Posted February 21, 2017
HERNDON, Va, Feb. 21, 2017 – NACHA announced today the completion of its exploratory effort around the value of API standardization for the U.S. financial services industry. In collaboration with Accenture, NACHA led a comprehensive research project, which included an analysis of the U.S. financial services market; examination of the potential roles and responsibilities of industry stakeholders within a standardized API ecosystem; identification of potential use cases; and an evaluation of the opportunities and challenges a standard set of APIs could provide to the industry. The results of the effort show that API standardization can address ACH Network pain points and benefit the entire payments ecosystem – from financial institutions, businesses and consumers to fintechs – through improved security and transparency of transactions, increased efficiencies and speed of communications, and enhanced support of payments innovations.
“APIs are not new to the payments industry,” said George Throckmorton, Managing Director at NACHA. “Many payments providers and leading financial services firms have been using APIs to broaden and enhance services, and increase automation and strengthen security. But what’s lacking is standardization. Standardization opens the door for ubiquity, which will drive adoption and use, and allow the industry to reap the full potential APIs can provide to all stakeholders. Through our various forums for discussion and debate, we plan to continue the evaluation, dialogue and education around API standardization to help support the automation, security and service enhancement goals of the industry.”
APIs are available application programming interfaces that provide developers with programmatic access to a proprietary software application. Within the financial services industry, there are a number of different use cases for which APIs could support the more efficient and secure exchange of data between financial institutions, and between businesses, consumers and their financial institutions.
“Use of APIs can add significant value to the U.S. financial services industry and payments,” said Kevin Kohut, API strategy lead at Accenture Mobility, part of Accenture Digital. “Across the globe, we have seen strong demand for API standardization, as the value and opportunity that strategic API approaches enable is considerable. Given NACHA’s role as administrator of the ACH Network and its ability to facilitate inclusive dialogue and engagement of diverse stakeholders, we feel that NACHA is well positioned to advance the discussion around API standardization and help identify a path forward.”
NACHA’s Payments Innovation Alliance, a membership group that encourages industry dialogue and collaboration to help advance domestic and global payments, is establishing an API Standardization Group to develop an “API Playbook.’” The “Playbook” will serve as a tool to assist financial institutions, businesses, fintechs and other industry stakeholders with the creation of a standardized API ecosystem that can enhance support of the payments and business needs of industry participants.
“An Alliance developed ‘API Playbook’ will go far in helping financial institutions, businesses and technology providers across the payments industry to standardize and adopt APIs,” said Joe Proto, CEO and Chairman of Transactis, and member of The Alliance.
NACHA will share its research findings, and The Alliance will begin initial planning for the new industry group, which will launch officially in March, at the upcoming Alliance members meeting Feb. 22-24 in Los Angeles, Calif. If interested in attending the Members Meeting, learning more about the research findings or the new API Standardization Group, please contact firstname.lastname@example.org.
NACHA will continue API dialogue and discussions at its annual industry conference, PAYMENTS 2017, which takes place April 23-26 in Austin, Texas. Registration for PAYMENTS is now open. Visit https://payments.nacha.org for more information and to register.
For more information about NACHA and its initiatives, please visit www.nacha.org. To register for upcoming NACHA events, visit www.nacha.org/events.