BusinessShould I use third-party software in my web or mobile app?

Explore the benefits and risks of third party apps and software in mobile and web platforms, covering security, and cost-effectiveness for businesses.
Updated at17.01.2024
Published at30.11.2023
Marcin Sadowski
Marcin Sadowski

CTO @ JS and Web3 Expert

Table of contents

  1. Introduction
  2. Understanding Third-Party Software
  3. Conclusion
  4. Exploring the Business Facets of Software Development

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Introduction

In the rapidly evolving landscape of digital technology, the integration of third-party software into web and mobile applications has become a critical consideration for businesses. As companies strive to enhance their online presence and streamline their operations, the dilemma of choosing between third-party apps and custom apps becomes increasingly prominent. Third-party apps, extending from essential services to ERP applications, offer a plethora of functionalities that can significantly boost a business's efficiency and customer engagement. However, this comes with its own set of challenges and decisions, particularly when navigating the complex world of app stores, both official and unofficial, and managing app permissions.

The use of third-party software, whether on a mobile device or through a web-based platform, presents a unique set of opportunities and risks. As businesses weigh the benefits of incorporating these versatile applications against the potential risks of security and compatibility, understanding the landscape of third-party integrations, from Apple's and Google's official stores to the realm of unofficial app stores, becomes crucial. This article aims to shed light on the various aspects of third-party software integration, helping businesses to make informed decisions that align with their growth objectives and ensure a robust, secure, and efficient digital environment for their customers.

Understanding Third-Party Software

In the digital age, third-party integration has become a ubiquitous aspect of both web and mobile applications, playing a pivotal role in enhancing user experiences and business functionalities. But what third party applications are? In essence, third-party software, apps, and applications are those developed by entities other than the original manufacturer of the device or the primary software developers. This is in contrast to custom apps, which are tailored specifically for a business’s unique needs.

Third-party applications range from supplementary tools and services to comprehensive systems like ERP (Enterprise Resource Planning) applications. They are not only prevalent in app stores like those managed by Apple and Google but also available through various unofficial channels. These applications can be integrated into existing systems to provide additional functionality or to fill gaps that custom software might not address.

The use of third-party apps in business is widespread due to their ability to offer versatile solutions without the need for extensive in-house development. For instance, a business might use a third-party dealer management system to streamline its operations, or integrate a third-party ERP system to enhance its overall ERP experience. This not only saves time and resources but also provides access to advanced technologies and innovations that might be beyond the scope of custom development.

However, with this convenience comes the responsibility of ensuring compatibility and security. When integrating third-party software, businesses must consider how these applications interact with existing systems, the data they access, and the permissions they require. This is especially crucial in mobile environments where apps from various sources, including unofficial app stores, might pose security risks or affect the overall performance of the device.

In summary, third-party software offers a range of solutions that can be integral to a business’s growth and efficiency. However, understanding their functionality, the differences between official and unofficial sources, and the balance between convenience and security is essential for making informed decisions in the complex landscape of digital applications.

Are you looking for software provider to integrate your system with 3rd party application?

As Mobile Reality we deeply specialize in the custom software solutions. We provide our Clients with end-to-end software development services. Don't hesitate to contact us.
CEO of Mobile Reality
Matt Sadowski
CEO
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+1 718 618 4307
hello@themobilereality.com
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Different Types of Third Party Softwares

In the realm of web and mobile applications, third-party software encompasses a diverse range of tools and services, each catering to specific aspects of business operations and customer experiences. Understanding the different types of third-party applications is crucial for businesses aiming to leverage these tools for growth and efficiency. Here, we explore some key varieties of third-party software, including identity and access management software, payment processing tools, KYC and AML software, digital wallets, accounting software, and third-party APIs.

Identity and Access Management Software

Identity Access Management and User Management

Identity and access management (IAM) software plays a critical role in ensuring the security and efficiency of both web and mobile platforms. These third-party applications manage user identities and control access to resources within a system, thereby enhancing security and streamlining user experience. If you are interested in using 3rd party app for IAM and user management feel free to check out our article about TOP 10 Identity and Access Management (IAM) and User Management Tools.

