Updated: September 2025 (Originally published September 2021)
TL;DR: Banking APIs enable B2B platforms to embed financial services like payments, accounts, lending, and card issuance directly into their software. Through Banking-as-a-Service (BaaS) providers, platforms can launch financial features in 4-12 weeks instead of 12-18 months, seeing 2-5x higher revenue per user.
What are Banking APIs?
"Banking APIs (Application Programming Interfaces) are secure protocols that enable software platforms to integrate banking services—from payments and accounts to lending and card issuance - directly into their applications."
Quick Reference:
Main types: Payment APIs, Account APIs, Card APIs, Lending APIs
Implementation time: 4-12 weeks (embedded) vs 12-18 months (direct)
Key standards: OAuth 2.0, ISO 20022, PCI DSS, SOC 2
Types of Banking APIs
API Type | Access Level | Use Cases |
|---|---|---|
Private APIs | Internal Only | Bank's mobile apps, internal systems |
Partner APIs | Selected Partners | Embedded banking, white-label services |
Open Banking APIs | Regulated Access | Account aggregation, payment initiation |
Public APIs | Open Access | Exchange Rates, branch locations |
"The three main approaches to platform banking are: direct bank partnerships (most complex, 12-18 months), Banking-as-a-Service platforms (moderate complexity, 2-3 months), and embedded finance APIs (lowest complexity, 4-6 weeks)."
Core Banking API Capabilities
1. Payment APIs
"ACH (Automated Clearing House) processes over 29 billion payments annually with 1-2 business day settlement."
ACH transfers, wire transfers, real-time payments (RTP/FedNow), international payments
2. Account Management APIs
"Virtual accounts are numbered references that route payments to a master account while maintaining transaction-level visibility."
Account creation with KYC/KYB, balance inquiries, virtual accounts, spending controls
3. Card Issuance APIs
Virtual cards (instant), physical cards (custom-branded), controls, tokenization
4. Lending APIs
Credit decisioning, loan origination, lines of credit, revenue-based financing
Banking-as-a-Service vs Traditional Banking APIs
Aspect | Traditional Bank APIs | BaaS Platform APIs |
|---|---|---|
Regulatory burden | Platform handles | BaaS provider manages |
Time to market | 12-18 months | 4-12 weeks |
Technical complexity | High | Medium |
Available features | Limited | Comprehensive suite |
"Banking-as-a-Service providers offer pre-packaged banking infrastructure through APIs, enabling non-financial companies to embed banking features without becoming banks themselves."
Implementation Approaches
Approach | Best For | Time | Regulatory Responsibility |
|---|---|---|---|
Direct bank integration | Large Enterprises | 12-18 months | Platform |
BaaS platform | Growth-stage platforms | 2-3 months | Shared |
Embedded finance APIs | Vertical SaaS | 4-6 weeks | Provider |
The Business Case
According to Bain & Company, platforms with embedded finance see:
2-5x higher revenue per user
1.5-3x better retention
25% faster growth
"Embedded finance through banking APIs transforms platforms from software providers into essential financial infrastructure for their industries."
Banking APIs and AP/AR Automation
"Modern AP/AR automation combines banking APIs with invoice processing to create end-to-end financial workflows, reducing processing time by up to 75% and costs by 70%."
Integrated capabilities:
Smart payment routing based on amount and timing
Automated reconciliation using virtual account references
Multi-entity payment management
Real-time cash flow visibility
Frequently Asked Questions
Q: What's the difference between Banking APIs and Open Banking? A: Banking APIs are any programmatic interface to banking services, while Open Banking specifically refers to regulated API access mandated by laws like PSD2 in Europe.
Q: Do platforms need a banking license to use Banking APIs? A: No. Banking-as-a-Service providers handle regulatory compliance, allowing platforms to embed financial services without becoming banks.
Q: What's typical pricing for Banking API access? A: Payment APIs typically charge 0.5-3% per transaction, account APIs cost $0.50-5 per account monthly, and platforms often have $500-10,000 monthly minimums.
Q: What's the difference between BaaS and embedded finance? A: BaaS provides raw banking infrastructure (accounts, cards, payments), while embedded finance includes additional business logic and workflows built on top—like invoice financing or expense management.
Key Industry Applications
Construction: Progress-based payments, lien waiver automation
Healthcare: HIPAA-compliant payment processing
Property Management: Rent collection, deposit segregation
Manufacturing: Cross-border payments, supply chain finance
Getting Started
Assess need: Survey users about financial pain points
Choose approach: Direct bank, BaaS, or embedded finance API
Start simple: Launch with one use case, then expand
"Modern embedded finance infrastructure, including providers like Monite, combines banking APIs with business automation features like AP/AR processing to create comprehensive financial operating systems for B2B platforms."
Resources:
BIAN - Banking API standards
Open Banking UK - Specifications
Federal Reserve - Instant payments
EBA - PSD2 standards
