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The Role APIs Play in a Target Instant Payment Settlement (TIPS) Transaction

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The Role APIs Play in a Target Instant Payment Settlement (TIPS) Transaction

This is a demonstration of a hybrid API banking implementation to handle a TARGET Instant Payment Settlement (TIPS) between a customer and retail store.

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This is a demonstration of a hybrid API banking implementation to handle a TARGET Instant Payment Settlement (TIPS) between a customer and retail store. Providing a walk-through of what is involved with a common everyday transaction that many of us take for granted, and is enabled by a variety of API-driven solutions. The goal with this demonstration is to help provide a narrative for why banks should be investing in their API infrastructure, including the next generation event-driven infrastructure, that helps augment operations, making things more automated and real-time.

Retail Instant Payment Transactions At Louis Vuitton

TARGET Instant payment SettlementThis Retail Instant Payment Transactions At Louis Vuitton is meant to provide a demonstration of the role that APIs play in everyday retail transaction, showcasing how our lives are enabled by web infrastructure that exists all around us in the physical world. Illustrating in detail how we depend on APIs, but also how event-driven API infrastructure can help ensure that the proper transactions occur where and when they are needed to keep our lives moving forward.

John Is Shopping For His Wife At Louis Vuitton

The center of our story today is a man named John who is out shopping, and one of the places he has stopped to look for gifts for his family is at a Louis Vuitton retail outlet. John spends some time looking around the store until he finds an item that he thinks will make his wife happy, and he heads up to the cash register to pay for his purchase with his bank debit card, setting an instant payment transaction in motion.

1) Louis Vuitton Retail Point of Sale Sends Transaction to Their Bank — When John swipes his debit card at the cash register in Louis Vuitton, their point of sale (POS) system sends the transaction to their bank for processing in real-time.
2) Louis Vuitton's Bank Participates in Target Instant Payment Settlement (TIPS) — Louis Vuitton's Bank participants in TARGET Instant Payment Settlement (TIPS) (https://www.ecb.europa.eu/paym/target/tips/html/index.en.html), allowing for all payments at retail stores in Europe to implement real-time payments. Providing a more real-time experience when it comes to transactions that occur in their retail stores.
3) Louis Vuitton's Bank Initiates Payment in TIPS — Louis Vuitton's Bank initiates the TARGET Instant Payment Settlement (TIPS), setting into motion our real-time payment scenario, that will allow John to purchase what he wants at the store — all of which happens in seconds, but we'll break down each step along the way.

TIPS Receives Payment And Send Transaction to John's Bank

The TARGET Instant Payment Settlement (TIPS) core has received the payment request from Louis Vuitton's bank, requesting that John's bank be sent the transaction request for approval, which will ultimately allow his purchase to go through.

TIPS payment requestJohn's Bank Receives TIPS Payment Request

Since John's bank participates in the TARGET Instant Payment Settlement (TIPS), it is able to respond to TIPS payment requests in real-time using their API infrastructure and choreography engine to accomplish everything that is needed to satisfy the request.

1) John's Bank's Choreography Engine Accepts TIPS Payment Request — After verifying that John has sufficient funds in his account, his bank's choreography engine goes ahead and responds to the TIPS payment request, allowing the real-time payment to be settled and have the retail store move ahead with the sale.
2) John's Bank Uses Orchestration Engine Which Receives Transaction — John's bank uses a choreography engine, which is designed to interact with the TIPS core infrastructure for the bank. When the TIPS transaction comes in from Louis Vuitton's bank, the bank's choreography engine responds to the transaction, setting into motion a series of actions needed to respond in real-time.
3) John's Banks Choreography Engine Checks His Account Balance — Before John's bank can respond to the TIPS payment request, it needs to check the balance of his account and make sure he can afford what he is purchasing. Their choreography engine has instructions to validate account balance for all incoming TIPS transaction before it proceeds with any next action.

TIPS Settles With Louis Vuitton Bank

Upon receiving the acceptance of the payment request from John's bank, the TIPS core being settling the transaction, beginning with Luis Vuitton's bank, moving the funds to their bank account, and marking the transaction as settled.

TIPS Settles With John's Bank

After settling with Luis Vuitton's bank, the TIPS core the settles with John's bank, taking the amount of the transaction from his account, and marking the transaction as being settled — taking care of John's financial obligation while shopping.

John Stay In Tune With His Bank Account

John has more shopping today, and he prefers to stay in tune with what is happening with his bank in real-time, which is one of the reasons he chose the bank he uses. They provide a mobile application that allows him to stay in sync with what is happening with his accounts in real-time, allowing him to know where he stands before he leaves the retail store.

1) John Gets Notification From His Bank Of Account Balance — Because John's bank has a robust API infrastructure, including a choreography engine and other event-driven infrastructure, he gets a real-time notification of the new balance on his bank account any time it changes.
2) John Gets Notification From His Bank Of Transaction — Because John's bank has a robust API infrastructure, including a choreography engine and other event-driven infrastructure, he gets a real-time notification of the status of his transaction as he stands at the counter of Luis Vuitton.

Mobile ShoppingJohn Can Keep Shopping Knowing He Has Enough Money

As John is walking away from the counter, leaving the store, he has received notifications of the transaction and his new account balance, leaving him confident that he can keep shopping for the family as he walks around the shopping area downtown. Showing the importance of API infrastructure, as well as event-driven API infrastructure when it comes to enabling everyday functionality that we often take for granted, and where real-time, event-driven capabilities make all the difference in the world.

This Transaction Experience Depends on Louis Vuitton's Bank Investing In API Infrastructure

For this transaction to have occurred, it requires Louis Vuitton's bank to have invested in the proper API infrastructure, as well as Louis Vuitton investing in API infrastructure at the point of sale (POS) layer. Allowing this transaction to be initiated and then ultimately choreographed to carry through with the multiple transactions that will be needed to complete the sale within one of their retail stores.

This Transaction Experience Depends on John's Bank Investing In API Infrastructure

For this transaction to be satisfied in real-time, it requires John's bank to have invested in the proper API infrastructure, allowing transactions from TIPS to be choreographed as part of each step needed to satisfy the payment request and allow John to buy what he needs. Providing the account features, the overall banking experience, and real-time notifications and awareness that a next-generation API-driven banking application provides, ensuring that people like John continue as a loyal banking customer and living the life they desire.

Hybrid API Infrastructure for the Win

This demonstration is designed to amplify the benefits of banks and retail stores having simple web APIs for the resources they depend on to do business. It is also designed to show the importance of real-time, streaming, and event-driven orchestration across these valuable API resources, allowing for the pushing and pulling of critical data around the web, between service providers, with the ability to choreograph exactly the types of experience consumers expect when it comes to doing business each day and live their lives as they desire.

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Topics:
integration ,apis ,target instant payment settlement ,api banking implementation

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