One of the newest location-based payment apps came out of Brett Neese's house on a Friday night.

The project began when the alternative payments provider Dwolla released fresh code in early November as part of its software development kit. "I downloaded the code and started working on it after school," says Neese, a 20-year old political science student at Iowa State University.

Neese doesn't have a lot of formal technology training, but he used the code to build PayHere, an iPhone app that allows consumers to access a nearby list of companies to pay by tapping on their mobile phone's screen. The payment can be accepted by merchants with a Dwolla account. "It's cool that you can build a way to move money in less than 10 lines of code," Neese says.

Dwolla's software development kit and application programming interface are available to the general public. Dwolla acts as the processor and ensures compliance with security protocols and regulations. "I'd heard a lot about Dwolla, being from Des Moines [where the company is based], and wanted to check out what I could do," Neese says.

PayHere is meant for small businesses, restaurants, bars and coffee shops. These are places where patrons would be able to pay with minimal navigation, Neese says.

This is an improvement over the way Dwolla designed its own app, says Jordan Lampe, builder and director of communications at Dwolla.

"Our own app takes one click to get to the location-based feature," Lampe says. "He was able to create a user interface at login to automatically see the list."

Dwolla does not split its processing fee, which is 25 cents for transactions over $10, with developer partners, though Neese and others can monetize their apps by charging a fee on top of Dwolla's. Neese’s app is free, though he may sell advertising on the app to generate revenue.

Lampe did not say how many payment products have been developed via Dwolla's open development platform over the past two years, though he says it's a major place to spot ideas. "We're relying on awesome people to create new innovation," Lampe says.

Other companies such as Stripe, Jumio and eBay/PayPal's Braintree make their own technology available to consumers and businesses to build payments products.

The trend has been to make the technology easier to use to attract non-programmers and smaller businesses that don't have an IT staff. MoonClerk, for example, has partnered with Stripe to ease development work for novices.

Companies like Stripe and Braintree have created immense value by offering a model that allows small businesses to easily and elegantly offer online and mobile payment options to their customers, says Deepti Sahi, group product manager of money movement for Digital Insight.

"This digital payment ubiquity prevents the need for a merchant account and allows you to build your own payment forms that can bypass" the compliance process for the Payment Card Industry data security standards, Sahi says.

Another example is MasterCard's wallet, Sahi says. "MasterCard, through its MasterPass wallet, allows any developer's branded digital wallet to be MasterPass-connected providing their customers the benefit of a safe, convenient and smart way to check out wherever MasterPass is accepted."

It's also common for payments companies to seek out young people to build new technology. Young adults designed Bitcoin apps at a recent hackathon hosted by Oink; while Ryerson University in Toronto operates an incubator for mostly younger technology developers, who work under the supervision of a University program.

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