SWIFT has published a new Application Programming Interface (API) standard for the pre-authorisation of funds. This allows a payer’s bank to earmark funds for a purchase in advance, guaranteeing that the future payment will be honoured. It is the second of SWIFT’s Open Banking extensions API standards, following the Pay Later API standard in January. API standards help speed the rollout of new services, while reducing incremental investment. If each bank offers a distinct API, merchants and FinTechs have to adapt to different data structures, workflows and security considerations for each one – adding complexity, cost and time for implementation. Stephen Lindsay, head of standards at SWIFT, said: “SWIFT is uniquely positioned to tackle the problem of fragmentation in standards globally and we are pleased to expand our current role to include the global standardisation of open banking APIs.” Tony McLaughlin, managing director for treasury and trade Solutions at Citi, said that the API is further validation that banks, FinTechs and merchants can collaborate to go beyond the regulatory minimums and support important use-cases. “The global banking community must come together to provide the full suite of retail and wholesale banking APIs so that we can provide the financial layer of the digital economy – the world of platforms provides unlimited new opportunities for banks if they adopt an ‘API first’ mindset.”
SWIFT has published the second of its open-banking focused application programme interface (API) standards. The API concerns the pre-authorisation of funds and allows a payer's financial institution to guarantee payments will be honoured by identifying funds for a particular purchase in advance of the transaction. Industry participants have noted how banks, fintechs and merchants need to collaborate in the publication of API standards. In this case, the API, which is open source, was developed with the help of industry partners including SWIFT, MasterCard and PayPal.