Payment Software

Mobile Reality Blink Payments Partnership

Payment software, encompassing payment gateways and payment acquirers, is essential for businesses conducting transactions online. This third party integration facilitates secure and efficient financial transactions between customers and businesses. Payment gateways act as intermediaries, ensuring secure transfer of payment information, while payment acquirers process these transactions, making them a staple in e-commerce and mobile commerce environments. If you are looking for a trusted payment provider please definitely check out our partner Blink.

KYC and AML Software

best KYC AML software

With the increasing emphasis on regulatory compliance, Know Your Customer (KYC) and Anti-Money Laundering (AML) software have become indispensable for businesses. This third party software assists in verifying customer identities and monitoring transactions for suspicious activities, thereby helping businesses adhere to legal standards and prevent fraudulent activities. If you are interested in using a 3rd party app for IAM and user management, please check out our article about TOP 10 KYC & AML software companies in 2023.

Digital Wallets

Digital wallets offer a convenient and secure way for users to store and manage their payment information, such as credit card details and bank account numbers. Integrating digital wallet functionality into web and mobile applications enhances customer convenience and fosters a seamless transaction experience.

Accounting Software

For managing financial records and streamlining accounting processes, third-party accounting software is a valuable asset for businesses. These applications aid in tracking expenses, managing invoices, and generating financial reports, contributing to efficient financial management and decision-making.

3rd Party APIs

3rd Party APIs represent a crucial category of third-party software, particularly valued for their ability to enhance backend functionalities without the need for embedding frontend modules. These Application Programming Interfaces (APIs) act as conduits, allowing for seamless communication and data exchange between different software systems. This backend integration is a key aspect that makes 3rd party APIs both powerful and versatile in the realm of web and mobile application development.

Backend Integration

The primary role of third party API is in the backend, where they connect your application to external services and functionalities. This integration allows for the leveraging of complex processes and data from external sources, enriching the application's capabilities without the need for extensive internal development. For example, a business application can integrate a 3rd party payment processing API to handle transactions securely, or use a location-based service API to provide geographical data.

No Frontend Embedding Required

One of the significant advantages of using 3rd party APIs is that they do not necessitate changes or additions to the application's frontend. This means that the user interface and experience can remain unchanged, or be customized independently of the backend processes. This separation of concerns not only simplifies the integration process but also provides greater flexibility in designing the user interface. For instance, while integrating a 3rd party analytics API, the application can continue to maintain its unique frontend design while benefiting from sophisticated backend data analysis.

Streamlining Application Development

By focusing on backend integration, 3rd party APIs allow developers to streamline the application development process. Developers can concentrate on creating an optimal user experience on the frontend, while confidently relying on third-party services to handle complex backend tasks. This not only speeds up the development process but also ensures a higher level of reliability and performance, as the integrated APIs are typically well-tested and specialized in their respective functionalities.

Ensuring Scalability and Flexibility

Another important aspect of 3rd party APIs is their role in ensuring scalability and flexibility in application development. As business needs evolve, these APIs can be scaled to accommodate increased demand or additional functionalities. This scalability is crucial for businesses looking to grow and adapt in a dynamic digital landscape.

Each of these third-party software types addresses specific needs and challenges in a business environment. From enhancing security with IAM software to simplifying financial transactions with payment and accounting software, and ensuring compliance through KYC and AML tools, the integration of these applications and APIs can significantly impact a business's operational efficiency and customer satisfaction. As businesses continue to evolve in the digital space, the thoughtful selection and integration of these third-party tools become increasingly crucial for sustaining growth and staying competitive.

Advantages of Using Third-Party Software

The integration of third-party software into web and mobile applications offers numerous benefits that can significantly enhance business operations and user experiences. These advantages range from improved efficiency and functionality to cost savings and access to specialized expertise. Understanding these benefits can help businesses make informed decisions about incorporating third-party tools into their digital strategies.

Enhanced Functionality and User Experience

Third-party apps often bring specialized functionality that can be seamlessly integrated into existing systems. This enhances the overall user experience, offering features like advanced payment gateways for smoother transactions, digital wallets for convenient payments, and robust identity and access management for improved security. These enhancements are crucial for keeping an app or a platform competitive and user-friendly.

