Swift introduces a new interface for instant loans, the Pay Later API. It should make it massively easier for banks to integrate consumer credit into online checkout processes. Pay Later (the official name is “Transactional Finance” API) is a real-time online payment option that enables customers to pay for purchased goods online through traditional bank loan financing.
Instant loans with instant credit to merchant instead of only payment guarantee
With the new API, customers could select the “pay later” option at the time of purchase and then see available instant loans from their banks. Customers can then select and take out a loan.
The funds of the instant loans are credited to the merchants in real time and the ordered items are sent immediately to the customer. By offering the pay later option, traders are able to offer a greater variety of call options and reach a broader clientele while ensuring payment security.
With the release of the API Standard for Pay Later, officially known as the Transactional Finance Application Programming Interface, Swift aims to facilitate widespread adoption of this new payment model by merchants and banks. The standard allows merchants to implement the Pay Later option to ensure that they can reach a variety of banks around the world with a single interface, without having to implement costly multiple interfaces.
Swift has long been a leading standard-setter in banking and continues to work in API banking. This group intends to further develop the specifications of the API standard for instant loans and the regulatory framework. Their Goal is to create a broad ecosystem around the Pay Later platform. Using ISO 20022 definitions also ensures that the data provided in the APIs is compatible with real-time settlement and clearing data. This simplifies data integration for both banks and merchants.
“The introduction of the Pay Later API supports the transition of banks to the world of digital platforms. The application programming interface allows banks to maintain their important credit relationships, ” said Tony McLaughlin.
Also published on Medium.