Tech mahindra
Tech mahindra

API driven strategy for a legacy payments platform

Posted by: Rajesh Subramanian On October 16, 2015 04:00 PM

Banks today are fighting Alternative Payments providers for their bread and butter revenue – Payments Processing and Transaction Banking. In this process, interestingly, banks have finally started looking outside of the ecosystem and customers for new and innovative approaches.

Financial Institutions are leveraging external entities like Product Vendors, Software houses – App developers and customers like corporates etc., through services exposed as API. This in essence is forming the bed rock for Digital Transformation. Fortunately, thanks to technology, this has stymied the major roadblock banks had viz., legacy systems..

In essence, banks look at digital transformation as an easy distribution channel for its products and services (aggregators leveraging products and services of a bank). Opening up the bank for services for innovative use cases that banks today lack internally or  are looking for new sources of innovation – new Micro services creation on steroids.

It’s not just banks, but also various providers in the payments value chain. E-commerce sites for example, offer redemption of loyalty points in cards, leveraging API Gateways exposed from Card Processors or interoperability for closed loop instruments or apps analysing payments trends.

Some simple means financial institutions adopt today are

1. Codathons / Hackathons with developers getting access to the FI’s APIs

2. Developer zones with downloadable tool kits

Banks typically scrub and share data – a different way to look at monetization of the data assets that probably is used by merchants to understand customers and their payments behaviour or help deliver personalized offers. The use cases are limitless.

There are verticalized gateways in the market today for the Financial Industry that financial institutions can leverage to jumpstart their digital transformation journey.

About the author

Rajesh Subramanian leads the Payments Practice for Tech Mahindra with focus on latest trends in Payments Processing, Cash Management and Digital Innovation in Wholesale and Retail Payments

Tags: Payments
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