These days, most of what businesses and individuals do on the web involves interacting with APIs, or application programming interfaces, which are an essential pillar of many of the online services we have come to rely on.

In the payments and financial services industry, the interoperability of banking technology is just as important to stakeholders as checking out Beyoncé’s new Instagram post is to music fans. And the standardization of these more nuanced APIs is the key to interoperability.

To further discuss the future of APIs and how they have benefited the financial services industry, PaymentsJournal sat down with George Throckmorton, Managing Director of Advanced Payments Solutions at Nacha and Executive Director of Afinis, and Tim Sloane, Vice President  of Payments Innovation at Mercator Advisory Group.

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Afinis 101

At their core, APIs help businesses interact with payments and the data around those payments. It’s promising to see this technology implemented as a creative solution to many of the industry’s problems. However, initially much wasn’t being done in terms of standardization, which created challenges for businesses seeking interoperability.

So how did Afinis Interoperability Standards come to be? In essence, industry stakeholders determined that the APIs they used to interact with organizations all had subtle differences and that was becoming a challenge. “There was some consensus in the industry that standardization would be of value. We have seen standardization occur elsewhere around the globe, but it was mainly driven by mandate. We needed another approach in the U.S.,” Throckmorton said.

“Nacha, working with the industry, set up an organization called Afinis. Today, we have about 60 member organizations that are very diverse and of all sizes, including financial institutions, fintechs and service providers,” he said.

“By collaborating through both technical and business groups, Afinis is working to actually develop API standards for the U.S.—and maybe even on a global scale,” Throckmorton said.

“Combining both technical users who understand the data and business users who really  understand API use cases is very important. If we are going to bring the industry together and create these standards, we all have to talk the same language.”