Open APIs or be doomed, says Visa

Financial institutions that fail to make their APIs openly available are “doomed”, says Visa’s ANZ head of product Rob Walls.

“Anyone that stands still in the current environment of technology change is doomed. We have to continue to evolve – because consumers are expecting it,” he said.

In February, the payments giant published more than 40 APIs “for every payment need” on its Visa Developer platform. The web portal also provides access to sandboxes, documentation and test data.

“We came to the view that there isn’t a single entity that can own all of the innovation in payments,” Walls said. “We’ve been operating as a payment network for almost 60 years. Previously our network was fairly closed, only those who were financial institutions or merchants or tech companies, that were authorised to access it, were able to engage with us.

“Over the past couple of years we’ve seen disruption in many industries, we’ve seen organisations change the way they’re using technology. With with millions of developers around the world today, which is forecast to grow, the value really is going to come from co-creation.”

Walls said that there were around 140 services within Visa that could be made available and there was a push internally to post more.

“There’s now a bit of internal competition around how quickly can I get my product or service into the API set. You want more people using it.”

APIs already published were selected based on client demand and the ease at which they could be securely extracted and made available for external consumption, Walls said.

Closed shop

Australian financial bodies have been cautious in making APIs openly available, citing cost and security concerns.

The situation is a source of frustration for local startups and fintech companies. In a submission to the Productivity Commission – currently conducting an inquiry into improving the availability and use of public and private sector data including open banking APIs – industry association Fintech Australia said failing to mandate open data would make Australia less competitive on the global stage.

“If Australia does not mandate an Open Financial Data model that is in line with global standards, or leaves banks to implement Open Banking APIs at their own pace, we will deny consumers the benefits of greater competition and improved financial services, and risk our banks becoming less agile and less competitive than their international peers,” the peak body wrote.

European regulation – the Payment Services Directive (PSD2) – requires that EU banks make it easier to share customer transaction and account data with third-party providers. Last year the UK government established the Open Banking Working Group with a remit to design a framework for an open API standard.

Open minds

Financial institutions were increasingly coming round to the potential of sharing APIs and drawing on the developer community, Walls said.

ANZ bank has made a limited number available via its Developer Hub and CIO Scott Collary announced in July that: “We want to be a more open bank”. NAB ran a hackathon at the end of last year, with monitored access to a number of its APIs.

“I think what’s really driving it is the fear of disruption. But that language is changing amongst financial institutions in Australia. Instead of being disrupted how can we work with the disruptors to improve the overall service?” Walls said

“The banks and Visa are of the view that innovation is able to come from anywhere and if it’s able to be integrated into my business in a fast, simple, viable way – then I don’t necessarily have to build it.”

Later this month, Aussie and Kiwi start-ups will pitch business ideas that make use of Visa services in a competition, ‘The Everywhere Initiative’.

Successful startups that can develop innovative applications using Visa APIs 'to solve business challenges and bring new ideas to payments' in three categories stand to win cash prizes and the chance to run a pilot with Visa.