With the backdrop of the global COVID-19 pandemic, the need for new and evolving digital payment services has become even more urgent. The global crisis has accelerated the timeline for businesses to eliminate the need for physical checks and manual processes by moving to a streamlined digital process.

Attempting to make this shift on a legacy platform comes with challenges that render quick implementation of digital real-time payments difficult or even impossible. Therefore, cloud-based APIs and open architecture are critically important for companies wanting to get payment platforms and services to market in a timely manner.

To speak more about how traditional financial institutions can leverage cloud-based APIs to enable fintechs and other payments industry participants to accelerate the growth rate of faster digital payments capabilities, PaymentsJournal sat down with Robert Conery, COO and EVP at Avidia Bank, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group.

PaymentsJournalHow Banks Can Work with Fintechs to Meet Evolving Digital Payments NeedsPaymentsJournal How Banks Can Work with Fintechs to Meet Evolving Digital Payments NeedsPaymentsJournaljQuery(document).ready(function ($){var settings_ap34818060 = { design_skin: "skin-wave" ,autoplay: "off",disable_volume:"default" ,loop:"off" ,cue: "on" ,embedded: "off" ,preload_method:"metadata" ,design_animateplaypause:"off" ,skinwave_dynamicwaves:"off" ,skinwave_enableSpectrum:"off" ,skinwave_enableReflect:"on",settings_backup_type:"full",playfrom:"default",soundcloud_apikey:"" ,skinwave_comments_enable:"off",settings_php_handler:window.ajaxurl,skinwave_wave_mode:"canvas",pcm_data_try_to_generate: "on","pcm_notice": "off","notice_no_media": "on",design_color_bg: "111111",design_color_highlight: "ef6b13",skinwave_wave_mode_canvas_waves_number: "3",skinwave_wave_mode_canvas_waves_padding: "1",skinwave_wave_mode_canvas_reflection_size: "0.25",skinwave_comments_playerid:"34818060",php_retriever:"https://www.paymentsjournal.com/wp-content/plugins/dzs-zoomsounds/soundcloudretriever.php" }; try{ dzsap_init(".ap_idx_88042_14",settings_ap34818060); }catch(err){ console.warn("cannot init player", err); } });

Cloud-based APIs Enhance Companies’ Digital Payments Offerings 

The chart below comes from an in-depth Mercator Advisory Group analysis of the evolution of API platforms in the United States and Europe. According to Sloane, this detailed dive revealed that there is “a range of innovation and new businesses being created using APIs revolving around payments.” He adds that APIs present “a huge opportunity for organizations in the U.S. market to start building out new and differentiated payment platforms.”

Visa and Mastercard API

The next visual shows the significant real-time payment (RTP) growth anticipated in upcoming years thanks to the introduction of the Clearinghouse payment rail. “The backdrop behind real-time payments is really an open architecture provider of APIs, which the Clearinghouse provides,” notes Conery.

Real-time payments market assessment

COVID-19 Has Accelerated the Need for Businesses to Digitize

Businesses need to modify their payment structures to make them more streamlined and provide liquidity, creating one of the biggest opportunities for banks and fintechs in the B2B payments space. By streamlining services and providing better liquidity, businesses will be better able to remove the challenges that come with manual processes during and after COVID-19.

Unlike the past, businesses aren’t necessarily turning to banks primarily for payment...