The business capabilities and data that a digital financial services provider makes available through open APIs can be considered products for a new class of customer: partners and third-party developers. Through APIs, third parties integrate with a provider’s business to create new applications for shared customers and can extend a provider’s reach into new markets. They become part of an extended value chain that brings new direct and indirect revenue opportunities to the provider.
For many providers, APIs bring a new type of customer relationship. APIs are often released in an iterative cycle, moving from a small beta offering to a commercial product over time. This process allows providers to gain feedback from early adopters to better match the functionality of open APIs with market need. By communicating regularly with developers early in the release cycle, providers can get a better sense of the products that external developers want to create with their APIs. They can then work with this new customer segment to identify the best revenue streams and business models.
In the area of API products, CGAP provides resources focused on:
- How to reach out to external developers
- Best practices among DFS providers and the wider payments-related industry for managing a developer portal
- Facilitating engagement with partners and external developers through self-service developer resources
- Putting metrics in place to measure adoption trends and to compare against industry benchmarks