MasterCard, NYPAY explore fintech APIs

MasterCard Worldwide and NYPAY co-hosted a summer evening celebration of financial technologies on July 22, 2015, in New York City. Sixty-five attendees enjoyed a casual dinner, networking and panel discussion held at MasterCard's Technology Hub and titled APIs in Fintech: What They Do and Why They Matter.

The technology hub, which opened in October 2014 in New York's tech-friendly Flatiron District, leverages what MasterCard Chief Executive Officer Ajay Banga described as a "pre-eminent technology and product talent pool." The open design environment spans three floors and 60,000 square feet, housing 200 employees from five MasterCard technology teams, including MasterPass, the Digital Enablement System, OpenAPI, MasterCard Labs and Start Path. Banga said the office will build on the work of similar teams in Dublin, Singapore and St. Louis that focus on innovation and emerging digital technologies.

NYPAY, a professional organization for payments industry leaders and innovators established in 2006, has hosted a series of events designed to facilitate "between-panel conversations with interesting people you don't meet during your daily routine." The group's growing membership base includes senior executives from around the globe with expertise in finance, government, banking, journalism, payments and emerging technologies.

4 P's: pizza, programmers, panelists, payments

After an informal hour of networking, refreshments and pizza, NYPAY President David True moderated the panel discussion. In his opening comments, True noted that APIs (short for application programming interfaces) have evolved from an esoteric engineering term into a popular news topic and staple of popular culture. He cited the practice of using Facebook credentials to log into a website or app as an example of widespread API use.

True entreated the audience to think beyond the API acronym, commonly defined as protocols, routines and tool sets for use in building software applications, to explore "what they are, what they do and why they are so important to payments, data and security."

He then introduced panelists T.M. Praveen, Head of Platform Transformation Service at Opus Consulting Group; Dave Matter, Head of Product at Marqeta Inc.; and Brien Buckman, Product Manager of MasterCard's API Platform.

APIs' multifaceted value proposition

Here is a sampling of API benefits for consumers, business owners and programmers cited by panelists:

• Cost saving: "When they use APIs, ecommerce providers can focus on their product without having to build the infrastructure involved with acquiring," Dave Matter said. "Issuing banks and their networks can take advantage of benefits without investing in complexity."

• Time saving: "APIs enable companies to leverage their partners' expertise by using two or three APIs to build any sort of application," said T.M. Praveen. "APIs can enhance legacy infrastructures. Apple Pay integration can be as simple as downloading an SDK."

• Marketability: "MasterCard at one time only worked with big companies," Brien Buckman said. "APIs provide standardized documentation and a recipe list that enables MasterCard to work with many new types of customers." Buckman described the sharing economy and on-demand delivery services as "interesting verticals involving a lot of APIs." As an example, a courier service could use an API to find the closest courier in a given geographic area, prompting a notification to activate a dormant courier card or device.

• Scalability: Buckman further noted that the value proposition for API usage isn't just external. Many companies built APIs for their own consumption, then decided to share the API with the world. "Amazon Web Services is a perfect example of this trend," he said. "The company needed to create a logistics solution for their expanding database of SKUs; it needed to be flexible with the capacity to accommodate higher transaction volumes during high-peak holiday seasons." Amazon's internal model was so successful that the company created Amazon Web Services, an online hosted portal that enables other companies to outsource a range of database storage, analytics, application and deployment services.

Rules engines, best practices

APIs enable companies to build products quickly and efficiently by accessing a range of functionalities within a technology platform. Buckman said MasterCard's policy is to use data in an aggregated, anonymous way. "For example, we can identify popular establishments using spend data from people who patronize restaurants in a specific geography," he said.

Matter said APIs are designed to "delight engineers and be a pleasure to work with." He cited quality, ease-of-use and economic feasibility as key components of well-designed APIs. He also stated that "idempotency," in which the same inputs yield the same effects, is a benchmark of API testing, and most companies will stress test a product built around an API in a "sandbox environment" to ensure the product is ready for market.

The design process itself can be a delicate balance between a paint-by-numbers approach versus providing broad-brush suggestions, Matter added. "You don't want to go all the way to canned solutions," he said. "When you give tools to creative people, they can come up with interesting permutations."

Editor's Note:

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