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Why a Robust Open API Offering is a “Must” When Choosing a Fintech Partner

Transcard
April 30, 2020

CFO’s are understanding more and more the importance of implementing digital payments.

Choosing a fintech that offers an Omni-Channel Pay-in / Pay-out Platform with added workflows is a promising start. A fintech with these capabilities, once implemented, will offer companies the functionality of “turning on” the ability to make and receive all forms of payments they deem useful from any payment option currently available. The added workflows attach data, docs, messaging, or any other relevant information to the payment for easy, and often immediate and automatic, reconciliation.

Employees can receive payments in the way that makes the most sense to them and the business has the opportunity to make payments to and receive payments from suppliers based on the way that makes the most sense as well… Supplier A can be paid via ACH and Supplier B can be paid via card and everything can be managed from one platform.

 

Businesses Are Choosing Digital Payments

Digital payments improve efficiency, increase savings, boost payee satisfaction, offer detailed reporting in real time… The list goes on and on. So it’s no surprise that more and more businesses and organizations are trending towards digital payment options not just for payroll, but for travel cards, accounts payable and accounts receivable options, to pay 1099 employees better, and for countless other use cases to improve controls and bolster annual revenue.

Open API’s are an integral part of the global digital payments revolution and are expected to transform every area of business. According to Aite’s Report, Emerging Trends in the API Economy, the arrival of the API economy — the commercial exchange of business function and capabilities using API’s — has greatly facilitated collaboration between banks, fintech companies, and organizations.

API’s enable banks and other organizations the ability to share data and access third-party applications using common standards. Fintech companies have developed API platforms to support banks and organizations alike in their digital transformation by offering what is becoming the de facto channel for financial connectivity.

 

Why Open API’s Matter Right Now

Regulators around the world are mandating consumer access and control over their own data. The United States doesn’t have such regulations yet, but the move towards Open API’s continues to trend upward because it allows access to customer data without “screen scraping,” and gives customers control over their own information. Open API’s also offer businesses the opportunity to offload regulatory and compliance burdens while delivering superior customer experiences and extending client reach.

Open API’s enable businesses to more flexibly distribute its payments through third-party channels provided by fintech partners, facilitating innovation and reducing time to market. This makes the API technology a strong consideration when choosing a fintech partner. Open API usage is quickly transitioning into the next wave of digitization in payments, reconfiguring age-old value chains and changing business models.

The benefits of opening new channels via APIs are evident and are spurring organizations to develop and utilize an open-banking platform. By consolidating data internally and carrying out analytics on transactions, banks and organizations can get a more up-to-date picture of user activity. Connectivity is a strategic foundation to agility and cost reduction, and anything that makes transaction processing more efficient, reduces costs, and increases margins attracts the attention of organizations and of a bank’s relationship managers.

Studies continue to show that most organizations agree that they would be willing to use banks besides their current one in order to begin implementing digital payments. They also said that if they’re going to switch banks for one purpose then they would switch entirely and for good.

 

Choosing a Fintech Partner

For these reasons and more, it’s tremendously important to choose not just a fintech that offers an omni-channel pay-in/pay-out platform, but also keeps a robust Open API offering at the forefront of its business structure whether you’re a bank or any other type of organization.

Most organizations can’t predict what platforms their company will partner with over the course of the next ten years, but they do know that there will be additional partners with additional ERP’s and TMR’s to consider. It’d be foolish not to do the leg-work now instead of continually scramble while competitors spend their time taking your business.

If you’re ready to learn about Transcard’s Open API offering, checkout our Open API website and play in our sandbox. And then e-mail sales@transcard.com to arrange a no-obligation consultation with one of our payments or technology experts.

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