Commerce APIs: is Accepting Payments the Next Wave?

There's always been a little annoyance on the end of affiliate APIs, those that pay developers money for referring buyers. In exchange for a potential sale, developers have to send their users to the company's site to complete the transaction. In the future, many of those purchasers will be able to remain using the developer's application for the length of the sale. We're a step closer to that future with a new release from API management company Mashery (a ProgrammableWeb sponsor). Mashery customers can now process transactions through their APIs, which means the potential for applications with lower barriers between a customer and a sale. And yes, that little annoyance at the end of affiliate APIs could be going away.

Mobile phones capable of rich experiences and the proliferation of other devices like "smart TVs" are helping fuel the need for commerce APIs. "Consumers are really starting to take control of their own context," Mashery's Andy Raskin said. "In the past when a customer would interact with a business, the customer had to go to the business' context. With mobile devices, we're seeing customers bring their own context with them. So the merchant has to start entering the customer's space."

The Distributed Commerce offering from Mashery lets developers bring transactions into applications in two ways. Developers can either take the customer's credit card information directly or use OAuth to pre-authorize purchases on behalf of the customer. The first is a big leap and one that companies will likely make cautiously. The OAuth option is already familiar to developers and users for accessing other information, but isn't wide-spread for purchases.

Best Buy BBYOpen CommerceLast fall Best Buy enabled in-app purchases via its Best Buy Commerce API. The electronics retailer, also a Mashery customer, requires developers to apply separately to send purchases via its API. "One of the things I wish we'd have done sooner is build out the Commerce API much earlier in our lifecycle," Best Buy's Steve Bendt said in an interview with ProgrammableWeb in June. "That's allowed us to go from the long tail strategy to a combination of long tail and really targeted acquisition of customers and partners," Bendt said.

As it's still the early days of commerce APIs, a partnership approach is the most likely scenario. Partnerships are a much more traditional business development approach than working with independent developers, often called a long tail strategy. One reason is that accepting credit cards means that the developer either needs to at least be audited by the business and preferably PCI compliant, a data security standard implemented by financial companies. Both of these processes can be tedious and ones an independent developer is unlikely to enter.

"With so many devices and social networks, the companies that really get it are going to have to let go of the 'click on my website' mentality," Mashery's Randi Barshack said. And we've seen this before, as companies moved from storefronts or 800 numbers to the Internet. APIs are certainly going to be the driving force behind this new kind of commerce. The question is how quickly it will spread and how soon independent developers will be able to get in on it.

Be sure to read the next eCommerce article: Breaking Down E-Commerce APIs