ABCs of APIs: Drive treasury efficiency with real-time connectivity

March 30, 2022

APIs are the digital bridges between businesses and banking, creating the real-time connectivity to deliver treasury efficiency and strategic value.


Technology continues to enhance efficiency and reshape jobs in the treasury function, and application programming interfaces (APIs) have been a particularly transformative tool.

An API allows applications to “talk” to one another in real time. For years, APIs have been impacting everyday living by enabling activities such as instant messaging and checking the weather forecast on a smartphone, interacting on social media, and even tracking and paying for an Uber ride.

Now, increasingly, APIs are providing a big efficiency boost to corporate treasury managers and their teams at work, freeing them up for more strategic, value-added tasks.


Simplifying and centralizing cash management

APIs are easing the collection and consolidation of bank data at companies with accounts at multiple banks.

Traditionally, and still today at many companies, that process has involved daily file transmissions and lots of manual work. “You might have a couple assistant treasurers spending the first couple hours of their day grabbing that data from bank portals manually in order to create a consolidated overview of the company’s cash position,” says Mike Draxton, vice president, Treasury Management Digital Transformation, for U.S. Bank.

When companies migrate from file transmissions to using APIs, they can log into their ERP/TMS applications and the APIs can retrieve the bank information in real time, eliminating that daily, time-consuming chore. With APIs providing timing certainty around data capture duties, treasurers can automate other daily cash management tasks, such as investing excess cash or tapping lines of credit.

“APIs eliminate the need for tactical decision making and allow treasurers to use their time for more strategic initiatives,” Draxton says. “They can conceive of different ways to use that banking data they have at their fingertips to improve treasury operations.”

For instance, corporations are leveraging APIs to centralize treasury operations. In addition to aggregating all their balance and transaction information, they’re employing these data messengers to gather information from all their payment platforms — for instance, international and accounts payable payments platforms — and process all those payments in one central application.

“APIs eliminate the need for tactical decision making and allow treasurers to use their time for more strategic initiatives.”

Avoiding payment hiccups with account validation 

APIs are helping companies prevent fraud and securely verify account ownership and status before sending payments.

For example, if an insurance company is sending a consumer a claims payment through the Automated Clearing House (ACH) network and has the consumer’s banking information, an API can reach out and confirm the account is open and belongs to the intended consumer.

Similarly, if the insurer wants to send a Zelle® payment, an API can in real time research whether the consumer is registered on the Zelle network. Or, if the preferred payment method is RTP®, an API can quickly determine if the consumer’s bank is RTP-enabled.


Speeding receivables research

APIs can also provide accounts receivable (A/R) management support.

A traditionally time-consuming aspect of A/R management is researching missing information needed for cash application. This tedious task requires an A/R team member to request file transmissions of large amounts of data from the bank and then, when it arrives, to sift through the data to locate the piece of information needed to close out a particular receivable.

“APIs can query an individual transaction and gather the missing information in real time, so you don’t have to wait for a file transmission,” Draxton explains.

What’s more, a company’s A/R application can send anticipated receivables to its bank by API and the bank’s API platform can then update the A/R application in real time when the incoming payment is received.


Storing sensitive account information

U.S. Bank is one of the first banks to offer an API that enables clients to outsource the storing of sensitive payee account information.

Businesses are aware of increasing threats and the growing need to protect their customers’ data, both for the sake of their customers and to address their own reputational risk. A utility, for instance, could mitigate that risk using the U.S. Bank Payee Token+ API. The utility would send each payee’s bank account information to the bank via the API, and the bank would store that information in a secure data “vault” and tokenize it. The next time the utility gets paid by the client, it uses the token to process the payment, and the bank account information remains securely hidden from fraudsters.

The API supports a wide array of payment types, including Zelle, ACH, RTP, checks, domestic and international wires, and cards.


Packaging APIs — the wave of the future

Companies across our economy are creating unique service experiences by packaging APIs. For instance, the Uber ride experience is created by a series of APIs. The mapping that allows you to track your Uber ride before you hop in is produced by an API call-out to Google, and then you might pay through API integrations with payment platforms such as Apple Pay or PayPal.

In the future, look for many treasury banking solutions to be powered by a combination of APIs and traditional bank services. “Already today, a company selling to consumers could improve its payment process and operations by enlisting our account validation and Payee Token+ APIs in combination with a payment service like ACH,” Draxton says.


Contact a Treasury Management consultant to learn more about how APIs can make your treasury operation more efficient so you can save time and provide a greater strategic value to your organization.

