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APIs will transform payments

Application Programming Interfaces, commonly known as APIs, are changing payments in the same way Google Maps has changed location, writes BankservAfrica chief business officer MARTIN GRUNEWALD



Cashless, instant payments, Internet Technology and good customer experiences are some of the megatrends dominating the industry’s agenda over the past years and the driving force behind the transformations sweeping through financial services and payments industries in South Africa and globally.  

As the hyperconnected digital economy draws closer, newer and more agile technologies are being deployed in line with the fast-changing role of traditional financial services. This evolution towards the platform economy will bring extraordinary changes to legacy systems and drive greater interconnection while keeping personalised and excellent customer service at the very centre. 

As South Africa’s trusted payments provider, our model will also transition to this future state. One way is through newer technologies and agile delivery systems that will be leveraged to create interoperable capabilities to keep up with the customer demands while improving efficiencies and lowering operating costs. 

This is where technologies such as Application Programming Interfaces (APIs) – related to the megatrend of the Internet Technology and IoT- come in.

APIs? Think Google Maps 

The Centre of Financial Inclusion defines Application Programming Interfaces (APIs) as a ‘set of defined methods and functions that allows one computer programme to ‘talk’ to another programme to consume data, perform actions or both’. APIs are also responsible for reducing the complexity of accessing technology systems and automating interactions between systems and apps. Many times the end-user, like the consumer, is unaware of these.

An everyday example is the Google Maps APIs. A quick search for the nearest restaurants, pizza places, parks or landmarks within your geographical location shows up in almost an instant. 

In financial services and payments, APIs have a similar function of bringing the ‘surprise and delight’ factor through quiet, integrated workings in the background. How does this show? As Standard Bank’s ‘The Power of the Platform Economy for Financial Services’ report puts, ‘using APIs, banks can move beyond payment services to integrate payments with cash management, liquidity management, treasury and trade finance services’. The true sense of a ‘one-stop-shop’ materialises. 

In the South African context, APIs can assist in creating more inclusive financial services. By providing easier access to services in one time and in one spot, clients are in a good position to access financial services products for their needs – be it for applying for a loan or getting their credit score. 

APIs will take the ordinary out of payments  

In payments specifically, APIs are an important feature for our modernisation work with the industry.

But there’s more. By mirroring the needs of our customers and the market for efficient and faster service levels – while preparing for our future state – APIs are also being integrated into our existing suite of payments offerings. These will help to replace the manual processes with an automated solution for solving interbank queries. Our other developments include APIs for a real-time view of transactional status queries. Innovations like these will elevate the current payment service query levels to faster responses with accuracy, thereby saving time and energy. 

These API innovations are just the beginning – there’s more on the horizon that we want to explore, such as APIs to address the persisting challenge of fraud in electronic payments. 

Our API journey is an important one; it is fundamental to modernising our legacy payments system.