Paypal – Innovation In Assembly

As we have mentioned in previous posts a platform will beat an application nearly every time. This is due to an application being an isolated service that only draws users directly interested in the service, however a platform allows users with varying demands and needs to use the platform as a base for a unique use. An example of this is a desktop being a platform for programs and the internet being a platform for websites, however more recently even websites are becoming platforms too. This is what will be explored this week in the following post!

Paypal

For this case study we will be looking at the online website Paypal and how it has provided its service as a platform for developers and merchants alike through the creation of easy to use API’s. Paypal is a well known e-commerce business that provides users with the ability to send and receive payments through the internet via a secure channel. It has become a powerhouse in this respect by allowing its services to be integrated into other’s websites (notably Ebay, Amazon, etc) to generate a larger amount of users and to facilitate this it has followed the best practices listed below.

1. Offer APIs to your service

API’s stand for Application Programming Interfaces and are used to allow users to easily develop programs around the service provided by Paypal. Paypal offers a wide range of API’s to developers to design front-end applications which can interact with Paypal’s data to provide easy ways to receive and transfer payments (along with other features). These API’s include both web and mobile versions including a Paypal iOS SDK and standardized web development through REST.

2. Design for Remixability

To design for remixability means to provide the content and information in the smallest available part, for Paypal this means that it allows access to individual users and merchants as well as providing the features for accepting payments, making payments, refunding payments, along with other features, all provided individually. Therefore this allows developers to just use the features or data they need, and gives them the ability to combine these features to meet their needs.

3. Apply API Best Practices

These include focusing on providing genuine developer support (such as forums, blogs, mailing list, etc) along with full documentation and sample code, all on multiple standardized formats. Paypal does this through their developer portal which provides full documentation, support and sample code for mobile and web development. This provides an easy adoption of the service API’s by developers which will increase the growth of applications created.

4. Use Existing Standards

Developers will be more inclined to use your API’s if you provide them with standardized access to your content to remove the barrier of adoption, if you sway too far from these standards then it could reduce the amount of developers who will try to learn your API. Paypal uses the well-known SOAP and REST standards for web API’s therefore allowing more developers to easily begin creating applications and also provides an iOS SDK for mobile applications.

5. Build your Business model into your API

It is important to base your API’s on the core business strengths provided by your service, Paypal’s main function is to provide an easy way for payments to be received and sent, therefore its API’s are developed around that functionality. Paypal realized that more people would use its product if they could easily use Paypal’s functionality directly on their web pages so allowed the development of their services in websites and apps.

6. Be your own Platform Customer

By using your own platform to develop additional services you can increase the quality of applications created by creating real-world, close to home applications. This can therefore reduce the costs for users to reuse these applications. Paypal has done this by creating its own ready to paste html code for users to copy into their websites to allow transfer of payments to a merchant easily. This therefore creates a simple and free way to incorporate the Paypal service into other’s websites with little development knowledge.

API's help make developing programs simpler.

API’s help make creating programs simpler for the developer.

By providing your service as a platform rather than an application you are able to reach a wider base of users who will reinvent the way your service is used and maximize the potential for others to use your system. It is therefore a very good way to increase the demand for your service and by discovering how others are using your service platform you can redesign your service accordingly to stay competitive in the market.

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2 thoughts on “Paypal – Innovation In Assembly

  1. Hi David,

    PayPal is doing a good job. Through its API its providing most of its core business strengths. It is very popular because it allows any website to easily receive payments from anyone, while PayPal benefits by charging transaction fees. Right now the API does not allow to customize (through CSS) PayPal’s paying page, see http://tinyurl.com/c3v6lth. This could be something they could look into for future API updates. However, I do believe part of the reason they do not allow the paying page to be customizable is because of security concerns. They may want to keep the paying page consistent, so that users can easily recognize it and trust it.

    Thanks!

    • Thanks for the comprehensive reply.

      You make a very valid point, developers would love the extra functionality they could gain from being able to alter PayPal’s paying page however as you mentioned I think the security risks are just too high to allow this. Users are familiar with the current layout of the payment page and by seeing it altered could see it as a threat to enter their credit card number into (as it rightfully could be).

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