10 Financial-grade APIs
This chapter covers
- Open banking for the financial services industry
- Delivering highly secure APIs with FAPI
- Securing the authorization process
- Adding nonrepudiation capabilities to APIs
In recent years, we have witnessed a revolution in the financial technology (fintech) space. We have seen the emergence of organizations such as Plaid, Bud, TrueLayer, Yapily, Yodlee, Stripe, and GoCardless that provide financial market infrastructure—a critical component of today’s economy that allows businesses to manage financial transactions easily via APIs. We have seen the emergence of neobanks or challenger banks, which operate exclusively online. We have seen businesses provide banklike services without having a banking license.
All this is possible thanks to financial APIs. Organizations that otherwise wouldn’t be able to process online payments due to strict regulatory requirements can do so by using payment processors like Stripe and GoCardless. Payment processors build a secure financial infrastructure that connects directly with banks to manage payments and other financial transactions (refunds, chargebacks, and so on). The processor exposes an API that is used to set up a payment, and it processes the operation through its direct integrations with banks.