Market Landscape for Open API in Fintech

Goals

To provide the market landscape for Open API in Fintech, specifically to identify the strategy of companies like Payoneer that utilize Open API, the requirements for starting an Open API, a use case, and monetizing the use case. This should incorporate information about the market and competitors, their strategies, opportunities, and advantages.

Early Findings

Market Landscape

  • The market landscape of Open API in Fintech encompasses a range of different companies and offers a range of different functions. These include peer to peer transfers, investment management, access to data, payments, behavioral analysis, banking, and regulation, to name but a few.
  • Payoneer falls within the payments sub-market, which incorporates payment gateways and payment processing. Given this, we have focused the market landscape on companies operating within this sphere.
  • The payment processing market was valued at $74.4 billion in 2020. It is forecast to grow at a CAGR of 10.2% to $120.7 billion in 2025.

Payoneer

  • Payoneer describes itself as " a cross-border payments platform that empowers businesses, online sellers and freelancers to pay and get paid globally as easily as they do locally."
  • The Open API infrastructure offered by Payoneer supports a number of different business use cases that can be integrated with the payment capabilities offered by the company. An overview of the business use cases offered by Payoneer is available here.
  • A review of the Payoneer website suggests Payoneer´s strategy is to position itself as the leading cross-border payments platform.

Competitors

  • G2 lists Payoneer´s major competitors as PayPal, Stripe Connect, Apple Pay, and Authorize.net. It must be noted, there is some variation between each of these companies and the ways they use Open API. All of the sources reviewed determined competitors based on function and use not Open API. There were no credible resources that evaluated competitors based on Open API usage.

Opportunities

  • COVID-19 has presented a major opportunity within this market; the development of contactless payment processing. Volumes of online sales have also increased significantly over the course of the pandemic. Many retailers are struggling with the infrastructure and logistics to maximize this opportunity, presenting opportunities for companies like Payoneer.

Starting an Open API

  • Digital financial service providers generally use Open APIs to enable third party developers to create "financial inclusion services and products."

Summary

  • Several assumptions have been made concerning what is required. The Open API space in Fintech is incredibly broad and encompasses a range of unrelated markets. There is very little information beyond general definitions and analysis of the different uses of Open API. Any market landscape for Open API would be limited to these features. The companies operating within these different spheres are not generally considered competitors. Given Payoneer is used as an example throughout the instructions, we have focused on this aspect of the Open API market.
  • For the purposes of this research, we have assumed that questions relating to what is required to start an Open API are referring to the MVP for developer engagement.
  • Wonder is a secondary research company. We provide research based on information that is in the public domain. While we can find case studies of how companies have built products using Open API and how they have monetized them, we cannot develop a use case and determine how to monetize it. It should be noted; there was almost no information available in the public domain as to how to monetize a use case. This is likely because the information is commercially sensitive. A link has been provided to Payoneer use cases. The competitive analysis suggested below incorporates many of the elements typically included in a case study.


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