Why open platform is very important?

As with other open platforms in the field of technology, open payment platforms are recognized as having the most potential to affect the entire payment industry. However, doubts about open content and closed content still persist.

Beijing November 25, on the future development trend of mobile payment platform is inclined to open or closed, "Forbes" magazine finally gives the answer is the former.

Reported that this year to the global mobile payment transaction volume will exceed 1.1 billion, the transaction volume reached 171 billion US dollars. As of 2016, global mobile payment transactions will reach 9.9 billion transactions, almost 10 times now.

Many experts believe that mobile payments are most likely to affect small and medium-sized businesses because they were previously unable to pay for the tool. Currently, many businesses already offer mobile payments with platforms such as Google Walle and Square, but as the utilization of this feature grows, the issue of whether the mobile payment platform is open or closed arouses heated debate.

Like other open platforms in the technology arena, open payment platforms are said to have the best potential to drive the entire payment industry. But doubts about what to disclose and what to close still exist.

From a historical point of view

When electronic payments first appeared, they were only used on closed, proprietary platforms where the technology could not easily establish communications. Only large companies have the strength to integrate the entire system, the establishment of communications networks. The sweetness of electronic payment can only be tasted by big companies.

The network began to change this unfair situation by gradually shifting electronic payment from focussed hardware convergence to the use of software functions (accounting functions, inventory). With the rapid development of e-commerce mobile technology, startup companies such as LevelUp began to offer free payment transactions to break the existing market of payment. This shows that we are rapidly entering a new era in which the value of paying data exceeds the transaction costs. The original payment transaction revenue model has died.

However, while startups "open" the services some businesses can leverage on mobile payment platforms, they remain closed. In an area of ​​mobile payment that changes every month, will the open platform bring another wave of impact?

Why open platform is very important?

Companies such as LevelUp and Square have seen great success in the United States, and in fact Square claims more than two million Americans are using mobile payment products.

However, even if everyone can enjoy such services, the platform remains closed. While they do offer "one stop shop" and a perfect customer experience, they also create the following issues for retailers:

Closed platform contains all the data. Platform providers focus on collecting customer purchase data to create more revenue opportunities for themselves, but this may not be a good thing for their corporate customers. SMEs with the risk of user loyalty transferred to the platform, the result of damage to their own interests.

Closed platform eliminates other software operations service model. For example, retailers booked on Quickbooks will have to switch to a new billing system if their payment platform is not compatible with Quickbooks. Other businesses may be replaced as well.

Closed platform only provides a fixed fee structure. There is no room for price negotiation. What kind of service retailers choose to pay what price. If the previous system needs to be completely replaced, then it is not a small burden.

A clear assessment

The good news is that mobile payment, no matter whether it is open or closed, is already a service that everyone can enjoy. Services that used to be prohibitively expensive nowadays are also becoming more popular, reducing their operating costs. This new dynamic environment allows retail brands to evaluate payment platforms and find payment products that are both affordable and consumer-friendly.

For some small shops, networking with social networks may be the most important factor. Large organizations need powerful marketing capabilities that require both a broad audience and a precise targeting of their target customers. All retailers will evaluate the platform that best suits their system.

Either open or die

The fragmentation of the market will continue to expand, and technological innovations will also bring new opportunities to retail brands. In the long run, if the history taught us anything, the closed platform has gradually been closed, and the open mobile payment platform represents the future.