When you think about quick and easy online payment, which brand comes to mind? PayPal. If a retail outlet wants to let customers pay for goods with just a couple of clicks, PayPal is probably the easiest way to do it. But if you’re Visa, what do you do about the dominance of this Silicon Valley hotshot? Visa is the financial giant that’s spent over half a decade building a rock solid reputation as a trusted name in payment, and in fairness, offline the company is still hard to beat. But this thing called the internet is here to stay, and it’s a place where building fences - even if you’re a payment behemoth - doesn’t get you far.
Enter Visa Developer. This is going to “reinvent commerce”, is how Nitin Chandel, Senior Vice President of Developer Platform at Visa, put it as the company made the announcement. Visa is opening the doors so that anyone can “build, collaborate, create and help shape the way the world shops and pays”. Whether this means the end to PayPal’s reign as the easiest way to pay on the internet remains to be seen, but certainly, merchants may soon have other payment options. In addition to e-commerce, Visa Developer can be used to create things such as Peer-to-Peer (P2P) payments, fraud checks, and international remittance.
Visa Developer is essentially a toolbox for developers to build new payment products fit for the user-friendly, connected internet world, backed by one of the biggest names in the industry. For the first time, Visa provides a single-entry portal to gain access to the company’s capabilities, including a core set of APIs, sandboxes, test data, and analytics previously only available to selected partners. Visa now lets developers access 150 APIs that span across key company assets such as merchant checkout, fund transfers, mobile location confirmation and transaction control.
Open collaboration is a refreshing move from Visa, and the fact that one of the biggest names in finance is choosing this route is telling. Visa could be doing all this because you don’t get to be Visa unless you’re smart - uniqueness may have got Visa to where it is, but the age of each company needing to reinvent the wheel is over. Of course, this is not an overnight change: Visa is no stranger to working with payment start-ups, having already invested in Stripe, to name one example. Stripe is the payments processing company that powers transactions on Twitter, Lyft and Pinterest. The more jaded among us could argue that Visa is motivated by another realisation: that it simply needs help catching up with PayPal if it’s to win the battle for online payments.
Visa Developer has the potential to mix unprecedented levels of creativity into new products powered by Visa’s technology, reputation, reach, and security credentials. The hope from Visa is that Developer will help bridge the gap between physical and digital payments - the latter is still a small percentage of the total, but it’s growing rapidly. Regardless of your opinion on Visa’s motives: the plan definitely has the potential to work. The stakes are high: it’s not just online payments that are in play for Visa - the arrival of the likes of Apple Pay and Samsung Pay makes it clear that mobiles may soon replace our wallets. At the moment, this technology is powered by credit cards, but it’s not hard to imagine one of these companies striking up a direct relationship with the banks.
For Visa, the only way to protect itself from an evolution in payment technology that may move away from their bread and butter - credit cards - is to be the one to create that future. However, any kind of cannibalism is notoriously difficult to pull off from the inside if you’re a major organization. This is why letting third-party developers into the API cookie jar could well be a very clever way to achieve this.
Visa isn’t the first company to launch an API so developers can build products that link together for a smooth user experience. Tech start-ups have long been doing this, aware that being quicker and more nimble is one of the key ways to get ahead of the incumbents. In London, Currencycloud is quickly establishing itself as the payment engine of choice for businesses like Paddle, Seedrs, Azimo and Centtrip. Currencycloud’s Payment Engine Two makes its next generation API available so clients can customise their solution, while still keeping the process quick, secure and user-friendly.
In the future, this appetite for increasingly seamless and instant payments mean both consumer and business-to-business (B2B) transactions will be looking to cut out the middlemen. Instead, money will move directly between fewer parties. The displacement of credit cards is among the key predictions from the World Economic Forum: “Whether tomorrow’s customer reaches for their wallet, their phone, or some other device to pay, their experiences will be more seamless than ever before.”
Even the start-ups sitting pretty as new-era payment companies set to benefit from this trend, are realising this isn’t actually a winner-takes-all situation. Partnerships are necessary - not just for the likes of Visa but also for young, innovative companies - as everyone faces the same onslaught from competitors who’re constantly coming up with cool new tech. The good news though, is that this collaborative approach creates opportunities that benefit everyone involved.
One example of how working together bears fruit is Paddle, the UK start-up serving the global app developer community. Paddle provides a checkout experience that resembles an app store, streamlining the payment process for developers selling their software. Paddle has been able to process payments at much lower cost since using Currencycloud technology, which also means Paddle’s offerings are quick and automated, even at scale. Previously, Paddle used international bank transfers or PayPal, but as the company grew, this proved too expensive and time-consuming. Connecting to the Currencycloud API has enabled Paddle to scale without adding to the workload - in fact, time spent on managing transaction has decreased.
Innovation is only expected to speed up in the future, so being a winner in the age of digital disruption means successfully dealing with the issue of legacy technology, said Accenture in a report on the future of banking. “Openness, collaboration and investment are the critical themes that emerge for existing banking players,” concluded Accenture. “Established players should look to collaborate more closely with those in different industries, and with different outlooks to identify new ways to generate value.” Visa Developer is a great example to other established finance companies of what this can look like in practice.