There’s still hell to pay in the back-end, says Marten Nelson, Co-founder, Token.io. True digitisation in payments means overhauling the core infrastructure as well as its connectivity layer.

 All the hype about digital transformation in financial services risks eclipsing something really important: that this ‘new dawn’ of open banking extends only as far as the connectivity layer that enables payments to be authorised. It doesn’t touch the back-end systems that actually move the money.

 For many, this doesn’t matter. For a whole host of payment use cases like e-commerce transactions, domestic account transfers and credit card payments, the fact that the customer’s bank simply adjusts their balance when a payment is authorised is more than enough.

 Cosmetic surgery, however, neither makes you fitter nor faster. And so it is with payments. The nips and tucks in today’s system are already visible; take the painful settlement times and exorbitant costs of international money transfers as a case in point. The difficulties in making cross-border business-to-business payments also suggest that not everything is as it should be. Both of these services involve larger sums passing through a hairball of back-end systems before they finally arrive as cleared funds at their destination.

 That’s assuming they do arrive, which isn’t always a given.

 Solving these challenges with technology requires more than interoperable APIs. It needs a whole new approach to international payments.

 We shouldn’t criticise open banking, of course; it’s driven by noble causes and, in time, will achieve great things. PSD2 and the API revolution is opening up the banking market, increasing competition and fuelling a race to the top, where the best providers will win out by delivering more secure, more convenient and more cost-effective financial services to everyone.

 Just don’t go thinking that the journey to digital payments starts and finishes with APIs. The reality is that they’re just a little taste of what’s to com