Access to Specialized Expertise

Developing complex functionalities from scratch requires significant resources and expertise. By using third-party software, businesses can leverage the expertise of specialists who are focused solely on their respective fields, such as KYC/AML compliance, payment processing, or accounting. This ensures that the business is using high-quality, sophisticated tools that are regularly updated to meet industry standards.

Cost-Effectiveness

One of the compelling advantages of third-party software is its cost-effectiveness compared to developing custom solutions. To illustrate, consider the financial implications of developing an in-house payment processing system versus integrating a third-party solution like Stripe, Blink or PayPal.

Developing such a system in-house can be costly, encompassing developer salaries, security certifications, and infrastructure. A modest team could cost between $150,000 to $250,000 for six months of development, plus an additional $100,000 to $150,000 for security and infrastructure, summing up to a significant initial investment.

In contrast, using a third-party payment gateway involves lower setup costs and transaction-based fees. For example, the setup cost for the advanced platform that includes the frontend side, mobile app, and backend side requires from two weeks to 1 month of the development process for a team of 3 developers (frontend dev, mobile dev, backend dev), one UX/UI designer, one QA, specialist and project management and business analysis support. The cost of a month of work for such a team can be between $10,000 to $25,000. Regarding transaction-based fees, Stripe's fee structure is around 2.9% + 30 cents per transaction. For a business processing $500,000 annually, this would equate to approximately $14,500 in fees per year, a fraction of the cost of in-house development.

This comparison underscores the potential for substantial cost savings with third-party software. Instead of bearing high upfront and ongoing development costs, businesses can leverage scalable and efficient third-party solutions, aligning their expenses with actual usage, which is essential for business growth.

Scalability and Flexibility

3rd party applications typically offer greater scalability and flexibility compared to custom-built solutions. As business needs evolve, these applications can be scaled up or down to accommodate changing requirements without the need for extensive redevelopment.

Time-Saving

Incorporating third-party application can significantly reduce the time to market for new features and functionalities. Instead of spending time on developing and testing new features, businesses can instantly integrate existing third-party solutions, allowing them to respond quickly to market changes and customer needs.

Staying Current with Technological Advances

Third-party software developers are often at the forefront of technological advancements. By integrating these solutions, businesses ensure that they are keeping up with the latest trends and innovations, which can be critical for staying relevant in a rapidly changing digital landscape.

In conclusion, the advantages of using third-party software in web and mobile applications are substantial. From enhancing user experience and accessing specialized expertise to achieving cost savings and staying current with technology, third-party solutions offer a viable and often necessary component for modern businesses looking to thrive in the digital age.

Are you looking for custom software development agency for your business?

As Mobile Reality we deeply specialize in the custom software solutions. We provide our Clients with end-to-end custom software development services. Don't hesitate to contact us.
CEO of Mobile Reality
Matt Sadowski
CEO
Or contact us:
North America
+1 718 618 4307
hello@themobilereality.com
European Union
+48 607 12 61 60
hello@themobilereality.com

Success!

Your message has been sent.

Our sales representative will contact you shortly.

The Risks and Challenges

While third-party software can offer numerous benefits to businesses, it also comes with its own set of risks and challenges. Being aware of these potential issues is essential for any business considering the integration of third-party tools into their web and mobile applications. From security concerns to compatibility issues, understanding these risks can help in mitigating them effectively.

Security Vulnerabilities

One of the primary concerns with third-party software is the risk of security vulnerabilities. These applications could potentially become gateways for malicious attacks if not properly vetted and secured. This is particularly crucial in the case of apps dealing with sensitive user data, financial transactions, or identity management. Regular security audits and choosing reputable third-party providers can help in minimizing these risks.

Compatibility and Integration Issues

Third-party apps need to seamlessly integrate with existing systems. Compatibility issues can arise, leading to disruptions in services or degraded performance. Ensuring that the third-party software is compatible with the existing technology stack and testing integrations thoroughly can address these challenges.

Dependence on External Vendors

Relying on third-party apps means depending on external vendors for critical functionalities. This dependence can pose risks in terms of the consistency of service, response times for support, and control over future updates or changes in the software.

