The coronavirus pandemic has exposed vulnerabilities across doing business as usual, as the nature of commerce and how we pay has changed on a dime, moving online with breathtaking speed.
To that end, said Daniela Mielke, CEO at RS2 Software, in an interview with Karen Webster, application programming interfaces (APIs) can help integrated software vendors (ISVs) and payment facilitators (PayFacs) make payments “invisible” as part of the merchant and consumer experience — and offer those merchants a range of value-added services.
But those software providers can only do that with actionable insights gleaned from data. And collecting the data in an efficient manner, from a number of courses, is critical.
Mielke noted that APIs can allow payment processing platforms, such as RS2, to create a range of new services for software companies, including ISVs, without having to “own” those offerings.
“APIs help open the market and allow us to focus our resources on making our payment platform better, rather than putting the same developer resources into creating all kinds of services that basically only provide access to what we do,” she told Webster.
APIs also allow software companies to maintain focus, Mielke added, as they need not worry about integrating into legacy systems that are far-flung among different providers.
In the end, she said, the entire payments ecosystem enjoys the benefits of being flexible and streamlined in developing new products and services.
Drilling down into those new opportunities for innovation, data remains key.
Mielke noted that as APIs aggregate data from myriad sources, coupled with robust analytics, software companies can fine-tune their offerings depending on the needs of the end customers (merchants), while even enhancing their own operations.
The ISVs, she said, “can get all the payment data from their payments providers, and they can get all the data they need from banks in an open banking approach, or from their marketing companies.”
Where We Are Now — And Where We Are Headed
The pandemic has spotlighted the need for businesses, especially smaller ones, to be creative and pivot operations to better serve their targeted audiences.
Mielke pointed out that APIs are already being deployed to help smaller businesses. Restaurants, for example, have been able to offer pay-ahead capabilities, and she said RS2 has seen several B2B businesses make a fast shift to direct-to-consumer (D2C) by working with ISVs that can quickly adapt their platforms to support the shifting business models.
And, she noted, “contactless payments have emerged everywhere,” as the trend away from cash is inexorable.
In addition, the shift toward doing everything in a home-based setting means companies are boosting their computing power, with an eye on growing scale when the economy improves.
Thus far, according to Mielke, APIs have been focused on data exchange, core payment processing and onboarding activities. There are other use cases in the wings, of course, across underwriting and risk management.
“The ability to consume other services via API gives us all the ability to ‘flex’ much better,” which includes dealing with operational challenges and grappling with vulnerabilities as they surface, she said.
Mielke noted that firms can leverage software and APIs to change the location of their operations centers. India, for example, has closed its call centers, hobbling its financial services industry — but with APIs in place, it becomes easier to switch capacity to different places.
Mielke cautioned, however, that APIs are no “silver bullet” for solving all of the issues that have come to bear on the business world in the wake of COVID-19.
“The post-COVID world needs a combination of different technologies,” she said.
Artificial intelligence (AI), in combination with APIs, will help firms interpret large volumes of data as they transform their businesses over the long run.
And with an eye toward the journey beyond merely surviving the coronavirus, businesses — especially the software providers — are looking to take fixed costs out of their operations, said Mielke.
“They know that as an economy, here in the U.S., we will come out of this with strength … and they want to be ready,” she said.