B2B Payments

Keeping An Eye On B2B APIs

Keeping An Eye On B2B APIs

When the pandemic arrived in early 2020, a preponderance of B2B payments was still being made by paper checks, along with all the messy precursors to those checks, from Excel spreadsheets to outdated accounts payable (AP) systems to – no disrespect – the U.S. Postal Service.

The May 2020 B2B API Tracker®, done in collaboration with Red Hat, pushes past all the check chatter to talk about application programming interfaces (APIs). Their role is growing exponentially as we inch toward a post-pandemic world that will see an acceleration of open banking and digital-first financial services.

Our increasing dependence on APIs to make banking work – now and into the future – comes down to the resiliency of the tech. When it comes to APIs, it’s important to keep a good eye on them.

“APIs are key to FIs looking to offer innovative products and services, but a lack of monitoring can have a detrimental effect on their performance,” according to the new report. “Monitoring API performance is just as vital as deploying them in the first place. Banks must monitor their APIs’ performances to make sure they are functional, accessible and do not suffer from technical issues like downtime. A lack of API monitoring protocols can result in funds wasted on solutions that do not work as intended or deliver what was promised to users.”

Measure, Test, Repeat

The U.S. doesn’t have a revised Payment Services Directive (PSD2) requiring banks to make transaction and account information available to neobank newcomers, nor has the U.S. gone the U.K. route by requiring that banks allow third-party developers to access open APIs. But businesses here are doing it anyway, which makes for an energetic (if somewhat frantic) vibe.

That’s when mistakes get made, even by APIs, which we think of as error-free – but they’re not.

“APIs are key to seamless B2B transactions, granting all payment processors access to the same

tools to develop their solutions,” the latest Tracker states. “Careful monitoring of APIs’ performance is just as important as their development, as users may abandon API-driven apps that suffer from technical issues like downtime or excessive loading times.”

Companies take API uptime quite seriously. As Robert Pehrson, head of business development at Skandinaviska Enskilda Banken AB (SEB), recently told PYMNTS, “We measure our systems in terms of downtime, errors, processing time and capacity. For payments with larger firms, for [example], we clearly need our performance to be [excellent. We ask ourselves], ‘How big are the files you can send? What response time do we have?’”

Delivering on CX

To oversee and test their APIs, FIs use performance-monitoring data obtained from a variety of third parties, as well as appraisals by government agencies that watch for compliance. “Their top priority is not necessarily the performance quality of the APIs in a vacuum, but instead their ability to integrate with systems of other banks,” the report states.

Which is not to dismiss or minimize the consumer experience (CX) that APIs must enable.

“Processing … transactions without APIs will be a substandard customer experience going forward, as users are then required to enter the same information into multiple payment portals – a needless step that only exists because the portals do not share information,” per the report.

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