数字金融服务提供商的API定价:入门.pdf
API Pricing for Digital Financial Service Providers Getting Started Mark Boyd, Michel Hanouch, and Claudia McKay A Technical NoteAPI Pricing for Digital Financial Service Providers Getting Started A Technical NoteApril 2019 Mark Boyd, Michel Hanouch, and Claudia McKayConsultative Group to Assist the Poor 1818 H Street NW, MSN IS7-700 Washington DC 20433 Internet www.cgap.org Email cgapworldbank.org Telephone 1 202 473 9594 Rights and Permissions This work is available under the Creative Commons Attribution 4.0 International Public License https//creativecommons.org/licenses/by/4.0/. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions AttributionCite the work as follows Boyd, Mark, Michel Hanouch, and Claudia McKay. 2019. “API Pricing for Digital Financial Service Providers Getting Started.” Technical Note. Washington, D.C. CGAP. TranslationsIf you create a translation of this work-, add the following disclaimer along with the attribution This translation was not created by CGAP/World Bank and should not be considered an official translation. CGAP/World Bank shall not be liable for any content or error in this translation. AdaptationsIf you create an adaptation of this work, please add the following disclaimer along with the attribution This is an adaptation of an original work by CGAP/World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by CGAP/World Bank. All queries on rights and licenses should be addressed to CGAP Publications, 1818 H Street, NW, MSN IS7-700, Washington, DC 20433 USA; e-mail cgapworldbank.org iii cutive Summary Digital financial services DFS providers face several challenges when developing pricing strategies for open application programming interfaces APIs. They must balance their own business objectives, including the need to achieve a return on investment, with the needs of API consumers to experiment and learn as they build and grow their busi- nesses. This guide aims to help DFS providers navigate these challenges and devise pricing strategies that do the following Support the DFS provider to achieve specific business objectives. Providers should start with clear business objectives and understand which APIs will help them achieve these objectivesand how. The pricing strategy for each API needs to support these objec- tives. In Zambia and Malawi, for example, DFS provider Zoona’s strategy focuses on growing its customer base rather than revenue, hence, its APIs are designed to attract third-party developers who can create products that will attract new customers. Generate business value for each target API consumer segment. Providers should seg- ment their API consumers and help them to understand the value each segment expects to get from APIs and their willingness to pay. For example, a corporate or nonprofit like Save the Children Fund that is using APIs to reduce inefficiencies might expect to immediately reduce costs and, therefore, be willing to pay right away. In contrast, a fintech or start-up that is using APIs to create new products is taking more risk and may want time to experiment before paying fees. Align with or modify prent market expectations and norms for pricing. Provid- ers should try to understand how others are pricing open APIs in their markets and globally. Pricing models vary based on the type of API. MTN Uganda, for example, chose to keep its pricing simple, offering its payment APIs for free, while earning rev- enue based on the value of the underlying transactionin line with existing market practices. Where API providers plan to take a different approach to pricing, the new approach should be tested with third-party API consumers before being introduced. Ultimately, providers will need to make some assumptions and set a price, knowing that pricing will be dynamic and evolve as they learn and as markets develop. 1 Introduction Open APIs can turn a digital financial services DFS provider’s plat into “digi- tal rails” that facilitate the onboarding of third parties i.e., the businesses that are the consumers of the APIs quickly and efficiently Morawczynski et al. 2016. 1They enable these third-party businesses to innovate and build new products and services for their customers. Pricing APIs is different than pricing other DFS products because end customers are one step removed from the provider. DFS providers that offer open APIs need to ensure their API pricing strategies encourage experimentation and leave room for third-party API consumers to build and grow businesses. A good pricing strategy must offer value to third parties while enabling the DFS provider to achieve a return on its investment. Pric- ing open APIs is new for many DFS providers. They will need to take a dynamic approach to their business models and allow them to evolve over time. This guide helps DFS providers define a pricing strategy for their API products. It draws from desktop research, industry discussions, and work with CGAP partners to ar- rive at three goals a successful open API pricing strategy needs to achieve. 2The strategy needs to do the following Goal 1 Support the DFS provider to achieve specific business objectives. Goal 2 Generate business value for each target segment of third-party API consumers. Goal 3 Align with or successfully modify prent market expectations and norms for pricing. Goal 1 Support the DFS provider to achieve specific business objectives DFS providers first need to decide which APIs to open and how each of these APIs is intended to help the business achieve its overall objectives. 3 API Pricing for Digital Financial Service Providers Getting Started 1APIs can fall along a spectrum from internal APIs that are reserved for use by developers working within, or on behalf of, the organization only to partner APIs that are made available to selected partners only, to open APIs that are more broadly available. CGAP’s focus is on open APIs. See “Open API Strategies How to Plan for Success,” CGAP, https//www.cgap.org/topics/collections/open-apis. 2For this project, CGAP is working with five DFS providers and supports them technically and strategically as they go through a process of opening their APIs. The providers are Absa Bank in South Africa, BTPN in Indonesia, MTN Uganda, Wave Money in Myanmar, and Zoona in Zambia and Malawi. 