SWIFT announced Wednesday (Jan. 16) that it published a standard for the Pay Later APIs, which it said is a key step in enabling the adoption of a new consumer payment model.
In a press release, SWIFT said Pay Later is an instant online payment facility which allows customers to use traditional bank loan financing to pay for online purchases. When selecting Pay Later at the point of purchase, customers are provided with loans from banks that they can choose. The funds are immediately credited to the merchant and the items are sent out for shipment. SWIFT said that for merchants, offering Pay Later can provide a wider selection of purchase options and reach more customers and at the same time ensure they are getting paid.
According to SWIFT, by publishing the API standard for Pay Later, which is known formally as the Transactional Finance Application Programming Interface, SWIFT said it is driving widespread adoption of the payment model for merchants and banks across the globe. Using this single standard, SWIFT said, merchants can implement Pay Later and avoid multiple costly implementations.
“SWIFT has long been at the forefront of banking standardisation and is continuing this work in the API world,” said Stephen Lindsay, head of standard at SWIFT in the press release. “Our work on Pay Later is a good example of how standardisation plays a vital role in ensuring the industry can take every advantage of technological innovation.” SWIFT noted that the standard for API is part of its role as a trusted standards setter and that the company provides a neutral venue for collaboration, standards, and payments business expertise — as well as a platform for capturing,
publishing and testing specifications that ensure all participants can contribute with confidence.
The working group on the Pay Later API standard includes banks, merchants and technology providers, SWIFT noted in the press release. The aim of the working group is to create conditions for a broad ecosystem of Pay Later to provide more choices for customers and give merchants more ability to hawk goods.
“The launch of Pay Later API will support banks’ transition into the world of digital platforms,” said Tony McLaughlin, managing director, treasury and trade solutions at Citi. “The API will enable banks to maintain the vital lending relationship, whilst driving growth of the global digital economy. Citi believes that the introduction of this interface will provide the basis for future innovations in platform banking.”