Online finance helps programmers cash in

There was a time when online banking was a niche feature, mostly viewed with suspicion by a public more used to a human interface. New research however suggests that internet banking has now been so widely accepted that it has more adherents than even Facebook and Twitter.

The study, carried out by Nationwide Building Society, showed that while 77% now carry out their banking duties online, social media applications are used by just 58%.

Though figures based on a survey of 1,500 people can hardly be said to be truly representative, they make a point that is borne out elsewhere – most notably by the ferociousness with which the big credit card companies are seeking out independent programmers to help develop their online presence.

Over the past 12 months, MasterCard, Visa and American Express have spent more than £1.9 billion buying up Net-based payment processors. Most recently, MasterCard paid $526 million to buy payment company, DataCash Group.

No card issuer wants to be left behind in the brave new world of mobile-based payments, resulting in the big-name card companies accepting the need to allow third-party developers to help engineer the software used in their products.

Nevertheless, it’s something of an uphill struggle.

PayPal are already forecast by the Mercator Advisory Group to be processing 13% of e-commerce payments by 2012. If card companies hope to remain at the forefront of the payments game, they know that they need to help consumers make online payments quickly, minus the requirement of repetitively filling out card numbers and billing addresses.

In the future, payments can be made by simply entering a username and password. This will have application in anything from Smartphone games, where players can by add-ons by clicking on a Visa logo, to paying a restaurant bill.

The card companies’ new all-embracing attitude is a far cry from their blank-eyed rejection of integrated technologies just over a decade ago.

In 1999, Marc Andreessen developed the world’s first mainstream web browser and approached card networks in the hope of enlisting their support for integrating credit-card payment functions into his software. He didn’t get a single positive response. “There was too wide of a culture gap,” Andreessen admitted recently.

The advent of PayPal has been a wake-up call for the sleepy giants, with the result that they are finally joining the game with gusto – and bank balances to match. With card processors opening up their networks to third party developers, it seems that there’s never been a better time to be a programmer.

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Justin Schamotta is a senior staff writer for consumer site Choose (follow @choosenet). He specialises in covering credit card terms and right issues, as well as commentary on product and industry updates. The money section also covers personal loans, current accounts and savings - find more on choose.net.