The recent launch of the Visa Developer platform marks a significant shift for the global payments network – and, indeed, the broader digital payments space. Visa Developer includes a host of APIs offering the full mix of payments functionality, all built on Visa’s underlying core network. Visa is opening its full capabilities directly to the broader digital ecosystem while cementing its place in the future of payments. Although many legacy bank players have been hesitant to see Visa as primarily a technology company, rather than a network provider, Visa Developer will significantly extend its reach to app developers of all varieties, from start-ups through to technology giants.
The use of APIs in payments is not a new development; it has been around for several years. Historically, however, most payments APIs were clunky affairs that were difficult to integrate and offered minimal flexibility to developers. The growth of payments providers such as Stripe and Braintree has provided a broader shift in thinking in the payments space, with a focus on developer-friendly tools that are flexible and easy to deploy. Whereas traditionally the choice of payments provider was largely an accounting and finance issue, developers have now come to the fore as key decision-makers in payments. The “API-fication” of payments will continue to gather momentum and could lead to a significant increase in new payments services and functionalities.
Providing the tools for developers in start-ups – and, indeed, major enterprises – will ultimately help to protect Visa against disintermediation. Its brand visibility will likely fall into the background in some deployments, but the company will nonetheless form the backbone of these services. This will help to ensure transaction volumes remain high in an increasingly cardless world and will keep Visa at the center of the digital payments ecosystem. It also means that newer Visa services, such as tokenization and P2P push payments, will spread more rapidly to a wider end-user base than may have been possible on a traditional bank-by-bank approach.
Despite its historic positioning in the global payments market, Visa continues to struggle with some banks, which still perceive it as a network service provider rather than a technology player. This perception is slowly changing as Visa expands its technological services and offerings, but Visa Developer’s direct appeal to the developer community gives it scope to circumnavigate existing bank partners and significantly increase the provider’s role in the broader digital payments market. By expanding its positioning, particularly in terms of live deployments and on-the-ground offerings, this will help to speed up Visa’s strategic realignment with its core bank partners.
Gilles Ubaghs, Senior Analyst, Financial Services Technology
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