There are many types of transactions in the world of payments, including those made between individuals and companies and conversely, between companies, between governments, and between private individuals. The payment process occurs between the payer and the payee, each of whom can be a person, business, institution or software agent. Each phase of a payment can be described, standardized and included in an API. When using payment processes available in applications such as Facebook and Instagram, API’s aid in offering these services.
APIs used by Facebook and Instagram are an example of open banking, and are typically delivered by banks and consumed by FinTech organizations, through secure and tightly controlled interactions. They are used to build apps for end users for purposes such as account aggregation or personal financial management. Access to these APIs must be managed, including using open API standards when these are defined or mandated.
Banks are beginning to open up APIs for third parties, such as Facebook and Instagram. These typically begin with branch information and ATM locations, but are now expanding to account opening, access to account information, and payments. A key driver is the PSD2 legislation in the European Union, as well as associated national Open Banking initiatives, for example in the U.K., Poland, Germany, the Nordics and elsewhere. Additionally, mandating the use of ISO 20022 together with the need for real-time payments are also important global business drivers. We see this more often in North America and Canada.
The “new normality” in payments implies that your peers, or other industry players, can tap into your APIs and build their own solutions to add value to the end-user. Superior platforms find the optimal balance between delivering services to clients directly, delivering via partnerships, and enabling third parties to bring about changes over a platform through APIs.
API’s are very valuable to Facebook and Instagram payments platforms because they provide efficiency to the overall product development and to the end user, the consumer. First and foremost, APIs enable Facebook and Instagram to significantly decrease costs and time, which is crucial given the “always on” world we live in.
Customers demand faster, lower-cost and more agile payment services. API-exposed products are easily customizable since they separate the frontend and backend. Within the latter, it is often possible to allocate multiple services, which enables enormous flexibility for platforms like Facebook and Instagram.
Open banking and real time payments in applications such as Facebook and Instagram brings a number of key requirements for full life cycle API management.
SEEBURGER Business Integration Suite includes support for:
- Access control, which is vital due to the sensitivity of bank customer data. OAuth 2.0 is typically used to manage access to account information.
- API protection to ensure that APIs are not vulnerable to attacks such as denial of service, as well as protection from malicious bots
- A customizable API developer portal to ease onboarding of FinTech partners, and others
- Industry accelerators, particularly prebuilt API definitions to help banks satisfy the requirements of PSD2 or other directives
- API management as part of Payments processes, including management of ISO 20022 initiatives
SEEBURGER also provides thought leadership and advice for API programs including support for workshops, which are often used by banks and other financial institutions to drive API usage and engage FinTech companies
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Written by: Ulf PerssonAs SVP, Global Analyst Relations and Business Development, Ulf is responsible for global analyst relations and strategic business development, including strategic sales and marketing strategies, technology and market initiatives, and leadership related to SEEBURGER Integration (technology, platform, solutions, cloud integration services, etc.). Ulf works across multiple industry verticals such as Financial Services, Automotive, Logistics, Utilities, Retail, CPG and Manufacturing. Ulf has more than 30 years of global business and technology experience working with product and solution delivery of integration technologies (EAI, EDI, B2B, MFT, API, etc.), Analytics and Big Data, Mobile, Cloud Services, Digital Transformation and various industry initiatives. Before joining SEEBURGER in October 2016, Ulf worked in various global leadership roles with international business integration technology and cloud services providers.