CGAP has
identified comprehensive documentation, stability, easy access, and tracking as important elements for success of open API ecosystems. Based on a recent study done by
MicroSave on use of APIs with a client, users evaluate the effectiveness of the APIs based on the following parameters:
Properly designed APIs provide benefits to both providers and users, along with a positive impact on customers.
a) Providers: 
• New revenue stream: Providers can capitalise on their existing assets, i.e. software and hardware, by providing their APIs to other companies on payment of a fee.
• Increased outreach: They can reach out to a larger customer base, through partners, without incurring high costs of distribution.
• Better utilisation: Providers can use their hardware effectively and can reap benefit of economies of scale.
• Future proofing: It is difficult to accurately predict the future. Open APIs can help providers a piece of the pie, even on unknown trends, as highlighted by CGAP based on M-PESA’s open APIs.
b) Clients (API Users):
• Time and cost reduction: A significant reduction in the time for go-to-market can be seen by riding on the existing stable platform, instead of developing the complex software. The users can not only reduce the cost of development, but also avoid sinking high one-time capital cost towards hardware.
• Scalability: Instead of worrying on scaling up of software and hardware, the clients can focus on distribution and scale quickly.
• Innovative solution: The clients have to build on the basic APIs exposed by the providers. This enables them to design and provide innovative solutions on top of the basic services provided by the API provider. Such customised solutions can provide unique services and experience to users, in line with local needs.
c) Impact on Customers:
• Convenience and experience: Properly designed and tailored services made available at the doorstep of citizens translates into convenience, and better experience. Even marginalised consumers will be able to choose providers and consume digital services according to their need.
Conclusion
Going by the global experience, a set of open, well-documented APIs provide enormous benefits to providers and clients. They also help improve customer experience.
API providers need to ensure easier integration, customer support, and scalability, while maintaining the security of financial transactions. Clients need to be sure of antecedents and capabilities of service providers as they scale up their businesses.
Today, there is tremendous amount of innovation around open APIs. The Government of India has taken early steps to fuel it through its ambitious Digital India plan. The possibilities of open APIs will only be limited by creativity, imagination, and business requirements.