Published in PaymentsJournal on July 23, 2019

As technological innovation continues to reshape the payments industry, APIs are becoming a prominent feature of the landscape. But as APIs become a facet in the payments industry, so does the need for API standardization and common practices. Such a framework is necessary for innovation and growth to continue at a quick pace.


PaymentsJournal sat down with George Throckmorton, executive director of Afinis Interoperability Standards and managing director of Strategic Initiatives & Network Development, to discuss the need for API standardization and Nacha’s role in making this happen.

Technology + Standardization = Innovation

The transcendence of APIs, or application programming interfaces, into the business areas of organizations is reinventing the way companies interact and how information is shared. From a business perspective, APIs are products that offer new ways to connect with customers, deliver new services, and do so with lower incremental expense. APIs can provide access to financial services where and when customers need them in an interactive manner outside of the traditional bank product environment. In a changing financial services market, APIs are playing a primary role as connectors within banking and payments systems.

Implementing standardized APIs is increasingly important for the financial services industry as organizations strive to provide digital experiences and customer offerings faster and more efficiently. Today, achieving objectives such as improved transaction safety and transparency, increased communications speed and efficiency, and broadening support of payments innovation calls for consensus-led governance, intelligent innovation, and international collaboration.

Therefore, Nacha is working on developing standardized APIs. “Undertaking the effort to develop a standardized APIs ecosystem for the financial services industry is a significant, but necessary undertaking,” explained Throckmorton. “We’re doing that through a membership organization [Afinis] where all voices are heard.”

Afinis Interoperability Standards brings together numerous companies, software developers, and other relevant players to understand the issues around creating standardized APIs and to find solutions that work for everyone involved. Participants include companies ranging from Oracle to Bank of America, so the group can consider not just the technological challenges, but also business and political ones as well.

The whole enterprise is centered on collaboration. “What doesn’t work is to create a standard on your own, and then put it out to the industry for them to adopt,” said Throckmorton. “It’s really about collaboration and bringing the industry together.”

Nacha views API standardization as part and parcel of its wider mission to promote innovation in the payments industry.

“For me, when you think about innovation, it really means one important thing and that’s bringing not only technology, but standardization together,” said Throckmorton. “When you bring those two things together, you can really meet the needs of the industry.”

Building APIs (and other services) that work for corporates

As of May, Afinis has already released five API use cases, which are available at afinis.org.

The APIs are designed for corporate use, not for consumers. Throckmorton noted that the decision to focus on improving the corporate experience was made because there were not many APIs being created for that need, with the majority instead focusing on the consumer experience. “So we see that as an opportunity, and that’s what we’re focused on,” said Throckmorton.

The available APIs include:

Account Validation: helps ensure bank accounts are valid and payments are posted as desired.

Get Bank Contact Information: allows originating financial institutions to quickly find and alert the appropriate contact within a receiving financial institution of potential fraud to prompt further investigation.

Get Transaction Status: allows an Originator of a transaction to check the status of a submitted payment instruction.

B2B Payments Interoperability: allows a company to obtain correct payment information and remittance requirements to pay another company.

Initiate Payment: allows businesses to submit payment instructions and track scheduling without having to access multiple systems.


Throckmorton noted there were two guiding questions that informed the group’s creation of APIs: What are corporates dealing with? How can Afinis Interoperability Standards solve that?

Nacha’s API standardization efforts are a part of the Nacha Corporate Experience, a broad mission to improve the payments space for businesses by improving the pre-payment and post-payment processes.

Back in September, Nacha acquired the Business Payments Directory Association (BPDA), which is a database of business payees and payee information.

Throckmorton said that Afinis and BPDA are working to build a federated directory using blockchain that would dissolve issues around electronic payment routing and remittance, two of the biggest challenges for corporates. The blockchain directory would also streamline the process of onboarding suppliers, which currently can take weeks if done manually.

Afinis plans to have a pilot available by early 2020.

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