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SWIFT publishes new ‘Pay Later’ API standard

The digitisation of commerce can really open up new markets and opportunities. SWIFT’s launch of a new standard for ‘Pay Later’ APIs, published today, is a key step toward enabling the rapid introduction of an innovative new consumer payment model.

Pay Later online facility

‘Pay Later’ is an instant online payment facility which offers customers the ability to use traditional bank loan financing to pay for goods purchased online. By selecting Pay Later at the point of purchase, customers are provided with available loans from their banks; they can then select and initiate a loan, knowing that the funds can immediately be credited to the merchants and items dispatched. By offering the Pay Later option, merchants are in turn able to offer a wider variety of purchase options and to reach a wider consumer audience, whilst still ensuring surety of payment.


Banks and service providers are enthusiastic about the new opportunities that the new API standard opens up:

  • Tony McLaughlin, Managing Director, Treasury and Trade Solutions at Citi said: “The launch of Pay Later API will support banks’ transition into the world of digital platforms. The API will enable banks to maintain the vital lending relationship, whilst driving the growth of the global digital economy. Citi believes that the introduction of this interface will provide the basis for future innovations in platform banking.”
  • Anne Carøe Hald, Global Head of Payments Products at Danske Bank said: “Pay Later is an opportunity for banks to serve their customers better; to offer appropriate finance where and when customers need it. The ability to provide services in this way - seamlessly integrated into customers’ online lives - will be key for banks to thrive in the digital economy.”
  • Christer Holloman, CEO at Divido, the retail finance platform provider, said: “New digital ecosystems are emerging that create magical customer experiences for millions. Financial services will be part of that transformation and become invisible enablers of the customer journey. Banks need to embrace fintech partnerships and standardised APIs for retail and wholesale banking to secure their role in the digital economy.”

While Swift believe that by publishing an API standard for ‘Pay Later’, which is formally called the Transactional Finance Application Programming Interface, SWIFT believe they are facilitating the widespread adoption of this new payment model by both merchants and banks around the world. Using this single standard, merchants will be able to implement the Pay Later option ensuring they are able to reach multiple banks around the world and avoid multiple costly implementations.

API development

In fulfilling its established role as a trusted standards setter, SWIFT provides a neutral venue for collaboration, standards and payments business expertise – as well as a platform for capturing, publishing and testing specifications that ensure all participants can contribute with confidence.

The working group on the Pay Later API standard includes banks, merchants and technology providers. This group will continue to work together to evolve the standard API specifications and rulebook. The aim is to create the conditions for a broad ecosystem of the Pay Later platform to provide optionality to customers, to give merchants a greater ability to sell their goods and to ensure a wide reach for banks. By re-using business definitions from the established ISO 20022 messaging standard that it manages, SWIFT ensures that data specified in APIs are compatible with the messages used to clear and settle instant payments, simplifying data integration for both banks and merchants

SWIFT welcomes contributions from industry participants to continue evolving the Pay Later standard. With the publication for version one of the specification, multiple participants, including merchants, marketplaces, fintechs and banks will be able to begin working on live pilots. The parties foresee an ongoing collaboration between industry participants to develop value-added API standards to drive the growth of the digital economy.

CTMfile take: This is yet another example of how merchants and corporates can use the new API technology and standards to develop new income streams.

This item appears in the following sections:
Financing Short-Medium Term Deficits
Payments - Collecting at POS

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