While numerous European startups have succeeded in transforming banks into app stores, only the California-based Paymency has managed to do the same in the U.S. According to the American Banker, the API-driven platform for finance and banking delivers “banking-as-a-platform” service to U.S. banks.
Paymency founder Gary Lewis Evans predicts that application program interfaces will power banking. With the use of APIs –known to ease the outsourced software app creation process when building for customers — users will benefit revolutionary impact that’s akin to the emergence of credit cards or internet banking.
“We are going to be an API-driven platform for finance and banking the way Amazon is a platform for retail,” said the fintech veteran, Lewis. “Banks will have the ability to interface easily with products and services and use it as a way to create a virtual bank and get out of the legacy branch structure.”
Banks will have access to Paymency’s edition of an an app store, where they’ll offer budgeting, mobile payments, personal financial budgeting, as well as services a tad more sophisticated (P-to-P lending, insurance, and investing). Numerous fintech companies and their partners will be able to offer up products in the store. What’s more, Paymency may seek out a bank charter, making it possible for nonbank entities (ex. Walmart) or digital bank startups to connect and offer their customer base full-scale banking services. Microsoft Azure cloud computing platform is used as the base technology for Paymency.
According to Lewis, the company soon plans to unveil its text-based mobile payments product and network Groovy Pay, which resembles Kenya’s M-Pesa mobile payments system.
“I describe it as something very similar to when Amazon first launched as a bookseller, and then they expanded their platform at a later date,” said Lewis, who co-founded Bofl Federal Bank, once known as Bank of Internet USA. “So we’re going to launch with mobile payments and build our base that way before expanding.”
With more than four decades of experience under his belt, Lewis has a long history of digital innovation. He spearheaded California’s early venture into internet banking in 1995 when he was serving as president of La Jolla Bank, which was one of the first in the nation to do so. Lewis left La Jolla Bank in 1996 to launch Bank of Internet USA, starting out in a computer center at the University of California-Santa Barbara. He stayed on as president until 2010, leaving to pursue his next project, Paymency.
A “soft launch” of Paymency with GroovyPay is expected within the next six months. Lewis believes it may take up to three years for Paymency’s app-store-like platform to be fully formed and formally launched. The API-based model provides more flexibility, with regards to services and products, making it far more attractive to banks. To do this the right way, Paymency will have to appeal to banks’ core vendors, and banks’ will require core systems that could facilitate API-based banking. Core vendors tend to wank banks to buy all or most of their ancillary products from them, rather than another party. However, many believe core vendors are becoming more flexible and more willing to under consumers’ attraction to API-powered banking.
Banks are also more drawn to the idea of partnering with outside firms, so they’re able to offer more services and products. These fintech partnerships are changing with the market, becoming more fluid and more dynamic, offering solutions and becoming provocative for the sake of expectant consumers. The API banking-as-a-platform services are natural progress, as that’s the way technology is moving. Technology is moving so rapidly, that this is API banking-as-a-platform services are fixed part of banking reality, according to Lewis.