River view, Myanmar. Photo by Phyu Aye Pwint, 2017 CGAP Photo Contest Photo by Phyu Aye Pwint, 2017 CGAP Photo Contest

Open API Strategies: How to Plan for Success

An application programming interface (API) allows two software programs to talk to each other. Open APIs go a step further. They permit one business to seamlessly use the data and resources of another to create new services, just as ride hailing apps used by millions every day rely on APIs to integrate with map and payment services. In the financial sector, APIs make it easier for fintechs and other innovators to build solutions -- everything from goal-based savings apps to pay-as-you-go solar solutions -- that leverage the data and capabilities of large financial services providers.

CGAP is working to enable smaller, more nimble innovators to use open APIs to expand the range of useful financial services available to low-income customers, benefiting financial services providers, third-party developers and customers alike. However, opening APIs is not a proven strategy for providers - there are risks and unknowns. Our research focuses on best practices in open API strategy for financial inclusion and product and risk management.

How Does the Business Model Work?
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What types of APIs are digital financial service providers opening in developing countries? CGAP has been keeping track and spotting trends.
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Is “going open” worth the risk for payment providers? A money transfer business in India shares how allowing other companies to deliver financial services based on its systems has fueled its recent growth.
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From Twitter to Walgreens, companies across diverse industries have seen their businesses grow after deciding to share their online services with external firms. Does a similar strategy make sense for digital payments providers too?
What are the Best Strategies to Engage 3rd Parties?
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Open APIs have potential to spur innovation in digital finance and grow business for payment providers. But to realize these benefits, providers must design open APIs that meet the needs of the developers who use them.
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To entice third-party app developers to innovate with APIs, digital financial services providers should start thinking of developers as customers and provide the right kinds of resources.
Additional Resources
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Many products and services as we know them, such as Facebook, would not be possible without something that few people have heard of: application programming interfaces (APIs). Open APIs are contracts that make it possible for different companies' software programs to interact

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Software developers are tremendously excited about mobile money and the potential for new apps to dramatically expand the flexibility and use of mobile money platforms. Accelerating mobile money innovation could expand the reach and benefits of financial services offered to the