FIN TECH
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Why are standards the secret to keeping payments moving forward?
Because more customers and businesses are looking for quicker and more seamless ways to pay and get paid, the payments industry is booming and awash in innovation. Faster cross-border payments as well as the kinds of financial institutions that can now handle them have been redefined by disruptors like Wise.
The paradox of such a massive invention is that each of these brand-new financial products is constrained in the same way. Even though there has been progress in developing fresh and inventive payment experiences, they are all governed by the same standards and must be constructed using the same basic legacy infrastructure. Every financial offering is supported by decades-old monolithic payment rails, which are deeply established in the financial system. However, where can there be differences when everyone is following the same guidelines and the same blueprint?
Additional data being applied to APIs
Differentiation of Data
Own consumer data is where differentiation begins, and you can only give more value and spur growth by understanding how your customers behave while they are making purchases. However, there is a natural limit to the amount of information that can be obtained from a single set of authorisation requests. Your services can become more innovative if you combine them with more standards-compliant data, but APIs are essential for utilising data.
APIs as a platform for innovation
Application Programming Interfaces, or APIs, are a key force behind payments innovation and are becoming more and more crucial to businesses. They make it possible to make seamless payments, expand the markets available, gain access to real-time data, and build a bridge between the outdated infrastructure to which we are tethered and contemporary payment experiences.
For instance, it’s typical for companies to give cards to fleets of drivers in the trucking sector so they can pay for gas and other related costs like food. Businesses can do this without providing drivers a full credit card and save expenditure headaches by using a fuel card. The user services provided by such card issuers can be linked to the card transaction data by issuer processors using an API. It can perform more useful functions when combined with other data, such as location data, such as only allowing card transactions at partner gas stations that offer discounted fuel or offering drivers individualised meal pricing.
Fuel cards appear straightforward from the outside, but there are numerous moving and antiquated components that must cooperate to provide a seamless payment experience.
From ISO 8583 to JSON APIs, there are various schemes, data sets, and payment messaging standards to collect. They can limit how much you can customise your product and the add-on services, but when they work together, they can create new growth prospects.
The same legacy infrastructure and standards apply to all fintech. How well a person can assemble Lego pieces to produce a whole that is significantly more than the sum of its parts is what distinguishes them from others who are trying to carve out a niche for themselves. Players won’t reach their full potential and remain competitive until creative engineering goes above and beyond the norm.