SWIFT has launched a standard for ‘Pay Later’ APIs in an effort to accelerate the adoption of the new payment model by merchants and banks.

Pay Later enables users to get traditional bank loan financing to make payments for online purchases.

Using Pay Later, customers can avail loans from their banks at the point of purchase and have the funds immediately credited to the merchants.

On the part of merchants, Pay Later increases their ability to appeal to diverse consumers and offer to them more purchase options.

According to SWIFT, the new standard will enable merchants to deploy the Pay Later option and avoid multiple expensive implementations.

SWIFT head of standards Stephen Lindsay said: “SWIFT has long been at the forefront of banking standardisation and is continuing this work in the API world.

“Our work on Pay Later is a good example of how standardisation plays a vital role in ensuring the industry can take every advantage of technological innovation.”

The new standard was developed by a working group comprising banks, merchants and technology providers.

“The aim is to create the conditions for a broad ecosystem of the Pay Later platform to provide optionality to customers, to give merchants a greater ability to sell their goods and to ensure a wide reach for banks,” SWIFT noted.