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Best Practices

The Payments Process: Before & After Bank APIs

FinLync | December 8, 2022


Most people don’t think about the behind-the-scenes work that goes into processing their payments. But corporate treasurers know just how much work goes into making a payment—and how important it is to have a reliable, efficient payment process. Bank APIs are changing the game for treasurers, making payments faster and easier than ever before. In this post, we’ll take a look at what how bank APIs are changing the payments process for the better. Stay tuned for more posts in our series on how corporate bank APIs improve treasury processes.

Before: Payment Processing Without Bank APIs

Let’s begin with the assumption that you have already gone through the arduous and expensive process of establishing bank connections  via host-to-host or third-party networks like SWIFT.

Understanding that each company has its own payment process idiosyncrasies, there are myriad hurdles encountered from start to finish. The first step in a non-bank API process is to gather all the initiated payments from the various systems. Then ensure the payments are ok to send. But, the right approvers need to be notified depending on the payment details.

Once you’ve determined which payments are ok to pay, you need to determine whether your accounts have sufficient funds, but…you can’t access up-to-the-moment available balances. Most are stuck working from yesterday’s balances.  And in some cases, it’s not just one bank account you’re guessing the balance of, oftentimes there are several payer bank accounts you need to check.

Before you send it, the payment file must be formatted correctly – deciding which of the various country payment types to use – and then be securely encrypted.

The actual sending of the payment isn’t much easier – entering it into a bank portal manually or the many people and steps to send via SWIFT or other bank channels.  It can take ages to make its way through all the different layers to its destination, payments sent through clunky, expensive legacy channels don’t take advantage of today’s faster payment methods like RTP, instant payments or proxy payments. There’s no way to get an up-to-the-moment status on your payment, so you’re left to constantly check for an acknowledgement.

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If you want to onboard a new payment bank, if a bank changes its file formats, or you want to add a new payment type or PSPs, you’ll have to take a number with IT. Worst of all, payment files are highly vulnerable to internal and external fraud.

Once the payment has been sent, there are still more roadblocks: failed or rejected payments are common, unexpected fees could be assessed along the way, and your beneficiary has no way of tracking the payment status.

All these roadblocks are a hassle even for payments that are planned ahead of time. These hurdles become even more challenging when it’s an urgent, one-off payment.

There are countless ways to improve parts of this painful process. But only corporate bank APIs offer a way to improve nearly every milestone in the entire lifecycle of the payment process.

After: Payment Process With Bank APIs

Countless improvements to the payment process can be accomplished simply by advancing to corporate bank APIs. With bank API-powered embedded treasury software, simplifying collecting the initiated payments and adhering to internal controls is easier. All of your payments – AR, AP, GL, payroll, treasury, and one-off payments are combined into a single dashboard across all your systems. Automatic pop-up alerts let the appropriate approver know when a request is pending.

Next, checking balances to ensure there’s sufficient funds becomes an easy 1-click task. With bank APIs, you simply refresh your available balance at any time, as frequently as you wish, and up-to-the-moment bank data will be delivered instantly.  This action isn’t limited to just one bank or one account.  By using a multi-bank API powered treasury software or multi-bank API aggregator, you access this data instantly across all different banks and all different accounts.

As for sending the payments?  Bank APIs support instantaneous tracking and confirmation payments. No more sweating it out when dispatching critical payments like M&A activity or tax payments – or any kind of payments for that matter. Bank API-supported payment traceability works just like a package tracker, you can see exactly where a payment is – from the moment it’s sent to the moment it arrives to the beneficiary.

Get the free eBook: the Essential Guide to Bank APIs

If the payment fails, you’ll be notified immediately. Now that you know exactly when your payments will be delivered, you can eliminate sending them early or worrying that it might arrive late. Bank API enabled treasury tools automatically route your payment through the most optimal path – optimizing for speed and cost among bank APIs, domestic payment networks in over 60 countries and real-time payment networks like SEPA Instant or Singapore’s FAST network.

Bank APIs also allow treasury to:

  • Make use of push notifications, furthering efficiency and slashing time spent waiting for an acknowledgement
  • Opt to share automatic delivery notifications with your beneficiaries
  • View exact payment fees at every step along the payment journey, including cross-border payments
  • Receive automatic notifications, with reasons why, should a payment fail to process


By advancing to bank APIs your payment process will improve. You can reduce the time and effort it takes to make and receive payments while also mitigating the risk of fraud. With full control over when payments are received and a clear view into the fees and exact status of each payment, you’ll be able to spend more time on higher value activities.

Essential Guide to Bank APIs