The document outlines a proposed "Pay Later" API specification that would allow customers to pay for purchases in installments directly through their bank. The key points are: 1. The API would allow a customer to select installment loan terms directly through their bank during checkout at a merchant website. 2. It describes the customer journey where the customer authenticates with their bank, selects installment payment options, agrees to terms, and the merchant receives authorization for payment. 3. The API is designed to reduce costs for banks and merchants while providing customers more flexible payment options directly through their bank during the checkout process.

1. “Pay Later” API Specification
A Simple Installment Loan Product based on ISO20022
February 2019

2. Participants
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• Small strategic working group to publish V1.0 of the standard
• Rapidlyscalableacross large number of banks and merchants globally

3. ‘Pay Later’ Customer Journey (original requirement)
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1. User selects ‘Pay by Bank’ as the method of payment during the checkout (note that
this may be stored as part of the Merchant’s profile for the User)
2. User authenticates with their bank
3. User selects between ‘Pay Now’ and ‘Pay Later’
4. User selects instalment loan terms
5. User confirms instalment loan terms and accepts terms and conditions
6. Merchant receives payment authorisation
7. Merchant completes order with User
8. Merchant receives payment from Bank, e.g. through Instant Payment scheme
9. Bank services loan with User
Also defined:
• Basic Void and Refund flows

4. Pay Later Overview
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Merchant
Context:
• Regulatory action creates more competition in financial services
• PSD2 in Europe
• Open Banking in the United Kingdom
• Request to Pay (RTP) developments globally, e.g. UPI in India
• Higher compliance costs, lower revenues for banks
• Merchants seek frictionless payments, low cost, maximum buying power at point of purchase and
reduced fraud and chargebacks
• Full alignment with ISO20022

5. Example Flow – Existing Bank Customer
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Merchant Checkout
Payment Options
1. Credit/Debit Card
2. Pay Now by Bank
3. Pay Later by Bank
DeliveryAddress
…
OLED TV $1200
Bank Authentication Choose Terms at Bank
TV EMPORIUM
OLED TV $1200
Agreement with Bank
Username
One Time
Password
Payment Options
1. 3 monthly
payments of
$420
2. 6 monthly
payments of
$210
3. 12 monthly
payments of
$105
TV EMPORIUM
OLED TV $1200
Terms & Conditions
……………….
……………….
……………….
CONFIRM
12 Monthly payments of $125
Interest Rate 5%
Total Repayment $1260
Total Interest $60
Merchant Confirmation
• Order number
• Delivery Details
• ...

6. Technical Standards
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• Transport protocol: TLS 1.2
• Authorisation: OAuth2
• Character set: UTF-8
• Architecture: REST
• Data model: ISO20022
• Format: OAS 3.0
ISO 20022 Methodology