Payment APIs

At the center of every business, whether it’s an online business or a physical retailer, is the ability to efficiently and securely accept payments for products or services. Payments allow businesses to grow and expand. However, many new businesses are unaware of the importance of a Payment API (Application Programming Interface), better known as APIs. Payment APIs allow merchants to connect their various payment systems and related programs with ease, as opposed to manual integration.

Here’s a brief explanation of how merchants can use payment APIs to improve their business, from their customer experience to implementing increased data security for better fraud protection and prevention of data breaches.

How Do Payment APIs Work?

To start, an API allows two business operating systems to easily communicate with each other. Perhaps the most common example is one that is in use on an online store.?

When you make a purchase on an e-commerce website, you choose the products you want and then check out with those items in your cart. At checkout, the website sends the payment information to a payment processing system before the products ship to your home.

This checkout experience is where the API system comes into play. Behind the scenes, the payment gateway verifies the purchase and securely transfers the payment information to the payment processor and issuing bank using PCI Security Standards Council Compliance regulations.??

Payment API Processes

APIs generally follow a four-step process from beginning to end.?

• First, a customer initiates a transaction.?
• Then, the API system transmits the payment data through a shared payment network to the payment processor’s payment gateway for fraud checks. Then, through the credit card network.?
• Finally, the payment information is transferred to the issuing bank to ensure adequate funds are in the cardholder’s bank account or an available line of credit for the transaction.??

The process concludes after the results of those checks are transmitted back to the website. Meaning the transaction is approved or denied.

Payment API Benefits

Payment APIs allow for significantly more streamlined e-commerce integration, even for brick-and-mortar retailers. They simplify a process that can be extremely complicated, especially for small businesses.

APIs also grant several additional benefits, including:

• faster processing times
• additional data security
• better fraud protection
• easier ability to follow PCI compliance
• a better and more streamlined customer experience

Types of Payment APIs

There are several types of payment APIs, the two main types being hosted payment APIs and direct payment APIs.

Hosted Payment APIs

Hosted payment APIs seem like the most straightforward option for merchants, making them popular with small businesses. However, they offer the least amount of personalization and control.?

With a hosted payment API, customers are redirected to hosted payment pages, which allow them to input their billing information and inform the merchant if the transaction was approved or denied at the end of the process.

Direct Payment APIs?

Direct payment APIs might seem more complicated to implement;; however, integration is seamless with the right payment provider. With direct payment APIs, customers never leave the merchant’s website.?

The payment page is integrated as a direct part of the site. This is best suited for merchants who want maximum control over their transactions and a positive user experience during checkout. Additionally, direct payment API systems offer customization features, which allow for more personalization and greater branding opportunities.

ECS Payments APIs

ECS Payments is a leader in payment technology, and merchants with us have access to various payment gateways and APIs to fit their needs. If you’re a merchant in need of the latest payment APIs, contact us to learn more and find the perfect payment API for your business.