs the biggest thing since the Beatles and sliced bread combined?
First off, you can’t really compare anything to sliced bread, as the sandwich is beyond comparison, especially if the sandwich features Pastrami (see the above photo)...”now going for the trifecta!” But I digress.
In our industry, the “next big thing” has been blockchain and the distributed ledger. APIs give us the ability to have something tangible near-term, whereas blockchain and distributed ledger technology are still a decade-plus away from having meaningful impact (across our industry). With blockchain, we’re creating an entirely new ecosystem, hence the lengthy timeframe for when it might come to fruition. APIs give us the ability to enhance the banking and payments ecosystem today; like right now, banks can begin to extend their current offerings, and take advantage of emerging opportunities. I guess to that extent, it’s like our industry’s British invasion. Pop wasn’t new when the Beatles came around, and APIs aren’t new either. The Beatles and APIs just reinvented the way we viewed these respective areas and created massive amounts of excitement in the process.
Other than being the Beatles of financial technology, why else are APIs intriguing?
What’s exciting about APIs is that it’s not pitting banks against fintechs—APIs allow us both to leverage each other, leading to a win/win/win/win—the banks, the fintechs, the merchants, the customers.
It’s like the Red Sox and Yankees or the Patriots and (all other NFL teams) getting along, working together?
It doesn’t seem normal for the Sox and Yankees to hoist the World Series trophy together, but that’s what we’re talking about… and the fans singing ‘Dirty Water’ and ‘New York, New York’ with “hands…touching hands…”
Hmmm…Neil Diamond, the Beatles, Sinatra and The Standells… great range in that playlist of yours! So some last thoughts before we leave dancing to a standard…what’s the difference between Open APIs and APIs? Are they interchangeable?
All squares are rectangles, but not all rectangles are Open APIs.
You lost me.
When we talk about sensitive financial or personal data, protection is absolutely critical. When we talk about ‘open’ with regard to APIs, it’s not straight-up open source; rather, it’s limiting data access to only verified third parties. Moreover, some banks create Open APIs for internal purposes only.
Is there a risk for banks to do this?
There’s a level of risk with ANYTHING and EVERYTHING, but banks have to evolve and APIs are a perfect example of a toolset for banks to evolve. We’re seeing more and more financial technology firms come onto the scene everyday, creating new innovative solutions that are slowly eating into the market share of banks, not rapidly by any means but certainly beginning to erode at the edges. I think that’s why you’re beginning to see more collaboration with FinTechs and Banks. But as with any collaboration, there is a level of understanding that is needed in terms of the partner, and that the partner meets the security requirements that are inherent when dealing with data that is as confidential as one’s finances and personal information. At the end of the day, though, the risk is acceptable if the client demand is there…and at the end of the day, this is moving to a truly customer-centric industry, which means that convenience will trump certain security risks.
So it sounds like you’re bullish on open APIs. What’s on the near-term (and long-term) open API horizon?
Now that PSD2 has moved front and center, a lot of the industry is already exploring and utilizing open APIs to meet the regulatory requirements, which is why it will be THE hot topic at this year’s conferences—from SIBOS to Money2020 and everything in between. Open APIs, Open Banking and PSD2 will be the leading buzzwords on your conference Buzzword BINGO, you can count on that.
I have BIN… See you at Sibos! (and check ACI out at booth F59)
Related Blog Posts
EMV at the Pump: Is it Really That Secure?
Last weekend I went spring skiing, well spring snowboarding — but you know what I mean. It was sunny, with temperatures in the 50s — an epic day of carving mashed potatoes to close my snowboarding season.
Could Increased Fraud Make the Mobile Payments Boom a Revenue Bust for Merchants?
Mobile payments are fast becoming mainstream, with ACI merchant customers seeing 30 percent of all eCommerce transactions in 2020 being made on mobile devices. In the United States, adoption is higher, with 42 percent of eCommerce transactions in 2020 on mobile – that’s a year-on-year growth rate of 55 percent.
PCI DSS 4.0 Compliance – A Catalyst for Progressive Consumer Payments Modernization
2021 marks the beginning of the implementation of the new PCI DSS standards, with the final version of PCI DSS v4.0 currently planned for completion in Q4 2021. The planning phase, which has been run collaboratively by the Security Standards Council with the global industry since 2019, has now come to an end and the time window for global financial institutions to begin implementing their solutions has begun. In short, if you haven’t started yet, you’re already behind the curve.
Building Resilience and Flexibility Through Multi-Acquiring
At one time, merchants saw payments simply as the cost of doing business. Today, however, payments are seen as a strategic battleground—one that can drive revenue and loyalty when done right. Against this backdrop, and coupled with the rise in digital payments, acquirers and banks must work harder than ever to provide the payment types, speed to market, cost point and reliability merchants are demanding.
Touchless Payments: A Major Opportunity for Grocers
The grocery shopping experience has changed significantly in recent years. What was once a simple, traditional trip to the store has now evolved into a variety of consumer journeys spanning multiple delivery channels. Online shopping for home delivery or in-store pickup has gained significant consumer adoption, along with in-store innovations such as self-checkouts and ‘scan and pay’.
Fintech’s March Madness: The Top Seeds “Jonesing” for Glory in Indiana
Ahh March Madness… my favorite time of year for sports (and gambling) and also the one tournament where I’m typically out of the running in my myriad betting pools after day one. While I’ve paid only marginal attention to actual college basketball this year, I’ve been keeping much closer tabs on the madness that has enveloped fintech. And while 68 teams comprise the real March Madness tournament, I’m really only focused on the top four fintech seeds… and that’s primarily due to length of this post (as well as my waning attention span).
Grocery Shoppers Show Omnivorous Appetite for Omni-Channel
Digital acceleration and the massive growth in eCommerce sales in 2020 have not gone unnoticed by those in the connected world. Largely driven by the COVID-19 pandemic, ACI Worldwide data analysis showed that global online sales in the general retail sector were up 209 percent in April and 81 percent in May (compared to the previous year), and overall eCommerce sales continued to show an uplift of more than 20 percent compared to a year earlier in November.
Cloud Trends That Will Shape India’s Banking Sector in 2021
India’s banks and financial institutions (FIs) continue to adapt and innovate as the pandemic drives mass adoption of digital payments. Long term success will depend on successfully ramping up services and ensuring profitability while reshaping customer experiences. This is where the power of the cloud will come into play: In 2021, cloud will increasingly power vital infrastructure for India’s banking and payments sector, improving remote collaboration as well as enabling faster and more agile application development and deployment.
Merchants Don’t Need a Payments Gateway, They Need a Payments Hub
The term “payments gateway” over-simplifies what it takes to process a payment. The terminology comes from the early days of online payment processing, but has now entered the vernacular for all aspects of merchant payments, including online, mobile and in-store.
How to Recession-Proof Your Retail Business in 2021
2020 has been a challenging year for retailers; many were — understandably — unprepared to deal with the pandemic. With millions of people in the U.K. in lockdown, consumers and businesses have had to change the way they work and live, and the way they shop and pay.