Swift to let banks pre-authorise funds for later purchases

Swift has published a new open banking API standard that “allows a payer’s bank to earmark funds for a purchase in advance, guaranteeing that the future payment will be honoured”.

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The publication of the Pre-Authorization API standard follows the release earlier this year of a Pay Later API standard designed to enable shoppers to select ‘Pay Later’ at the point of purchase and then be provided with a range of loan options 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,” Swift explained at the time.

“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.”

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