How Developers Are Transforming Payments to Work for Everyone
Tags: fintech, api, developer, payments
Published: 2022-12-15 19:25:26

## Democratization of Financial Services

Throughout history, banks and other financial institutions were the sole providers of financial services for society. But these financial services were costly, and mostly offered to the upper class. Of course, the core financial services such as bank accounts were offered to most people. But many were prevented from participating in all the services offered. This lack of access has existed to this day in areas where developers are leveraging technology to open doors for everyone. 

Fintech has provided an opportunity for democratizing financial services. For example, fintech is being utilized in South America and Africa to help accelerate economic growth by filling in gaps not covered by their existing financial systems. 

The emergence of open banking has also democratized services, with fintech allowing customers of traditional banks to gain access to and leverage their own financial information. Open banking refers to how bank accounts can be linked to third party services, platforms, or apps with the permission of the user to facilitate financial transactions. Business transactions and online shopping are often used with open banking. Fintech companies are able to fill niches and offer a better customer experience than what banks had traditionally offered. 


## What is a Fintech Ecosystem?

Think of the fintech ecosystem as a network. This network is composed of many different elements: banks, APIs, fintech companies, customers, and developers. The traditional banks still provide the foundation of this ecosystem because although fintech companies are an alternative source of financial services, they are not replacing banks. 

But fintech companies often act as connections between banks and consumers, providing infrastructure so the user does not have to wade through the limitations and requirements of the traditional banking system. 

Developers form an important component in this network; in a way, they act as the glue. Developers integrate companies and users to fintech APIs, which then increases the average user’s access to these financial networks. Then, there are the fintech developers building out these networks and infrastructure at fintech companies. 

But the most important aspect of the fintech ecosystem is that each element is interconnected and affects the other elements. One example is how a fintech platform offers local payment methods to customers while empowering them to do business in a global economy with new and current payment methods. The pressure that fintech companies exerted on traditional banks forced everyone to become better and ultimately provide the best service possible to the consumer.  
   

## A Democratized Fintech Landscape

When Fintech emerged in the early 2000s, the use of technology was combined with financial services. This use of technology allowed fintech startups to offer core financial services and offerings to a wider audience, and for a lower price. This helped to “democratize” financial services by allowing these services to be offered equally to all, instead of carefully doled out to a select few. 

Fintech has also democratized financial services by promoting inclusion, and increasing the number of people who interact with the financial system. Those outside of the traditional financial system utilize fintech apps and other offerings to leverage their business’s finances and gain access to services for a fraction of the cost. 

Traditional banks were forced to compete as a result by slashing the prices and fees attached to their services. In other instances, traditional banks have partnered with, or acquired fintech companies in order to expand their product offerings to new audiences. 

With the emergence of the fintech ecosystem, the traditional financial system no longer operated in a vacuum, but was forced to adapt to a financial landscape that was more accessible and equitable. This increase in competition has forced innovative solutions to solve complex problems.  


## Developers and the Fintech Ecosystem 

Developers are integral to the fintech ecosystem. In other words, they are the [star of the show](https://community.rapyd.net/t/fintech-apis-will-eat-the-world-video/58107). Developers are creating, building, and connecting a global financial network that allows widespread participation in financial services. This increases the size of the ecosystem when more members are introduced into it. 

APIs are used to connect different financial networks and services. Think of the APIs as bridges. The developers are the bridge builders and operators, people who keep the bridges open and functioning. Developers build roads connected to the bridges when they integrate an API into a different app or service. 

What is the bottom line? More people have greater control over their finances for a lower price. Developers leverage fintech to make the entire process cheaper and more efficient. Through their efforts, the world becomes a better, more democratic place.