MasterCard Opens Up Its Platform To External Developers

In a move that is likely to dilute Paypal's dominant position, Mastercard announced that it will open its APIs for some of its payment and data services to developers worldwide. By opening up previously proprietary payments and data services, developers will be able to create a new wave of e-commerce and mobile payment applications. The new Open API program is the first initiative from the newly created MasterCard Labs. A new developer portal will also be launched to enable developers to easily sign up for access to all of the Open APIs that MasterCard makes available will also be launched.

In addition to payments, MasterCard has identified approximately 20 platforms and services that it plans to open up to developers via the portal. These platforms and services provide additional functionality and enhancements to MasterCard's payment capabilities. The Open APIs will further enhance the development of new applications and systems beyond those currently available, including CRMs, ERPs, online games, merchant e-commerce web sites, eWallets, mobile applications, and payroll systems.

This is definitely good news for the payment industry in general as it creates competition for Paypal's developer platform x.com

This move is not likely to threaten Paypal right away, that already has a significant lead having made its platform available last fall. According to Paypal, "“thousands of developers have signed up, hundreds of apps have been built, and millions of dollars have transacted over our platform.” We have certainly seen some exciting and innovative Apps being developed using the Paypal platform. Paypal also cites Facebook, Salesforce and IBM as users of its APIs.

It remains to be seen if Mastercard is able to successfully challenge Paypal and whether Visa follows suit with its platform. A lot will depend on how user friendly the platform is, what features are exposed using the APIs and most importantly the revenue sharing with the developers.
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