May 25, 2010, 3:35 PM

MasterCard opens its technology to developers

MasterCard is looking to tap the minds of programmers around the globe to help it stay in front of the payment technology curve. The company announced today that it will give programmers access to its payment technology to create web and mobile apps.

MasterCard is looking to tap the minds of programmers around the globe to help it stay in front of the payment technology curve. The company announced today that it will give programmers access to its payment technology to create web and mobile apps.

Developers will be able to access MasterCard technology via Application Programming Interfaces or APIs. By opening up its previously proprietary payments and data services, developers will be able to create a new wave of e-commerce and mobile payment applications, MasterCard says.

MasterCard has dabbled in apps internally, launching, for example, the MasterCard ATM Hunter, which helps iPhone users find ATMs with their iPhone’s GPS.

But offering outside developers access to MasterCard API will open the company up to millions of ideas from programmers around the world, a MasterCard spokeswoman says.

For example, a developer might build an app that allows a cardholder to receive a text message that asks for an authorization for a transaction that is more than $100, the spokeswoman says. “We are hoping that developers might come up with new ideas that may have not been previously considered or not thought possible,” she says.

The services could potentially help e-retailers, too, the spokeswoman says. For example, e-retailers might be able to use an API to connect directly to MasterCard rather than the traditional route through a merchant acquirer and acquiring bank. This, spokeswoman says, could make the card approval and purchasing process more streamlined and perhaps save on fees. And, she says, data analytics could track shopper spending trends, which e-retailers could use for promotions and coupons.

MasterCard is opening up 20 of its services that developers will be able to use in their applications. These include payment capabilities, online games, e-commerce sites, mobile apps, and payroll systems. There will be potential for developers to receive income from the apps they create, the spokeswoman says.

Mike Gualtieri, Forrester Research Inc. senior analyst, says MasterCard selected a good time for its announcement. “The battle for mobile payment dominance is building with no clear winner at this time,” he says. “MasterCard’s API let’s them cast a wide net across the developer community to potentially capture the next big payment app while at the same time addressing the long tail of payment innovation.”

But he says without any established incentive for developers to participate, he wonders how popular the program will be. “What would strengthen this announcement is if they also could stand up one or two high profile developers who are ready to launch innovative services using the API,” he says.

The program is the first initiative from MasterCard Labs, a research and development unit the company launched in April. The portal will be launched later in the year and will provide developers technical documentation, software development kits, sample source code, reference guides and ways to test the new apps. No retailers are participating yet, the company says.

MasterCard also plans to launch a portal to enable developers to sign up for access to all of the technology that MasterCard makes available and a developer forum to encourage collaboration between MasterCard engineers and developers.

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