SWIFT, a financial messaging services provider that aims to be a leader in global banking standardization, has announced a new API standard for pre-authorization of funds. This new standard, which aims to simplify payment authorization, is the second standard proposed by the company since the beginning of 2019.
The pre-authorization API standard would allow a payer’s bank to earmark funds in advance for future purchases. The company is hoping that this would guarantee that the subsequent payment is honored. In the announcement of the standard, SWIFT had this to say about the value of open banking standards:
"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."
In January of 2019 SWIFT announced a Pay Later API standard, which was designed to “increasing payment choice for consumers.”