API Stairway: The Five Steps to Open Payments
In my pre-EBAday rantings, I discussed Open APIs in the context of one of the greatest rock songs of all time (Stairway to Heaven, for the uninitiated). Waxing poetic about a topic is one thing, but marrying it to concrete steps is another. So, while our Stairway to Open API utopia was a nice background, it’s time to talk about the flights of stairs we’ll have to take to arrive at those pearly entry gates.
1. Ground Floor – keeping an open mind
I think it prudent to talk about the foundational setting we need to start the journey: An ‘Open’ mind and a digital transformation strategy in hand. If you’re asking, “how do we make money on X, Y and Z,” you are already asking the wrong question; the question you need to be asking is “how can I create a new experience that my clients will want and drive my new balance sheet forward?
2. First Flight of Stairs – adopting a startup mentality
How are you going to leave the lobby? By getting a team who is curious and driven. You need to have a startup mentality when it comes to Open APIs; a willingness to fast fail or fail forward is going to be key; not everything you come up with will work (as my colleague Lu Zurawski says, this is the ‘roll your sleeves up period… it’s going to be messy!’).
3. Second Landing - it's all about partnerships
A nice side table and a phone… this level is all about the partnerships and who you can dial if you need help. This New Payments Ecosystem is built around sharing and working together; if you can’t have an open dialogue with partners, you are likely going to be left on this floor…
4. The Spiral Grand Stairway – the innovation buildout
This can be as high and as long as you’d like—it’s the innovation buildout where we talk about all of the different services decoupled from the products at the bank. Look at the loan department with merchant offerings, have the ATM team talk with the private wealth org, new third-party apps married together with your card team – here’s where the fun really starts to take shape.
5. The Open Air Roof Deck – the sky is the limit
What would a discussion be without the open air top of the house? Once on the roof, the sky is the limit!
When all is said and done, the Open Payments era will be about combining the knowledge and innovation of experts from previously disparate industries, to bring new ideas to life. We have seen some of the tech giants take their first steps toward payments, often through acquisitions rather than partnerships. I believe true Open Payments will be the result of a partnership between a ‘payments giant’ and an established API platform provider, which brings best-in-class solutions from both sides.
Related Blog Posts
Increasing Collections & Satisfaction: Real-Time Payments for Loan Servicing
The old adage that “cash is king” is precisely that: old. In today’s world, convenience is king and real-time payments deliver it in spades. Consider that convenient ways to pay can reduce late payments by up to 76%, while reducing call center volumes by up to 83%, and it’s no wonder lenders are expanding their offerings over time to include checks, ACH, debit cards and now real-time payments.
GDPR: Modern Wealth Is In Your Digital DNA
Hands up if you don’t really know what GDPR is… don’t worry, you’re not alone in fact, 6 in 10 people have never heard of it.
And why should the average consumer know about the General Data Protection Regulation (GDPR)? The regulation itself, which will become enforceable in May 2018, is designed to stop businesses using our data without our knowledge or consent. And that consent means complete transparency on how our data is being used. This sounds like a very reasonable expectation for consumers to have, which of course begs the question; why hasn’t this been the standard up until now?
Fintech Frenzy and Fun
I’m in vibrant Singapore for day one of the inaugural Money20/20 Asia... or is this day two? I’ve lost all concept of time this week (and didn’t realize how close Singapore is to the equator… it’s like wicked hawt outside!) And I’m joined once again by my ever-intrepid Rantings colleague to rant about what’s happening in this fun-filled world of payments.
A Master Class in Convenience: Faster Payments for Higher Education
Paying for college can be a real pain, and the act of paying tuition itself has not kept up to speed with the times.
According to Aite Group, 40% of tuition payments are made by ACH (electronic check), making it the most popular method of payment for higher education. Yet, these payments can sometimes take several days to process. In a world where college students send and receive over 120 text messages per day, immediacy is key. Especially when large dollar amounts are being spent. Students and parents demand that payment options conform to their expectations of speed, to prevent their accounts from being overdrawn.
The Hidden Cost of Digital Payments for Retail Payment Players
It is not exactly breaking news that non-cash payments are on the rise globally, with column inches dedicated to the launch of digital financial-inclusion projects. But going cashless is not only a challenge for humanitarian endeavors, or developing countries. We all agree that removing cash from the system will save payments players big bucks in the future, but we must also consider the immediate impact of digital transformation on the legacy infrastructure of the powerhouses of the payments ecosystem.
A Prescription for Profitability: Real-Time Payments Come to Healthcare
When it comes to important numbers in the healthcare sector, you’re probably familiar with 120/80 (that’s ideal blood pressure for the non-medically inclined), but I’d like to introduce you to two more numbers: 15 and 47.
15 is the percentage of healthcare spending due to billing and payment inefficiencies, while 47 is the percentage of patients who would leave a hospital for a better payment experience1.
Telcos Have a Unique Opportunity to Drive Mobile Payments
We are witnessing a significant and inevitable shift in digital payments towards mobile commerce. In the next ten years, we will see an exponential expansion in the number of devices and applications we will use to make mobile payments. You could pay for your groceries on your mobile, for delivery at home, then two days later receive a message from your fridge alerting you that the milk is running low. By the time you get back home, a new bottle of milk could be waiting for you, thanks to real-time delivery, even by a drone.
How the Merchant Payment Ecosystem Can Create Value in Instant Payments
Recently, ACI conducted some research into the appetite to make use of instant payments among corporates. The results were overwhelmingly favorable, but when we think about the benefits of immediate payments for corporates, it does seem obvious that they would want to leverage this new payment type.
Securely Growing Online Sales in 2018: An Australian Perspective
Back in November 2017, I participated in a panel discussion for NORA (National Online Retail Association), where I looked at fraud trends in Australia over the previous holiday shopping season and made predictions to help retailers prepare. Now looking back, I am sorry to say that my predictions were painfully accurate.
It’s A Hard Knock Life: Digital Transformation for Payment Service Providers in the New Payments Ecosystem
Is it a hard-knock life for processors and PSPs? Margins are constantly under pressure, and there’s the need for constant innovation, not to mention rock-solid #SleepAtNightability of solutions. And if there’s even the slightest crack in the fundamentals, customers will surely let you know all about it!