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Visa Opens Its APIs to Grab 'Staggeringly Large' Opportunities

For the first time, Visa is inviting third-party software developers onto its network with the goal of advancing digital commerce.

The launch of the Visa Developer platform transforms the card network's products and services with open application programming interfaces. Developers will now have access to payment technologies and services including account holder identification, person-to-person payment capabilities, secure in-store and online payment services such as Visa Checkout, currency conversion and consumer transaction alerts, the company revealed Thursday during a press conference in San Francisco.

"We have always had great talent at Visa, but our success has relied on the partnerships we have been able to develop around the globe," said Visa CEO Charlie Scharf. "The opportunity to accelerate the growth of commerce is fundamentally different today, and that is what we are doing."

Visa joins banks like Citigroup, BBVA Compass, Bank of America and Capital One in embracing open APIs. More are expected to do so as traditional financial services players look for ways to form partnerships with fintech startups.

In effect, Visa Developer helps transform the card brand's network into a software-based solution, rather than the "traditional, hardware-based network of the past," Scharf said.

Visa plans to provide access to more of its payment capabilities over the next year.

The Visa Developer platform is designed to help financial institutions, merchants and technology companies meet the demands of their customers, who increasingly rely on connected devices to shop, pay and get paid.

Allowing developers into the Visa network will move the industry toward a goal of displacing cash while driving commerce, Scharf said.

"Penetration of electronic payments is still small," Scharf said. "The opportunities beyond eliminating cash and checks, and building commerce in the digital space, is staggeringly large and Visa Developer will accelerate this."

The platform will have engagement centers designed to foster collaboration and creation with application developers in San Francisco, Dubai, Singapore, Miami and Sao Paolo.

"We are unbundling Visa's full suite of products and services and giving developers open access to the underlying payment capabilities," said Rajat Taneja, executive vice president of technology at Visa. "We believe this will lead to the creation of entirely new commerce experiences with Visa technology integrated to enable greater security, scale and convenience when it comes time to pay."

The Visa network has handled more than 100 billion transactions in 200 countries and in 176 currencies, Taneja said.

It is a "courageous move" by Visa, said John Badovinac, director of developer partnerships at Total System Services. He said the platform will empower developers at all levels of the payments ecosystem to get involved with advancing digital and mobile apps.

"What's really relevant here is we are unleashing the capability to more quickly develop more customer experiences," Badovinac said.

John Paul, CEO and founder of VenueNext, said his company is going live with some of the development work it has done with Visa Developer at Sunday's Super Bowl at Levi Stadium in Santa Clara, Calif.

"We provide the technology that allows many of the customer experiences at the game, being able to order and pay for food or drink and have it delivered to your seat," Paul said.

Over the past few months, leading financial institutions, technology companies and startups have participated in beta trials of the new Visa Developer platform and many have already created prototype applications using Visa technology. Trial partners include Capital One, CIBC, Emirates NBD, National Australia Bank, RBC, TD Bank, Scotiabank, TSYS, U.S. Bank and VenueNext. According to a recent Accenture study, fintech investments reached more than $12 billion globally in 2014.

The Visa Developer announcement comes on the heels of the launch of the Visa Commerce Network, designed to involve the card brand more closely in merchant loyalty programs.

Visa Commerce Network allows merchants to connect transactions on the Visa network so that discounts and loyalty programs can interact. Visa says a hotel booking site would be able to link its Visa customers to restaurants or stores to offer discounts.

The success of Visa Developer will depend on just how open the Visa network is. An earlier effort by MasterCard to open its technology to small developers left at least one business feeling too constrained. Paidpiper Inc., which in 2012 was MasterCard's poster child for this effort, dropped its use of the MasterCard application programming interface the following year.

"We wanted to work with some of the software [MasterCard] had … but we needed a little more flexibility in terms of how we went to market,"Atif Hussein, Paidpiper's founder, said in a 2013 interview.




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