You’ve probably heard the term "API" at some point in your business journey but may have brushed it off as something that applies only to tech gurus and programmers. In fact, APIs make important technology accessible to a wider audience and can impact many areas of a business – including the way retailers accept payments.

Here’s how payment-specific APIs are changing the way that customers shop – and why you should familiarise yourself with them as your business grows.

What's in this article?

• What does "API" stand for?
  
• What is an API?
  
• What is a payment API?
  
• How do payment APIs work?
  
• Which types of businesses use payment APIs?
  
• How to choose a payment API
  
• How Stripe APIs support payments for businesses
  

What does "API" stand for?

"API" stands for "application programming interface".

What is an API?

APIs exist as an interface, or go-between, for two different pieces of software. They are a plug-and-play way for developers and site builders to use tech applications without needing to build the code themselves. By understanding which features are available as an API and implementing that API into an existing site or tech offering, developers can upgrade their work quickly and accurately, instead of creating everything from scratch.

APIs let developers take advantage of features offered by brands or solutions that they love, ensuring a more seamless integration and better results. (In many cases, developers still have to do their own customisations to make an API work for their particular product or service.) Additionally, API creators often provide support and education for developers, which helps ensure that their API technology is used consistently across platforms and in the intended payment method.

APIs are considered to be very reliable. In a 2020 survey, over half of IT professionals stated that APIs rarely break or malfunction, and therefore do not pose a problem for businesses.

What is a payment API?

Payment APIs help online retailers manage payments. They offer consistency, security and seamless integration with a variety of online businesses. They also reduce the burden of meeting evolving regulatory compliance rules.

Payment APIs may be offered by the payment processor or a payment gateway, but the goal is the same: to make it easier for businesses to collect payments and for customers to complete purchases. APIs also help meet some of the security measures that allow customers to feel safe when making an online purchase, while also protecting payment processors and card companies against errors that may occur when developers create their own payment solutions or when customers mistype their financial information.

Some payment APIs are free to use, while some charge businesses per transaction or bill using a subscription model.

How do payment APIs work?

A payment API connects a retailer’s website with the payment processor used at checkout. It offers a direct connection to the payment network, eliminating the need to recreate payment functionality. Offering both one-off and recurring payments, APIs make it easier for customers to complete purchases and for businesses to scale. Most payment APIs are highly customisable and can be used alongside payment APIs from other payment solutions and gateways.

Retailers using payment APIs receive automated support for payments. For example, payment APIs can automatically verify that a customer’s payment information is valid and up-to-date, detect and prevent fraudulent transactions, and provide real-time data on transaction status and payment history. This can help retailers streamline their payment processes, reduce errors and fraud, and provide a better overall customer experience.

In addition to automated support, many payment APIs also offer customisable features that allow retailers to tailor their payment processing to their specific business needs, such as recurring billing or subscription payments. Payment APIs can also provide real-time reporting, which is useful in managing inventory and dealing with potentially fraudulent card payments.

Using payment APIs can be as simple as pasting in a snippet of code, which can be customised by use case without installing additional libraries of code or additional software components.

Which types of businesses use payment APIs?

All types of businesses can use payment APIs. But APIs are traditionally used by online retailers, including businesses that sell everything from beauty products to gaming apps. Some brick-and-mortar businesses that collect payments online may also use payment APIs. It’s becoming more common for individual business owners, such as freelancers and consultants, to include payment APIs on their web properties to help clients make payments easily.

Website companies often include payment APIs as an optional feature in their templates, so it’s possible for a business or individual sole proprietor to use an API without realising it. The plug-and-play possibilities of payment APIs give service providers – like website-hosting companies – an easy way to offer payment services, without having to spend resources developing their own solutions.

Generally, anyone who wants to accept online payments is a potential payment-API user.

How to choose a payment API

There are many payment-API options to choose from. Doing your research can save you time and money, and ensure that you deploy an API that is compatible with the systems and technology that you’re already using.

A solid payment API should offer the following:

• Ongoing technical support, including support staff, and well-written, frequently updated documentation and resource guides
  
• API client libraries, with cut-and-paste code in the most common programming languages, to help you gear up quickly without spending a lot of time learning how the code works
  
• Reliable uptime, so you don’t have to worry about outages when you need payment services the most
  
• Reliable and relevant updates, when needed
  
• Secure credentialing through API keys and other measures to protect access
  
• Testing opportunities, such as a sandbox, so that you can try out an API before you commit to using it on your site
  

Stripe payment APIs are built with modern financial and technical standards in mind, so you know you’re getting all the benefits of payment APIs alongside access to a trusted and reliable network of services.

How Stripe APIs support payments for businesses

Stripe’s robust network is used by thousands of e-commerce sellers and businesses, many of which already use Stripe’s payment APIs to keep transactions safe, secure and simplified – even at scale. Stripe provides clear and detailed documentation for developers and site builders to support easy integration, testing and customisation.

Creating a payment link with the Stripe Payment Links API is simple:

1. Create a custom payment page with the API, which can be translated automatically into over 30 languages based on your customer’s browser settings.
   
2. Share a link to the Payment Links payment page, through email, social media or your website.
   
3. Receive payments from over 20 supported payment methods, including Google Pay, Apple Pay, credit cards and debit cards.
   
4. Your customer will be directed to your custom checkout completion page, where you can share additional information about their order and your business, as well as promotions and offers.
   
5. You will receive the information about the order, including the method of payment, so you can make sure that the payment has been processed completely before fulfilling it. (Debits from banking accounts may take extra time, and customising your checkout messaging to communicate this to customers is something that you can do through the API.)
   
6. Payment links can be activated and deactivated as needed.
   

Any business using Stripe that already has a product catalogue (no matter the size) can get started using the Stripe Payment Links API right away. Further support for developers can be found on Stripe’s website.