3For a description of the main types of APIs DFS providers are opening, see Boyd and Hanouch 2018.2 API Pricing for Digital Financial Service Providers Getting Started In the case of merchant payments, the objective is to make the DFS provider’s pay- ment acceptance network as widely available as possible. This would make it easy for customers to use the provider’s mobile wallet wherever they make a purchase and for them to choose the provider’s payments system rather than a competitor’s or cash. The primary business objective for this API is to increase transactions and market share, not raise direct API revenue. The API product itself is not priced to bring in new income, although the increased use of the expanded merchant acceptance network via APIs in- creases payment transaction revenue. Zoona’s API strategy, discussed in Box 1, similarly has an initial focus on scale over revenue. In contrast, the objective for a data API might be to monetize an unused digital as- set such as customer transaction data. In that case, the idea is to generate new revenue streams immediately and, therefore, may involve a per API fee. In some cases, an API product may create digital access to a service or enable third parties to deliver products that compete with the DFS provider’s traditional core offer- ing. Sometimes, the internal team releasing the API and the team working on a more Box 1. How Zoona expects APIs to help its core business a DFS provider Zoona, based in Zambia and Malawi, offers money transfers, sav- ings wallets, bill payments, and bulk payments for businesses through a network of over 2,500 agents. Most of these transactions are done over the counter. The Zoona team has strong on-the-ground knowledge of local community needs and has built trust with underserved customers. It is acutely aware of pressures from new and established competitors and increasing demands from customers who also have bor- rowing and spending needs, for example. “We are committed to keeping agent and customer needs at the center of our innovation and new product design. But we can’t build all of the innovative new products straight away. By opening APIs, we can work with selected third parties to expand the services we offer and make more products available to current and new customers,” says Brett Magrath, co-founder and chief product officer at Zoona. Zoona’s open API strategy focuses on scaling the Zoona customer base. Currently, monetizing APIs is less of a business driver than is strengthening relationships by giving customers more reasons to use Zoona agents and accounts. aThis ination is accurate as of 21 November 2018. API Pricing for Digital Financial Service Providers Getting Started 3 traditional product are in different business units. As customers may move from the traditional product to the solution enabled by the new API, revenues may shift across the lines of the business or there may even be a net loss to the business. Management will need to address the internal conflicts that result. Senior management will need to determine the impact this shift will have on the businessirrespective of individual key perance indicators and bonusesand distinguish between short- and long-term rev- enue implications. The level of investment and operating costs to open APIs should be proportional to the value of the business objectives being pursued and to the risks involved e.g., the level of uncertainty in the ultimate uptake and the impact on the business of opening APIs. Estimating the operating costs of providing APIs is a challenge because APIs are a fairly new product for DFS providers in emerging markets. APIs may require providers to invest in new staff expertise, processes, and technology. However, investment costs are controlled by the DFS provider, and given the experimental nature of opening APIs, they generally should keep upfront investment costs low. Zoona kept its costs low by making minimal fixed investment upfront in its API management plat. It chose a well-established API management infrastructure service that offers a SaaS subscription model. And it selected a basic service package to keep API infrastructure costs low until demand picks up and the basic package no longer serves its needs. Achieving Goal 1 1. Align each API product to a specific business objective. How does the API align with the overarching business objectives What business objective will the API help achieve Is the overall goal to generate new revenue directly from the API or is it to primarily drive indirect revenue such as through increased transaction volumes Is it more important to strengthen the existing customer base or to maximize growth of new customers Is there a risk of revenue cannibalization, and if so, how can that risk be monitored and managed And how, if at all, do the answers to these questions differ when considering the short- versus the long-term horizon 2. Articulate and agree on financial goals and level of investment that reflect business objectives. Management needs to determine how much it is willing to invest upfront in creating an open API business, and how long it will take to see a return on this investment in line with achieving business objectives. Avoid making big infrastructure investments upfront. Short-term time frames may also be set to define expectations on return on operating costs.4 API Pricing for Digital Financial Service Providers Getting Started Goal 2 To generate business value for each target segment of third-party API consumers When DFS providers open up APIs, they are enabling new business partnerships with third parties. Each third-party segment that uses open APIs will have different needs and will perceive the value it receives from the APIs differently. To set the right pricing strategies for the market, providers should have a strong understanding of third-party API consumer segments, the value each segment thinks it will get from the APIs, and their willingness and capacity to pay. Several pricing experts say that value-based pricing is the most appropriate model for API products. 4 There are four common third-party segments that might use open APIs Creators e.g., fintechs, startups, and independent developers. This third-party seg- ment will want to use DFS provider APIs to create their own products. They need business functionality or data to develop these new solutions. For example, the Ni- gerian small loans app Paylater uses Paystack’s APIs to disburse loans and to allow customers to repay loans. 5 Enhancers e.g., small-scale traders and large retailers, utilities, and international busi- nesses. These businesses use APIs to improve, or enhance access to, their products and services. 6For example, Kenya Power uses Safaricom’s APIs to let its customers pay their bills through M-PESA. In Brazil, international accommodation plat Airbnb integrates Elo APIs to enable a local payment option. 7 Efficiency drivers e.g., corporations and nonprofits. This segment may want to speed up internal processes and reduce inefficiencies by using APIs. For example, Save the Children Fund uses Beyonic’s payments API to reduce costs and risks associated with paying a disperse, remote workforce, while MTN Uganda offers an API for payers to validate whether recipients are active account holders and able to receive funds thus reducing potential time-consuming reconciliation challenges Beyonic 2016. Aggregators. Payments aggregators may be considered a specific third-party seg- ment because they can help to widen the reach of APIs to businesses that have lim- ited technology skills and that prefer to pay extra to have the integration managed 4Including, e.g., Simon Kucher Partners and Software Pricing Partners. Value-based pricing requires prices that are set “based on the value of a product as perceived from the customer’s perspective” “ Financial Times, accessed 12 February 2019, http// 5See, “Unlocking the Power of Money for All People,” Pay Later, https//www.paylater.ng/ and “The Pay- stack Developer Documentation,” Paystack, https//developers.paystack.co/. 6This refers to businesses using payment APIs to help their customers pay or be paid more easily but it could also involve using a credit-scoring API, e.g., to improve the user experience for borrow