[ATOM] An ode to fintech middleware
Original tweet thread:
Full post:
Something that feels lost in the controversy: why are we hating on middleware? It's like hating a universal adapter b/c it doesn't plug directly into the outlet (but only for X region). Reality is that at real scale, a single direct API provider won't have max coverage.
So if my fintech needs more API coverage than my single provider, do I: A. Deal w/ single provider w/o max coverage? B. Build basic internal middleware to connect to multiple providers for max coverage? C. Integrate with middleware for max coverage? What's so wrong with C?
With (A) it's awful when you spend time building a dedicated connection w/ one provider only to realize it doesn't work for all use cases or w/ your volume growth. Or w/ (B) you get hugely slowed down by building an internal solution that can handle a waterfall of providers.
And it's not just API coverage where this is useful, if you need 2+ of any service in your fintech, you're prob going to need to build or use middleware. Most common might be bank connections, payroll APIs, KYC but can expand to sponsor banks, BPOs, card printers etc.
I get that it's cool to build the direct connection and that service is incredibly valuable and essential. It's also very difficult and hard to get perfect. Middleware can expand that single direct connection into a full platform for real scale and flexibility (e.g. BaaS).
So actually I'll tip my hat to middleware that get a bad rap & are prob getting squeezed by customers & direct API providers on pricing / margin. We all benefit from coverage & flexibility they provide even though they can be relegated to a secondary position in ecosystem.