Tuesday, May 25, 2010

MasterCard Labs Announcement - is this a new era of Open Data?

Following in my recent series on payment technologies and potential disruptions in the marketplace, there was a very interesting announcement from MasterCard about its new MasterCard Labs (NYTimes article: MasterCard Wants Programmers to Use Its Payment Technology) initiative.

In MasterCard's news release of April 15 (MasterCard Launches MasterCard Labs; Names Garry Lyons Group Executive, Research & Development) and accompanying video (http://www.youtube.com/watch?v=wKa1yy1a0fc) MasterCard reveals plans to open up its payment platform for developers.

The NYTimes article only hints at the immense significance of the MasterCard announcement:
So far, MasterCard has identified about 20 of its services that developers will be able to use in their applications. They include payment technology, bill payment systems and data streams like consumer spending patterns, which could be used to send coupons.
This is significant because it's a response to PayPal's November 2009 announcement to open up its platform to developers (PayPal Seeks New Ways to Use Its Payment System),  allowing developers to embed PayPal in their own apps.

Here's the important aspect: Allowing external developers access to its own data on consumer spending patterns, MasterCard is opening up its data outside its own systems.    Leading platform providers such as Facebook and Twitter already allow access to data and functionality through their API's and have cemented their role as infrastructure providers in the new web....they understand the importance of openness and it sounds like MasterCard does now as well.

Other news here (MasterCard Spending $10s of Millions, Hiring Engineers for its New Labs) points to a new development focus.

Looking forward for financial institutions, will having an open platform be a competitive necessity to ward off disruptive payment technologies from the likes of Square (Square Aims to be Credit Card Value Disruptor)?   Even beyond financial institutions, I would argue that every company should be thinking about its information strategy in a new light and asking the question: "Should we be more open with our data and how can that be a competitive advantage to us?"

If you'd like to explore these ideas further with me, please contact me directly. I look forward to connecting with you!

Alan Wunsche

P.S. Have we connected yet on Twitter? You can follow me at www.twitter.com/AlanWunsche