PayPal recently ate a large slice of humble pie, acknowledging that it lost out on potential new business. The story goes that PayPal's service was never very developer-friendly. The online-payment company assumed developers would incorporate their service in the mobile apps and web pages, but PayPal didn't exactly go out of their way to make this easy.
That's all about to change. Or so PayPal hopes. PayPal made two big moves recently. First PayPal acquired StackMob, a mobile platform offering lots of SDKs, including tools to incorporate third-party payment services in a mobile app. After that, PayPal merged with Braintree, a company known for excellent developer relations.
It must be nice to be a big company like the PayPal / eBay conglomerate. When they want something, they just go and buy a company that provides it.
For small businesses and freelance developers, the news offers a way to explore the complex nature of developer / service provider relationship. Let's take a close look at what you are responsible for when you use a third-party service in one of your apps.
Developer Liability: Headaches from Working with Third-Party Service Providers
The news from PayPal points out two liabilities developers have when working with a third-party service like PayPal…
- Working with mainstream services isn't always easy. Some vendors and service providers don't make things easy for developers. Their tools might not "play nice" with HTML 5 or iOS. Unfortunately, the developer still has to find ways to make it work. This can mean late nights working to find cross-platform solutions and debugging.
- Problems integrating third-party services can lead to lawsuits. It stinks to be caught in the middle, but that's the nature of web app, software, and mobile development. You often use third-party services (e.g., cloud-based data management, payment services, etc.) in your applications. But these services might not work on every device, they might have problems scaling, or the service provider could be hit with a data breach. If a third-party service has a problem, it becomes your problem as outages and poor performance cause problems with your app. If your app falters, you can be sued by clients regardless of whether the problem was caused by your coding or a third-party outage.
(To make matters worse, programming languages and platforms can also have vulnerabilities that expose you to a lawsuit. To learn more, read our blog post, "Stale Coffee: Old Versions of Java Expose Programmers to Cyber Liability").
E&O Insurance: The Cure for the Common Apps Liability
So what do you do about these liabilities? First and foremost, you need write good code and stay abreast of new resources in the development community. A new, easy-to-use payment resource could save you a lot of time and effort.
Second, you need to guard your business from lawsuits. Because you're liable for a service provider’s product, you need to be extra cautious. Errors and Omissions Insurance covers your professional liabilities, which include lawsuits caused by problems with a third-party service.
Let's say you use a cloud-based data management tool to track customer purchases for a client. If there's a data breach on the cloud servers or their slow service causes your app to lag, you can be responsible even when you didn't do anything wrong.
Working with third parties is a necessary part of being a developer. They can save you time and you can take advantage of their secure networks to host and process data. But as PayPal's problems remind us, not every third-party service provider is created equal. Some make products that won't work well with certain platforms. Others can have unexpected server outages. Make sure to protect your business from professional liabilities with E and O Insurance.
