Bank Integration (Automatic Payments for AP & Reimbursements from Light)

Light can integrate to +500 banks for automating payments. For confirmation of coverage for your bank setup, please reach out.

Once configured, your AP invoices and reimbursements can flow directly from Light to your bank for secure execution.

Step 0 – Scoping Meeting (SoW)

Before any technical connection, your bank, Light, and your team hold a scoping meeting to:

Agree on the Statement of Work (SoW)
Map out supported payment types (e.g. domestic, SEPA, international, priority payments, reimbursements)
Confirm the connection method (SFTP, Bank Connect, EBICS, or API)
Define which file formats are required (commonly ISO XML Pain.001, Pain.002, CAMT.053, but may vary for API integrations)

💡 Pro tip: Always include all relevant legal entities and accounts in scope to avoid rework later.

Ongoing coordination: For any integration project, Light recommends setting up weekly recurring meetings with the bank until go-live. This ensures alignment on timelines, technical tests, and issue resolution.

Project Lifecycle Overview

The project implementation follows a structured lifecycle. Each stage requires collaboration between you, your bank, and Light.

Lifecycle stages:

SOW & Sign-off – Scope and Statement of Work agreed
Setup Test Connectivity – Bank + Light establish secure connection
Setup CAT Environment – Customer Acceptance Testing (CAT) environment prepared
CAT1 & CAT2 – Iterative test cycles for payment types and formats
Sign-off – Confirmation that testing is complete
Production Setup – Connection rolled out in live environment
PVT (Production Validation Test) – Penny testing in production
Final Sign-off – Agreement to move forward
Go-Live – Full automation of payments and reimbursements

💡 Tip: Certain stages typically requires sign-off from your bank and your team. Keeping clear owners helps avoid delays.

Signing Agreements

Once scope is agreed, your bank will issue agreement papers (often SoW and/or SADF).

When preparing, make sure you know:

Who in your organization needs to sign
Where papers will be sent for signing — some banks still require physical letters with a wet signature
Timeline for signing — delays here can push the entire integration

💡 Special note for Bank Connect: the bank issues an activation code that often expires within 30–60 days. If not activated in time, the process must be restarted.

Connecting to Your Bank

After signing, the technical setup begins. You must first notify your Cash Manager and include Light (peter@light.inc, tech@light.inc) in the correspondence. Light will lead the integration with your bank.

Light supports several integration channels:

a) SFTP (Secure File Transfer)

The most common method for secure corporate payment transmission.

Example: J.P. Morgan, Citibank, BNP, HSBC (Innovation Bank), Danske Bank, SEB, Barclays
Process: Light generates PGP + SSH keys, bank provisions credentials, and files are exchanged securely.

b) Bank Connect

A Nordic-standardized channel for payments and statements.

Example: Nykredit, Nordea, Jyske Bank
Process: Secure standardized messaging for payments and statements.
Note: Activation code required; usually valid 30–60 days.

c) EBICS

Used for secure file-based transmission often in the DACH region.

Generally used in Germany, Austria, Switzerland, and France
Only available if your bank supports EBICS.

d) API Integration

Some banks support direct APIs for near real-time payments.

File formats and flows differ.
Confirm specifics during the scoping meeting.

💡Note: Banks often charge a setup and/or subscription fee for these connections. Costs depend on your banking agreement and Light has no commercial incentives here.

Authorisation and Testing

Step 1 – Authorisation:

Bank provisions user access.
Always include tech@light.inc in credentials.

Step 2 – File Exchange:

Outgoing payments: typically ISO XML Pain.001
Status updates: typically ISO XML Pain.002
Statements: typically ISO XML CAMT.053 (with end-to-end reference)
API integrations may use alternative message structures.

Step 3 – Testing:

Light and the bank validate test files across all mapped payment types.

Step 4 – Production Rollout:

After successful tests, the connection is enabled in production.
Penny tests ensure small-value payments flow correctly.

💡 Pro tip: Full setup typically takes 6–12 weeks depending on bank. Light can help accelerate the timeline.

Data Quality Requirements

For automatic payments to succeed, clean data is critical:

Vendors (AP): Bank account numbers (IBAN/BBAN), BIC/SWIFT codes, and postal codes must be correct in the vendor master data.
Users (Reimbursements): Employee bank details and home address (including ZIP/postal code) must be accurate.
If payment details or ZIP/postal codes are missing or incorrect, the payment will fail at the bank level.

💡 Tip: Always validate vendor and employee data before go-live to minimize rejects.

Automating Payment Workflows

Execution Flow:

AP invoice approved for payment run (“Scheduled” phase) in Light
Payment file generated automatically
File transmitted to bank as a pre-approved payment on the payment date (Pain001)
Light receives an acknowledgement file that the payment and structure is confirmed/rejected (Pain002). Confirmed moves the payment ahead for payment. Rejected flags error message to user in the UI.
Bank processes and returns status file on next day statement (Camt53)
Light marks the payment as paid and moves it to the “paid-tab”
Reimbursements follow the same workflow

✅ With bank integrations in place, your AP and reimbursements run automatically, ensuring faster processing, higher security, and fewer manual errors as an end-to-end closed loop flow.