Related content

Automate escheatment for accounts payable to save time and money

3 awkward situations Zelle can help avoid

Banking connectivity: Helping businesses deliver the easier, faster, more secure customer experience of the future

Real-time payments fuel innovation

Innovative payroll solutions may help attract hourly workers

Restaurant survey shows changing customer payment preferences

The cyber insurance question: Additional protection beyond prevention

Webinar: CSM corporation re-thinks AP

4 ways Request for Payments (RfP) changes consumer bill pay

Digital Onboarding helps finance firm’s clients build communities

Higher education strategies for e-payment migration, fighting fraud

5 Ways to protect your government agency from payment fraud

Leading the way for real-time payments

Beyond the back office: real-time payments

Improve government payments with electronic billing platforms

Unexpected cost savings may be hiding in your payment strategy

Treasury management innovations earn Model Bank awards

Dear Money Mentor: How do I set and track financial goals?

Can faster payments mean better payments?

4 benefits to paying foreign suppliers in their own currency

Benefits of billing foreign customers in their own currency

Real-time answers about real-time payments

Real-time payments: the next major treasury disruptor

Ways prepaid cards disburse government funds to the unbanked

Want AP automation to pay both businesses and consumers?

Enhancing the patient experience through people-centered payments

Government billing survey: The digital transformation of the payment experience

Automate accounts payable to optimize revenue and payments

Colleges respond to student needs by offering digital payments

Dear Money Mentor: How do I begin paying off credit card debt?

Looking like a million bucks: The business case for high-value real-time payment

What government officials should know about real-time payments

Time is money: Intelligent Payment Routing saves businesses both

4 ways to make practical use of real-time payments

Drive digital transformation with payments innovation

Tailor Ridge eBill case study

Buying or leasing? Questions to ask before signing a contract

Overcoming the 3 key challenges of a lump sum relocation program

Make holiday gift giving easier in a digital world

Higher education and the cashless society: Latest trends

What corporate treasurers need to know about Virtual Account Management

Managing the rising costs of payment acceptance with service fees

3 emerging technology trends for bankers

Tap-to-pay: Modernizing fare payments pays off for transit agencies and riders

Zelle® helps Sunriver Resort make payments efficient and secure

Role of complementary new channels in your payments strategy

Streamline operations with all-in-one small business financial support

Why ecommerce for small business strategy is integral

6 timely reasons to integrate your receivables

How blockchain technology is changing treasury

Blockchain: Separating hype from substance

How COVID-19 is transforming healthcare payments

Luxury jeweler enhances the digital billing and payment customer experience

How Everyday Funding can improve cash flow

Payment industry trends that are the future of POS

Modernizing fare payment without leaving any riders behind

Access, flexibility and simplicity: How governments can modernize payments to help their citizens

Webinar: Digitizing receivables to transform B2B rent payments

Checklist: What you’ll need for your first retail pop-up shop

Increase working capital with Commercial Card Optimization

How mobile point of sale (mPOS) can benefit your side gig

P2P payments make it easier to split the tab

When your spouse has passed away: A three-month financial checklist

How to save money in college: easy ways to spend less

Myth vs. truth: What affects your credit score?

Integrated receivables management solution supports customer focus at MSC Industrial Supply

ABCs of APIs: Drive treasury efficiency with real-time connectivity

Hospitals face cybersecurity risks in surprising new ways

How jumbo loans can help home buyers and your builder business

How real-time inventory visibility can boost retail margins

How emerging banking solutions enable better decisions

Webinar: Cash management strategies for higher education

Escheatment resources: Reporting deadlines for all 50 states

Empowering managers with data automation and integration

Common pitfalls to avoid in the equipment financing process

The secret to successful service provider integration

How running a business that aligns with core values is paying off

Meet the Milwaukee businessman behind Funky Fresh Spring Rolls

How electronic billing platforms improve government payments

How to redefine challenges with business collaboration

Rethinking common time management tips

How to apply for a business credit card

How a small business is moving forward during COVID-19

How to accept credit cards online

3 ways to gain loyalty with your customers

Finance or operating lease? Deciphering the legalese of equipment finance

Digital trends poised to reshape hotel payments

Three healthcare payment trends that will continue to matter in 2022

Safeguarding the payment experience through contactless

How AI in treasury management is transforming finance

Understanding and preparing for the new payment experience

White Castle optimizes payment transactions

ABCs of ARP: Answers to American Rescue Plan questions for counties

The AI journey in finance: How to make it part of your strategy

Government agency credit card programs and PCI compliance

3 benefits of integrated payments in healthcare

Webinar: AP automation for commercial real estate

COVID-19 safety recommendations: Are you ready to reopen?

How to improve digital payments security for your health system

Top 3 ways digital payments can transform the patient experience

Webinar: Fraud prevention and mitigation for government agencies

Webinar: CRE technology trends

Webinar: Robotic process automation

Webinar: CRE treasury leader roundtable