Yesterday, a very dull press release from Visa announced an actually important thing: the world’s largest payment processing network is opening up to developers. Yawn all you like, but this is big news.
Payment processing is all the rage for a very simple reason: People spend an inordinate amount of money every day, increasingly not using cash. Companies have worked out that if they insert themselves into the payment process, they can nab a tiny slice of all those payments which, added up, is a crapton of money.
This is why services like Apple Pay, Samsung Pay, Stripe and the DOA CurrentC are being developed, and why Visa, currently the biggest name in payments, is slightly shitting itself. Sure, Apple Pay and Samsung Pay use credit cards right now, but once people get used to paying with their phones, it wouldn’t be a huge jump to cut Visa out of the middle, and for Apple to start working directly with the banks.
So, Visa is now doing the previously unthinkable: opening up its payment processing system to third-party developers. At launch, Visa Developer has APIs to access 150 different Visa systems, from straight-up stuff like Visa Checkout and Visa Direct, to things like Visa’s location, foreign exchange and tokenization services.
Visa’s hoping that if it makes it easy for developers to use its services, it will choose to integrate Visa, rather than using something like Stripe or Apple Pay to make online payments, or transfer money between individuals.
It’s a clever play, and one that could certainly work. The “network effect” is an economics term that basically means a thing becomes more valuable the more people that use it. If you’re designing an app, and you have the equal choice between integrating Apple Pay or Visa Checkout to do your payments, you’re going to choose the one that’s easiest, and that basically all of your customers are going to be able to use. Not everyone has an iPhone; most of the Western world has a piece of plastic with VISA on it.
As with every third-party program, Visa Developer is only going to be as successful as people make it. Still, it’s a good sign that Visa isn’t taking evolution sitting down.