Swift has published a new API standard for the pre-authorisation of funds, paving the way for open banking.
The new standard allows a payer’s bank to earmark funds for a purchase in advance, guaranteeing that the future payment will be honoured. It is the second of Swift’s Open Banking Extensions API standards, and is the latest addition to a global library of APIs that Swift is building in collaboration with banks, merchants and fintechs.
Swift published a Pay Later API standard earlier this year.
API standards play an important role in open banking because they help speed the rollout of new services while reducing incremental investment. If each bank offers a distinct API, merchants and fintechs have to adapt to different data structures, workflows and security considerations for each one – adding complexity, cost and time for implementation. SWIFT has long been at the forefront of banking standardisation and is well suited to lend its expertise and experience to this work in APIs.
The new Pre-authorisation standard is now available for developers of APIs to adopt and use.
Stephen Lindsay, head of standards at SWIFT, says: “Swift is uniquely positioned to tackle the problem of fragmentation in standards globally and we are pleased to expand our current role to include the global standardisation of open banking APIs. Our work on the pre-authorisation of funds API is another example of the central part we are playing in ensuring the industry can make the most of the new open banking landscape.”