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How APIs Are Helping FIs Meet SMBs’ Payment Needs

Corporates no longer tolerate “swivel chair” solutions that force them to switch back and forth between different software solutions and different bank websites just to manage their cash position. Imran Haider, executive vice president of open APIs for Wells Fargo, tells PYMNTS there’s a simple fix. In the latest B2B API Tracker, Haider discusses how application programming interfaces (APIs) are giving financial institutions (FIs) the tools they need to give corporates a single line of sight into the lifeblood of their business.

Businesses tap myriad digital solutions and contract with numerous companies to keep their operations’ finances running smoothly. This complicated process can involve everything from accounting and invoicing software to bank accounts.

Today’s financial institutions (FIs) no longer need to worry about solely addressing all their clients’ financial-related needs, however. They may instead win greater loyalty by helping businesses seamlessly use the various financial tools they want to employ. Being able to handle accounts receivable (AR) and payable (AP) processes with minimal hassle or manual labor is bound to be high on business owners’ wish lists, after all, and integration-savvy banks can accommodate just that.

“The bank is potentially just the payment portion of the broader customer experience,” Imran Haider, executive vice president of open APIs for Wells Fargo, noted in a recent interview with PYMNTS. “It’s not a destination.”

Wells Fargo launched its open API (application programming interface) channel three years ago. Such offerings require FIs to ensure their payment services work seamlessly with clients’ other operational solutions, and APIs shine by providing integrations that connect products and prevent headaches. For this month’s feature story, Haider explained how a robust API strategy can help banks support smoother, speedier and more convenient payment and cash management experiences for their business clients.

Leveraging APIs For a More Convenient Workflow

Business clients’ AP experiences often include checking their account balances to decide how much they can spend, placing orders with vendors, receiving invoices, issuing payments and reviewing their bank accounts to reconcile transaction details. Managing these steps in separate systems can be friction-filled, Haider said. Businesses must sometimes manually enter data from one system into another, too — keying invoice details into bank accounts when sending payments, for example — which can be cumbersome and error-prone.

Business owners may be frustrated by having to log in to several systems to view different processes’ statuses, Haider added, but APIs can eliminate barriers between features and functions. Wells Fargo’s API integrations embed capabilities into business accounting software and other services its customers are already using, meaning users no longer need to bounce between the bank’s website and other platforms.

“The idea for us is to follow our customers and bring the bank to [them],” Haider said. “[Clients] are increasingly operating in digital environments: ERP systems, accounting platforms, consumer sites, shopping sites, social media [and more] … With APIs, we can take our functions, features and products and embed them into experiences that are contextual for our customers.”

This integration-focused approach gives clients more flexibility in determining where and how they tap into services, allowing them to more precisely design their workflows.

“APIs offer up … the ability to take the API service and integrate it wherever’s most convenient for them,” Haider said.

Turning Up the Speed With APIs 

APIs that improve cash management are in strong demand among Wells Fargo’s business clients. Companies need to precisely understand their resources and quickly disburse their funds. APIs support this by empowering real-time account viewing and faster payment services access.

Wells Fargo recently released an API supporting payment initiation over The Clearing House’s Real-Time Payments (RTP) rail, a solution Haider said is important in enabling “me-to-me” transactions in which clients move money between their accounts at different FIs. Being able to transfer that money in real time helps clients control their cash flows.

Businesses also crave immediacy when paying vendors. Real-time speeds mean payers can precisely time when funds will leave their accounts, precision that can be critical to cash management. APIs will likely play a critical role in supporting the business and financial sectors’ push toward faster cross-border payments, as well, Haider explained.

“When you think about payments, generally the need in the marketplace really is faster payments,” he said. “When you think about faster payments, you absolutely need APIs. APIs are the mechanism for real-time interactions between different parties.”

Modern commerce is fast-paced, and APIs enable Wells Fargo to offer the payment speeds and smooth financial data access their corporate clients need to compete. More integration-based capabilities are yet to come, Haider noted, especially as FIs and their developer partners explore new ways to leverage APIs.

“As the market evolves, as more companies [and] more banks see opportunities in the space, we’ll have new and emerging use cases — new experiences that folks haven’t thought about yet — that drive convenience and value for customers,” he said. “APIs are inherently very flexible.”

That flexibility means APIs enable FIs to solve their clients’ current business issues as well as those that may appear in the future as needs and pressures change. The most successful FIs will be those that make clients’ day-to-day operations as convenient and efficient as possible. APIs are showing themselves to be key to unlocking such smooth experiences and appear well-positioned to make impacts for years to come.

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Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

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