Optimize payment transactions for Finance and Tax departments
IKOR integrates the PSD2 interface of finAPI into its SAP add-on ELZA
Simplicity in the process landscape is a huge incentive for large corporations and SMEs. To reduce the complexity within their process landscape, many of them rely on ERP systems such as that of market leader SAP.
A major advantage of SAP is that the software can be adapted flexibly and modularly for new requirements. In addition to the standard SAP system, a large number of add-ons from other software providers are also available. For example, IKOR offers ELZA, a specialized SAP add-on designed to optimize electronic payment transactions. It connects the SAP system directly to house banks and thus replaces the previous banking software. Manual uploads and downloads are no longer necessary and data transfer takes place automatically without media disruption. Payment transactions can be processed via EBICS, SWIFT, host-to-host or via the PSD2-compliant XS2A interface.
About the experts
EBICS and SWIFT are common financial terms for many companies, but what is meant by a PSD2-compliant XS2A interface?
Peter Hiekmann: Since September 2019, the second Payment Service Directive (PSD2) has required banks in the European Union to open up their payment accounts to third-party services. To access payment accounts, such as current accounts, they must set up a corresponding interface – the so-called XS2A interface. The acronym stands for “Access to Account.” This is because the aim of PSD2 is to make electronic payments safer and easier for consumers and companies overall.
What role does finAPI play in PSD2 implementation for banks and companies?
finAPI is a Bafin-licensed account information and payment initiation service provider that supports banks with the XS2A server in setting up the required PSD2 interface in their banking systems. finAPI offers an XS2A interface for companies with the banking API “finAPI Access“. This makes the banking connection easier and more secure. It is precisely this XS2A interface that IKOR also uses for its SAP add-on ELZA.
Paul, with your SAP add-on ELZA, you now offer the XS2A interface in addition to the EBICS, SWIFT and host-to-host protocols. Why did you decide to introduce this option?
Paul Friedrich: Due to its history, IKOR has a proven standing with insurance companies, banks and the public sector. We also offer SAP add-ons, especially for finance and tax departments. Mass payments are essential in these segments and can be implemented optimally with the established protocols. XS2A integration had already been on our agenda, but for a long time there were no vendors with an XS2A solution suitable for our requirements.
For this purpose, SAP operates the SAP MBC module as a cloud based software-as-a-service solution...
Paul: Correct. SAP’s focus on cloud services presents a technological challenge to customers who cannot or don’t want to use a cloud service for payment transactions for various reasons. This is because, on the SAP side, existing products are being taken out of maintenance step by step and are no longer being further developed. Therefore, finAPI as an established, additional technical connection – without cloud and for customers with collective payments – not only bridges a gap, but has created real added value.
What option do companies have that cannot or don't want to use the cloud for payments?
Paul: This question is particularly relevant at the moment because SAP’s on-premise EBICS adapter is already coming off maintenance at the end of the year. With the SAP add-on ELZA, developed and tested by IKOR, companies use a flexible and central solution – directly within their SAP system landscape, according to their individual requirements and with direct connection to their house banks. With ELZA, they can distinguish – depending on the payment type – which channel should be used technically. The payment services directive mentioned by Peter has thus created another option with providers of XS2A interfaces: it helps companies to be technically capable of making payments, to remain so, and to control operational costs.
However, most banks implement individual interfaces here, which increases the effort for IKOR as a system integrator ...
Paul: With finAPI and its PSD2-compliant XS2A interface, we have not only found a partner whose portfolio perfectly complements ours. More important for our customers is that this gives them greater flexibility in payment transactions with a uniform interface across numerous banks.
It also means they can become more independent of existing institutions?
Paul: Thanks to the connection via finAPI, companies can choose an alternative that helps them act independently and flexibly. This includes, for example, new use cases such as alternative payment of insurance premiums or the integration of alternative services.
Peter: Such new services are just as exciting from a user perspective as a high level of bank coverage, which includes new banks as well as international financial institutions. In Germany and Austria, finAPI has connected almost every bank. In addition to the major banking groups, the Sparkassen, Volks- and Raiffeisenbanken, users can also connect accounts of neobanks, such as Bunq, Qonto or Revolut via finAPI – which is by no means possible with every fintech. Currently, finAPI is available in Germany, Austria, Slovakia, the Czech Republic and Hungary. Further European countries are already in the pipeline and will be available to our customers shortly.
Which payments can be processed within the framework of the cooperation between finAPI and IKOR?
Paul: Since collective transfers and collective direct debits are used particularly within the SAP environment, these two functions are key criteria. In addition, finAPI supports real-time transfers, so-called instant payments. Currently Peter, you are working on payment requests, the so-called Request to Pay. With the combination of fast implementation of new procedures as well as the cross-national coverage, our partner choice quickly landed on finAPI.
Peter: This also benefits IKOR customers who maintain their bank accounts outside Germany and want to connect them to their accounting software. In addition to payment accounts, companies can also connect credit cards, securities accounts or services such as PayPal via the finAPI XS2A interface – another advantage with more flexibility for accounting.
What is particularly important to you in terms of streamlined payment processes?
Peter: I would like to add a note on data security and protection, as new users in particular sometimes have questions about this. finAPI has had its processes for retrieving account information and initiating payments audited by TÜV Informationstechnik GmbH (TÜViT) – with regard to compliance with data protection and data security in the IT systems used. In April 2022, finAPI received the corresponding “Trusted Site Privacy Certificate” from TÜViT.
Paul: Payment transactions should always remain flexible. By combining their strengths, finAPI and IKOR give our users the best of both worlds: Interface expertise and SAP process solutions. This enables us and our customers to jointly leverage new opportunities.
As a pan-European technology consultancy, platform integrator and software manufacturer, IKOR, headquartered in Hamburg, digitalizes the business models of insurers, banks and the public sector – with a focus on automated end-to-end processes and future-proof system landscapes. IKOR has profound expertise in the areas of integration, cloud and analytics, among others. With more than 300 employees at eight locations in Germany, Austria, Serbia, Poland and the UK, IKOR experts have been connecting participants in the digital economy and the interface economy for 25 years.
More information about the EBICS adapter ELZA can be found directly at www.ikor.one.