An open banking API is an indispensable technology if you want:

• Access to deeper, real-time data on bank transactions
• Payment services that are smoother for your end users and more affordable for you

APIs are the cornerstone of open banking, the initiative that enables authorised financial institutions to access consumer banking information and initiate payments. They’re the technology that lets financial services companies share transaction and customer data seamlessly, securely, and in real time.

In this post:

• How do open banking APIs work?
• What to look for in an open banking API
• Why use Yapily as an open banking API
• How Juni uses Yapily’s open banking API

Want to chat with an open banking expert? Get in touch with us

How do open banking APIs work?

An application programming interface (API) is a tool that allows a software or computer system to share data with another application. Across this interface, data is requested and provided in a way that’s intelligible, standardised, and secure.

It’s a useful tool because it allows an application to share only specific packets of data. This way, the rest of an organisation’s data can stay secure, while other applications can access the specific information they need. By contrast, card networks process payments using details like card numbers and expiration dates—though these are protected through encryption and other security measures.

Find out more about in our guide to open banking payments

In open banking, APIs are used to make financial data more accessible and to initiate payments. Under open banking regulations in the UK, every bank is required to provide an API that can be used by authorised third-party providers (TPPs). These APIs allow fintechs, financial institutions, lenders, credit agencies, and others to request consumer data—provided they are authorised and have the consumer’s explicit permission.

A solution like Yapily aggregates these individual bank APIs into a single integration. This not only simplifies access to financial data but also enables businesses to offer payment functionality. With Yapily, you can combine account information service provider (AISP) capabilities for accessing data with payment initiation service provider (PISP) capabilities for initiating account-to-account payments—all through one API.

It’s important to note that open banking solutions differ in key aspects, including the number of banks they connect to, the scope of account data they can retrieve, the types of payments they support, and their overall performance as APIs.

In the next section, we’ll explore these differences to help you choose the right platform for your needs.

What to look for in an open banking API

Whether you’re intending to use open banking for payments, data, or both, the API you choose has a critical impact on the kinds of products you can offer—and where. So, before you choose to work with an open banking solution, consider these five factors:

1. Coverage.

One of the most important considerations is coverage. This refers to the number of banks and financial institutions that an API connects with in specific regions of the world. As such, it has a fundamental impact on the viability of your products in particular geographies.

Think back to the fintech above. If its app was designed to aggregate consumers’ different bank accounts, but it was missing connections with many key banks, people would simply not be likely to use it.

So, choose an API that has high coverage in the markets you want to enter. A percentage higher than 85% is usually enough, but the higher the better.

2. Account connections.

API specifications may say that it has 99% coverage in a particular region. However, that’s of limited use if they can only connect with certain kinds of banking services, such as consumer or wealth accounts. If you want to serve customers using business bank accounts, for instance, this won’t be enough.

Of course, the kinds of account connections you need will depend on the kinds of customers you serve and use cases you want to solve for. But if your API *can’t *connect with a particular account, it will limit the kinds of products you can offer in future.

3. The depth of banking data or range of payment features.

Related to the previous point is the variety of features that the API supports, in terms of payments and data.

For instance, in the case of payments, different API platforms support different features, such as variable recurring payments (sweeping and commercial) or bulk payments. Or, if you’re looking for data services, you’ll likely be interested in the quality of data enrichment, including how many fields a platform enriches your data with.

Again, the specific features you want will depend on your offering. For example, lenders might only need open banking for affordability assessments or to streamline loan repayments.

On the other hand, a PSP working with subscription-based businesses could soon benefit from emerging solutions like commercial VRP, which has the potential to automate regular payments without manual effort.

By tailoring open banking options to suit each client’s unique needs, you can help them avoid unnecessary costs and complexities while preparing for future innovations like cVRP.

4. Robustness of the technology.

If you’re a payment services provider (PSP), for example, you may be interested in the appropriateness of your platform for enterprises, or the overall strength of their service.

Some APIs can suffer from high rates of downtime. Others have been known to fail at moments when large numbers of requests are being made. However, if you’re a large PSP or financial institution, it’s really important that the API can support your volume of requests—otherwise the customer experience will suffer too.

5. The user experience.

A final important factor to consider is how the API’s service appears to the end user of the application, as this can affect how likely they are to actually use it. For instance, will the API’s brand logo appear to the user? Or does the API offer a white label service, so that it looks like a native part of your product?

Some APIs only offer hosted pages, which are web pages hosted by the API provider where users complete the payment. These pages display the provider’s branding, rather than your own. This setup can disrupt your customer’s experience with your brand and may even reduce their level of trust.

Prefer to talk to an expert about your open banking needs? Get in touch with us.

Why use Yapily as an open banking platform

At Yapily, we’re an open banking infrastructure platform. We provide both AISP and PISP services, so you can use our API whether you’re looking for data, payments, or both. Plus, we offer all the technical support you need to leverage the benefits of open banking.

In the rest of this post, we want to share three key reasons why you should consider using Yapily as your open banking API.

