Open Payments Platforms: Risks and Opportunities

A new report from Aite Group examines the current state of the open payments platform (OPP) segment, as well as its growth opportunity and risk potential. Current OPPs are a collection of payments-enabling technologies that allow the software-developer community to freely incorporate payments capabilities into their applications and provide increased flexibility in terms of payment type and channels supported.

Current platforms are more robust than earlier platforms, and this evolution represents a substantial opportunity for the OPP provider; rather than being limited to its own resources to devise and implement new use cases and applications, the platforms are essentially deputising an army of software developers and entrepreneurs to develop innovative uses for the payments system.

By 2015, Aite Group anticipates that more than US$35bn in gross dollar volume (GDV) will flow through open payments platforms globally – up from US$3bn in 2010. With large opportunities come proportionate risks. While there is nothing inherently risky in an OPP, the extent to which the open model accelerates the inclusion of new types of payments originators, channels, and applications can significantly affect a payment provider’s exposure.

“The charting of any new territory means that fraud and risk must be carefully monitored,” said Julie Conroy McNelley, senior analyst with Aite Group and author of this report. “This is certainly true for open payments platforms; as more dollars are processed leveraging open platforms, the appeal of this segment to fraudsters will grow.”

The report provides a brief profile of the key players in the OPP market, including Amazon, IP Commerce, Ixaris, MasterCard, PayPal, and Visa.


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