Ecosystem

Why We’re Joining the API Economy | Series 2 of 3

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In our previous post we discussed the “API economy” and ways in which it boosts the creation of new innovations.

With the imminent launch of a third-party API offering for our own Interac e-Transfer platform, we’ll soon be joining this economy – a move that makes sense for us, and that will have significant benefits for our developer community and for Canadians in general.

As we recently discussed in our white paper, Principles of a Modernized Payments System, we’ve long believed in the merits of openness, and we’ve made this belief tangible through our embrace of the ISO 20022 standard (allowing disparate systems to communicate with each other using a single XML-based protocol), through our development of shared services (like a proxy directory that means senders never need to know the personal account numbers of recipients) that benefit our members and their customers, and through our third-party API.

An open payments platform, we believe, is the fastest and surest path to a ubiquitous payments platform – one used by as many individuals and organizations as possible, and that therefore minimizes friction (and costs) while maximizing opportunities for commerce.

There are many as-yet-unknown but potentially high-value applications that can take advantage of our payment rails, and we know we can’t develop and market them all – nor should we try to. Our third-party API offering is meant to unleash the brainpower, creativity, and entrepreneurial drive of the wider industry – and our own developer community – in the discovery and exploitation of these valuable opportunities.

For start-ups and other service providers, our third-party API will eliminate the need to build costly proprietary payment systems, with all of the security and regulatory burdens – and the scale and performance demands – that these imply.

Instead, our secure, robust payment rails will act as a utility that start-ups can simply plug their applications into, enabling them to draw on world-class capabilities like directory services, fraud management, money send and request, and bulk disbursements (to name only a few).

For our participating institutions, it will soon mean a much wider range of opportunities to deliver innovation-driven value to their customers: from new functionality they may decide to white label, emulate, or acquire, to deeper and more creative pools of product and technology talent they can tap. And for both start-ups and incumbents, it will mean the ability to connect their own customers to a single set of payment rails used by more people and businesses than ever.

As everyone agrees, after all, it’s really about the users. By reducing the barriers to entry for innovative ideas, our third-party API offering is meant to ensure that making payments and transferring funds becomes, for Canadians, ever easier and ever faster – and that these activities become increasingly embedded in the broader and more valuable activities that people perform every day: banking, yes, but also shopping and planning and socializing and… but of course, it’s not up to us to add to that list. It’s up to you.

Click here for part one of this three part series: Financial Services and the API Economy.

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