1. Access a wide range of payment and data services across the UK and Europe

Without adequate coverage in the markets you enter, you won’t be able to offer your products to all possible users. That’s why coverage is one of the most important factors that affects the quality and usefulness of an open banking API.

At Yapily, our focus is on Europe. We’re active in 19 countries across the continent with nearly 2000 connections, including key markets such as the Netherlands, Germany, France, and the UK.

As we mentioned above, though, the kinds of accounts your API connects with is just as important as the coverage it offers. Yapily’s API stands out for its connections with consumer, wealth, business, and corporate accounts.

We also support a wide range of payment and data features, as we’re both an AISP and a PISP. In terms of payment, we offer bulk payments, sweeping VRP and commercial VRP.

In terms of data, we offer deep real-time data, including data enrichment, transaction categorisation, and more. In fact, many enterprises rely on Yapily for KYC checks, customer validation, and consumer budgeting tools.

So, whether you want data services, payments, or both, we can help. With our licence, you have authorisation to use both PISP and AISP services.

For example, Kolleno, the accounts receivable management software, started using Yapily’s open banking API for our extensive coverage and AIS services.

The platform helps SMEs with reconciliation and provides a place where they can access data into their financial performance, by unifying financial information from their accounting systems, CRMs, and more. Yapily enables Kolleno to add data from open banking too, to get a fuller picture of their finances.

More recently, Kolleno has also started using our PISP services, to automate their payment processes. Now, 45% of Kolleno’s transactions use open banking and, as a result, they’ve seen a 20% reduction in payment delays.

“Support & extensive coverage is key for choosing an open banking vendor as we needed a supportive technical team and an intuitive API to meet our growing needs. We chose Yapily due to its extensive coverage across Europe with thousands of bank institutions.”

Ron Dananberg CTO & co-founder

Read the full case study here: How Kolleno + Yapily are redefining reconciliation and confidence in payments

2. Avoid downtime and scale confidently with our enterprise-ready API

While some APIs can’t handle the volume of large clients, we built ours to also cater for enterprises. We recognise the specific needs of enterprises and can support you through onboarding and compliance, so you can scale easily.

For instance, we’ll help you get set up in the markets you want to enter and assist you with authenticating your API requests when you’re starting out. Throughout our relationship, we provide enterprise-specific strategic account management to ensure you receive the attention and resources you need.

At Yapily, we put in a lot of work to rigorously test our API, so that you can be sure it can reliably support your growth. We designed our infrastructure so that it’s able to manage large transaction volumes with minimal downtime, thanks to our advanced load-balancing mechanisms.

A final factor that makes us ideal for enterprises is that we’re focused on being an infrastructure provider. Other open banking brands offer their APIs to PSPs, as well as fintech companies and merchants. This can often create a conflict of interest, as it means that the APIs are often targeting the same market as their customers. We don’t do this. Instead, by sticking to infrastructure, we ensure we don’t compete with our customers.

3. Give your users the best experience possible with our flexible hosted and white-label solutions

Many open banking platforms only offer hosted pages. This means that when your end user makes an open banking payment, or uses a customer validation service, they’ll need to complete the user experience following the API company’s own branding. This can be a disorientating experience for customers, as they may not recognise the platform’s logo and this may cause them to abandon the process entirely.

At Yapily, we offer white-label open banking infrastructure. This means that you can create a user flow entirely around your branding. You’ll have full control over how your product appears and what customers experience.

That said, hosted solutions can be a good fit for some PSPs and fintechs. If you want to get to market quickly, for instance, Yapily’s hosted pages can be a more appropriate option for you. In these cases, we can provide the hosted pages, so that you don’t need to worry about building your own user flow from scratch.

With these flexible options, we ensure our infrastructure is highly customisable, to better help you provide the experience your specific customers will want.

How Juni uses Yapily’s open banking API

Juni is a financial management platform for ecommerce businesses. It solves a common problem for ecommerce businesses—namely, that they’re having to manage large amounts of transaction data from many different accounts, and often manually. This can be extremely time consuming and has a high risk of error.

Thanks to Yapily’s open banking API, Juni’s platform aggregates ecommerce companies’ data from all their accounts. This way, it gives them a more accurate view of their finances. This in turn provides additional benefits—for example, it helps them to access credit, thanks to more robust transaction data.

While Yapily’s AIS services enable Juni to provide a deeper picture of their customers’ finances, our PIS services also let them offer new payment options too. For instance, with Yapily Payments, Juni’s customers can make instant account-to-account payments.

Together, these services show the flexibility of Yapily’s open banking API. As a result of working with Yapily, Juni has:

• Processed over £2 million in open banking payments
• Seen a 500% uptake of their reporting product
• Increased the number of high-value transactions, demonstrating a growing confidence in open banking.

Find out more by reading the full case study: How Juni + Yapily are supporting ecommerce businesses through open banking

Choose Yapily as your open banking API

In this article, we’ve shared some of the key elements you should consider when selecting an open banking API. Coverage and the types of payment and data services and account connections are critical, while the importance of the reliability of the API should not be underestimated.

At Yapily, we’ve built our open banking API specifically for scalability and flexibility. To find out more about our robust and flexible platform, get in touch with us.