Open APIs – to do all they are meant to do, they need open arms.
The lines may be blurring between brick-and-mortar players in retail, and the service continuum for restaurants and hotels stretches well beyond checks and check-in counters. The digitally savvy consumer wants a digitally savvy experience – so it pays for merchants, and the banks and FinTechs that serve them, to get up to speed. One way to do that is to be open to open APIs.
In the latest Data Drivers, the lure of digital – and flexible – commerce was the focus of discussion between PYMNTS’ Karen Webster and AEVI CEO Nelson Holzner.
Data Point One: 47 Percent
That’s the percentage of bank and FinTech execs surveyed by Oracle who said they would be interested in exploring and adopting APIs, with the goal of creating real-time service experiences for their end users and stakeholders.
Holzner said the figure illustrates some of the goals of his own firm, which seeks to give customers a choice in how they shape the ecosystem across devices and platforms. That choice is enabled with open APIs, which, of course, are publicly available to developers and allow applications to interact. He cited PSD2 as a prime example of the movement toward openness, which in turn spurs the service levels offered by enterprises. The real-time services experience may be broadly defined, but for AEVI’s ecosystem, he pointed to a few emerging use cases.
Consider the smart device that can be used as a checkout device, or small restaurants or hotels, where payment devices become business tools to boost customer turnover and even cement loyalty.
“Whenever you ultimately connect a smart device with an additional service, such as inventory management” or hotel bookings at a merchant or retailer, he told Webster, open APIs become a key enabler of such expansion.
Open APIs are also crucial, he said, when developers and firms want to make those new services available to merchants without having to go through the process of integrating every single one of those merchants. Thus, those merchants look for SDKs that allow them to connect with AEVI’s systems and make such integration smooth and consistent.
Data Point Two: 726 Billion
Data by Capgemini this week projected that by 2020, there will be 726 billion digital transactions globally around the world, which is a 10 percent growth rate, year over year.
Holzner said that new opportunities might lead to greater than the projected 10 percent annual growth, which he stated is “a big number but actually doable,” as transactions are broader in scope than just payments.
He presented restaurant ratings as an example, which is a transaction of sorts beyond payments, or beacons that connect with devices.
Holzner added that in Asia, offerings from Alipay and WeChat extend beyond payments to bookings and other interactions. One transaction begets two or three others, said Holzner, a trend that will only get stronger as people become increasingly connected.
Might merchants feel overwhelmed by the digital deluge? There are some who are reluctant when it comes to banking on certain consumer trends, but in retail “they are thinking big … they ask us to push and bring more features out there … it is quite a task to use all the data” that is available, he said.
Given that AEVI sells to merchant banks and acquirers who then resell the company’s solutions to their merchants, the trend here is that merchants will sign on to what Holzner called “bundles” of three or four apps, perhaps pre-loaded into a smart terminal, which itself fosters loyalty. “We can give merchants a glimpse of what is working well” for, say, the small restaurant or hotel verticals, he said.
Data Point Three: Two
Via Webster’s own weekly commentary, she suggested through the changing dynamics in eCommerce – from mobile to merchants to Alexa and other personal assistants – there will be two large ecosystems controlling commerce.
Google and Amazon may rule those roosts, she maintained, as consumers look to some of the big brand names in commerce to help guide them. It’s not implausible that they will ask Alexa, for example, to help them figure out what exactly they want to do or where they want to go.
This may help to change open APIs, said Holzner, who noted that platforms are only as powerful as the APIs that support them.
Beyond the two ecosystems, there may be a few others that emerge through Asia. There’s a huge shift in consumer behavior that may continue not only in voice, but also other conduits, such as buy buttons and delivery services. He said that the tech behemoths may partner with merchants (local grocery stores, for example) to improve service quality and rival some of their larger brethren.
Holzner also said that the payments piece of the pie remains fragmented, and may not in fact be dominated by just a few large players.
Additionally, open APIs can enable data flow to help merchants discover “what works well and what doesn’t work well” for them, said Holzner, without having to wait for paper reports at the end of the day, week or month.
Developers in verticals can create, within open ecosystems, the tools to access and visualize data. The information can be granular but enormously helpful, noted Holzner, offering insight into such actions as changing business hours or boosting some services over others.
Against this backdrop, it is important for retailers to mull the types of offers they want to pursue, and to draw people into their stores and shopping environs – in turn boosting the fortunes (and longevity) of small- and mid-sized players.