When integrating third-party software, compliance with industry standards and legal requirements becomes a complex issue. This is particularly important for applications that handle customer data, financial transactions, or operate in heavily regulated sectors. Businesses must ensure that the third-party software complies with relevant laws and regulations to avoid legal repercussions.

Impact on User Experience

While third-party software can enhance user experience, it can also have the opposite effect if not implemented thoughtfully. Issues such as increased load times, inconsistent user interfaces, or intrusive features can detract from the overall user experience.

Data Privacy Concerns

Incorporating third-party software, especially through APIs or cloud-based services, brings forth significant data privacy concerns. A primary risk arises when sensitive data, systems, or services can be accessed or affected by a third-party provider, such as a vendor or a SaaS provider. These entities often have direct access to critical business data, making robust security measures essential to prevent data breaches​.

Recent statistics presented by resmo highlight the gravity of these risks. A striking 83% of organizations have experienced more than one data breach, with increased prices often passed on to customers as a result​​. The interconnected nature of modern businesses adds another layer of risk, with 19% of breaches occurring due to compromises with business partners​​. In the realm of cloud storage, cloud-based data breaches account for 45% of the total, with the average cost of a data breach reaching a staggering $4.35 million, underscoring the need for robust security investments​​.

Compromised credentials, a significant concern, account for 19% of all incidents, emphasizing the need for better password management and authentication practices​​. Furthermore, the average identification and containment time for a supply chain breach is 26 days longer than other types of breaches, highlighting the complexities in managing third-party risks​​.

Alarmingly, 62% of system intrusion incidents involve adversaries exploiting partners, and almost every organization, 98% to be precise, has at least one vendor that has suffered a breach in the past two years​​​​. A considerable 81% of companies have experienced sensitive data exposure due to SaaS applications​​.

The lack of Multi-Factor Authentication (MFA) in many organizations simplifies the task for potential attackers. On average, a company has 4,468 user accounts without MFA, putting businesses at risk, especially considering the over 40 million distinct permissions across their SaaS applications​​. The security of super admin accounts is also a critical concern, with more than half lacking MFA protection, creating vulnerabilities for data breaches​​.

Given the magnitude of sensitive data exposure in cloud environments, it's crucial for organizations to implement robust security measures, like enabling MFA, conducting thorough permissions management, and securing super admin accounts to protect sensitive data within the SaaS environment​​.

In conclusion, while third-party software can provide significant advantages, it's important for businesses to carefully consider these risks and challenges. Effective risk management strategies, thorough due diligence, and a cautious approach toward integration can help in maximizing the benefits while minimizing potential downsides.

Conclusion

The integration of third-party software in web and mobile applications presents a landscape of significant opportunities and challenges. From enhancing user experience with specialized functionalities like payment gateways and identity management systems to leveraging the cost-effectiveness and scalability of third-party solutions, businesses can achieve substantial growth and efficiency. However, this integration is not without risks. Security vulnerabilities, data privacy concerns, and the challenges of managing third-party relationships require careful consideration and robust risk management strategies.

Despite these challenges, the advantages of third-party software, particularly in terms of functionality, expertise access, and cost savings, often outweigh the risks, especially when managed effectively. As the digital landscape continues to evolve, the strategic integration of third-party software remains a crucial factor for businesses aiming to stay competitive and responsive to market demands. Ultimately, the decision to utilize third-party software should be grounded in a comprehensive understanding of both its potential benefits and inherent risks, ensuring a balanced approach to digital strategy and implementation.

Exploring the Business Facets of Software Development

The business strategy behind software development is as crucial as the technology itself. At Mobile Reality, we provide a deep dive into the various business models, methodologies, and strategies that drive profitable and efficient software creation. Our comprehensive articles are designed to guide you through the complexities of the custom software development business:

These resources are crafted for those looking to refine their approach to building and managing software projects. Whether you’re contemplating the most effective development methodology, weighing the pros and cons of outsourcing, or deciding on the right pricing model, our insights can lead to informed decisions. Contact our team for a personalized consultation on software development business strategies. We’re here to help you navigate the path to success in the digital product landscape.

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Matt Sadowski

CEO of Mobile Reality

CEO of Mobile Reality

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