The Basics of Open Payment Technology

Online commerce and mobile technology continue to impact business practices in both B2B and B2C markets—especially as software becomes more “open.” When programmers across company lines have access to the same set of development resources, stakeholders on every link of the value chain, including end users, can make the most of their technology solutions.

Open vs. Closed Ecosystems

Put simply, an open ecosystem supports the sharing of resources and widens the field of development. The idea is that certain software components (which may or may not include source code) are more valuable to users and suppliers when used outside of a company. On the other hand, a closed ecosystem restricts access to applications and content. Resources within a closed platform are kept proprietary and held in place with tighter controls.

Open Payment Technology

In their white paper, Openness is Changing the Future of Payments, PAY.ON defines Openness as payment-related services that are accessible, flexible, and transparent. PAY.ON describes attributes—which must be applied to payments technology, the payments model, and strong partnerships built on trust—as follows:

• Accessible—services must be publicly available in standard formats, use open and modern technical interfaces, offer global and local capabilities, and provide an effective balance between security and convenience.
• Flexible—services that are modular, open to various technologies, multicultural, and adaptable for uptake by partners; they can be combined and do not limit users.
• Transparent—services offer clear payment terms, utilize feedback loops and communities, and follow Open standards that stimulate interoperability and competition; they require interactive documentation and clear commercial terms.

With an open platform, third parties can add functionality to existing software and expand its potential use within the payments space. Rather than reinventing the wheel, innovators can work together with the same toolbox to create solutions that move the entire industry forward at greater speed. This is what drives proponents of an open payment technology ecosystem to push for open standards in the industry.

The end result of achieving openness in the payments industry is believed to be a faster adoption of digital payment processes including B2B mobile payment services, enhanced communications between solution providers and their suppliers, more invisible payments, and ultimately, better data quality and security.

For more insights into the open platform discussion, visit:

PAY.ON: Openness is Changing the Future of Payments
Tech Crunch: Open Platforms Fuel Startup Ecosystems
Dt.com: Closed Vs Open: A Debate On The Future Of Mobile Payments