API

B2B Commerce Makes Moves With APIs

B2B Commerce Makes Moves With APIs

B2B commerce was headed in a digital direction – albeit slowly – before anyone ever heard of COVID-19, with 13 percent of U.S. B2B transactions expected to happen online by 2021 pre-pandemic. That’s all going to change now as B2B commerce adapts to the new realities.

Platforms and eCommerce are central to the next normal, demonstrating unique new value early in the pandemic as a form of commercial “social distancing” long before that term surfaced. Much of the same can be said of B2B eCommerce in recent months. The performance and uptime of the payments infrastructure during record peak demand has been nothing short of impressive, and B2B APIs are an increasingly vital part of that technological backbone.

The PYMNTS April 2020 B2B API Tracker®, powered by Red Hat, lays out the specifics of how APIs – and the platforms using them – are streamlining payments and automating aspects of the flow.

B2B APIs Are Humming

As financial institutions (FIs) and payment service providers map out the next phase of digital payments, the adaptability and connectivity enabled by APIs – particularly as open banking becomes more common – are enabling next-gen capabilities that will soon be table stakes.

“Data and payment APIs are flexible tools that allow banks to branch out from only offering services in physical branches,” the report states. “They extend capabilities that can power clients’ digital transformations, including easy payment integrations into eCommerce platforms and data flows that support international trade. FIs can stay relevant and keep business clients loyal by offering the right APIs to fuel the latter’s domestic and global eCommerce goals.”

Seizing the potential, Amazon’s B2B unit, Amazon Business, was on track “…to serve 10 percent of the U.S. B2B market and 5 percent of the global B2B market by 2021,” the report states. Like all COVID-era estimates, that is expected to change. The extent of Amazon B2B’s impact could potentially be far greater within significantly reduced timelines. As a result, the Amazon Marketplace Web Service (Amazon MWS) developer portal is humming with B2B API activity.

The eCommerce giant is hardly alone, as the possibilities created by B2B APIs gain awareness.

SMBs, APIs and Open Banking

Open banking, and the APIs that power it, are finding purchase among SMBs as well.

“Small to mid-sized businesses (SMBs) are showing an increased interest in open banking-enabled holistic mobile banking solutions, with 61 percent using them in 2019 – up from 53 percent in 2018,” the report states. “Many FIs believe SMBs will also be drawn to banking apps that leverage API integrations and allow business owners to oversee their various financial and operational activities in one dashboard.” How much creativity and ingenuity merchants and FIs employ in developing custom APIs for various uses remains to be seen, but it looks promising.

“We didn’t start off by thinking we needed APIs,” said Abdul Raof Latiff, head of the digital institutional banking group at DBS Bank. “We realized a few years ago that all our clients had plans to transform their businesses and become more digital and competitive. For us, the question was, how could we get involved? That’s when we realized that, for the types of things they wanted to do, we needed to build a whole set of APIs that allowed communication and settlements to be less painful and more seamless for the customers to implement. That’s how we came to APIs.”

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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