August 6, 2019
With 40 million users as of mid-2019, Venmo (a platform owned by PayPal) is proof of the popularity of mobile payments. Venmo is just one of many third-party payment platforms that uses screen scraping to provide its users with a convenient, streamlined experience. But what is screen scraping, and how is it transforming mobile payments? Here's what you need to know:
Web scraping involves the extraction of a high volume of data from a website, usually through an automated process. Screen scraping, on the other hand, involves collecting screen display data and translating into another application.
The main purpose of web scraping is to access alternative web data through non-traditional resources like social networks, industry blogs, and news publications. This provides users with in-depth insights that can greatly improve their decision-making. For example, an equity research firm might use web scraping to aggregate several news articles to evaluate a company’s financials.
There’s also web data integration, a more robust solution that helps companies significantly improve their data quality. This is critical to a company's bottom line. Gary Read, CEO of Import.io, said, “IBM estimates that poor-quality data costs businesses in the US more than $3 trillion annually. An end-to-end web data integration strategy is game-changing for those serving the financial sector, e-commerce, or other data-driven businesses.”
Screen scraping differs from web scraping in that its purpose is to take display data from an application and display it on another interface. An example of this would be an online money management app like Intuit Mint accessing a user’s financial data and displaying it on their interface.
This technology has had a tremendous impact on the FinTech industry in recent years. One of the more common applications involves third-party companies accessing their customers’ financial information and creating a mirrored experience on their own platform. For instance, a customer could log in using the same username and password from their banking login page.
From there, screen scraping is able to copy data from a customer’s bank and use it externally in the third-party company’s app or software. That way, customers can conveniently make payments through mobile apps, as well as manage their money.
An added benefit is that these apps keep track of each transaction that’s made to provide customers with detailed analytics on their spending habits. So they can keep close tabs on their spending, budget more efficiently, and have more control over their finances.
Like any other form of technology, screen scraping has its pros and cons. On the positive side, it creates a level of convenience that’s very attractive to many banking customers. It enables them to use third-party platforms to both pay for goods and manage their money using a single interface.
And while some experts believe that using redirection hurts the user experience, the success of “Login with Google” or “Login with Facebook” proves otherwise. These are two forms of redirection that have had immense success and become ubiquitous. Screen scraping utilizes a similar practice and has the potential to create an even better user experience if the customer is already logged in to their bank because it prevents them from having to re-enter their login information.
However, screen scraping is certainly not without its downsides. “Despite the usefulness of this technology, shortcomings remain in security and speed,” explains Kelly Read-Parish, Head of Strategy & Operations at Credit Kudos. “Large pools of data can take screen scraping tools 5–10 minutes to retrieve. Passwords and additional security information, once passed to a third party, becomes more vulnerable to loss.”
This puts a customer’s credentials at a greater risk since there are multiple parties involved in the chain between a user and their banking account. And due to the lack of strong user authentication, this increases the likelihood of fraud. The problem with attempting to add additional layers of security is that it often ends up hurting the user experience. So even if a FinTech makes great strides in heightening security, the frustration it creates for users may negate its impact.
Though screen scraping is still a fairly new concept, mobile payment usage penetration has caught on throughout much of the world. A report by McKinsey & Company predicts that “US in-person use of digital wallets will increase at a 45% CAGR to reach $400 billion in annual flows by 2022.”
Screen scraping technology is integral to mobile payments and plays a key role in feeding customers their banking information in third-party applications. While it does pose some concerns, it has by and large been a transformative force with the potential to take the FinTech industry to new heights.