MasterCard Inc. has confirmed what many suspected: that is application programming interface, or API, offerings are leading to a larger population of smaller clients at the payments network.

At a NYPAY Meetup last night in New York, Brien Buckman, who heads MasterCard’s API skunk works at the payment company’s swank Tech Hub in New York, said before MC turned to APIs, it could generally only partner with larger enterprises because the cost of development and data exchange was so high.

“The cost is so much lower,” said Buckman of APIs, “it allows MasterCard to work with a whole host of new companies.”

That includes companies like Stripe, Green Dot, Web.com and Kount.

At MasterCard’s Tech Hub — in the hip part of Manhattan, right on Silicon Alley — the innovation efforts are divided into three teams: digital enabling services; MasterPass, its mobile payments solution; and APIs.

Buckman said MC has vastly beefed up its API team in a relatively short amount of time. Originally, he was asked to work on APIs, apparently because there was no one else at MasterCard who would. In short order, he was captaining the company’s API efforts. The company now offers about 20 APIs.

The event was intended to educate attendees on APIs, and the virtues of easier data exchange between enterprises were extolled extensively. The API revenue model was not detailed to the same degree, and this was the most interesting aspect of the API discuss. Buckman was joined on the panel by Marqeta‘s head of product, Dave Matter. Marqeta’s entire business model centers on providing issuer processing APIs. Matter made it clear that its pricing model is not centered on transactions, but designed to encourage volume usage.

Well, of course, MasterCard’s business model is centered on transactional pricing. How MasterCard will fare in the face of pricing pressure from Marqeta and other disrupters which remove the per-transaction cost in favor of flat pricing via APIs is the key question. Matter and Buckman both maintained last night that the API ecosystem “creates value,” and while that might not make revenue opportunities apparent right away, such opportunities will evolve over time.

“Something greater will happen,” Buckman said.

The real play, however — and I have never heard an API provider own up to this — seems to be pricing leverage over time. Marqeta, for example, by embedding itself into an application’s payments architecture, has the potential to slowly leverage that unique position for greater revenue. After all, will any Marqeta client flippantly swap out Marqeta code as a consumer tosses one credit card for another?

* * *

NOTEWORTHY: Capgemini, the technology consulting firm, is working on a project to catalog all blockchain APIs. The project appears to be originating out of Capgemini’s New York office.