by James Konik
Photo by Daria Nepriakhina
A payment gateway API lets you access payment services through a standardized interface and can be used to take advantage of the features and security offered by specialist providers. You can integrate their services with your own, allowing you to accept payments with a minimum of developer investment.
In this article, you’ll learn what a payment gateway does, and what to look for when choosing one to power your online services.
What Is a Payment Gateway API?
An application programming interface, or API, is a definition that sets out the calls you can make to an online service.
A payment gateway API is an API dedicated to making payments. It connects your service and payment providers, using the API as an interface between your own application and the payment services provider’s infrastructure. You send the details of the desired transaction via the API, and it returns the results, which you can store and display to the user.
Providers include global payment methods like Visa and Mastercard, and regional and local services.
A payment gateway API is a modern alternative to hosted checkouts, which take customers away from your site to make payments. You can embed a hosted page to your site; however, this requires the use of an iframe and further integration. Using an API, you can not only keep customers on your site, but also build a seamless experience for them in any environment and retain full control over the design and features you offer.
Why Do You Need a Payment Gateway API?
A specialized payment service offers more features than a typical development team can build themselves. It makes implementing payments simpler, too, and lets you deliver similar features on different types of devices, allowing you to deliver a consistent experience on multiple platforms.
As well as UI benefits, your marketing team will appreciate its extra capabilities, as you can collect detailed information about user actions. That lets you build a picture of what works and what doesn’t. This information can inform your future decisions and helps you keep improving your sales system. Using a payment gateway API means you can extract all this useful information, without having to worry about directly handling sensitive data like credit card numbers.
Example Use Cases for a Payment Gateway API
A payment gateway API can help you solve several problems.
Accepting Payments Online
Accepting payments online is critical for anyone wanting to sell online. It’s hugely complex though, which makes delivering a smooth experience to your users a real challenge. You need to accept as many different payment methods as possible and have the ability to handle any kind of error that arises.
That means integrating with multiple services, all with different systems and criteria for making and accepting payments.
Subscriptions and Recurring Billing
Offering long-term or recurring payments can help you retain your customers. For example, you may want to offer ongoing billing or a subscription that lasts for a period of time before being renewed, which may happen automatically or not. Providing a smooth long-term or recurring payment experience is crucial if you want customers to trust you to handle regular, automatic payments.
Mass Disbursement
Mass disbursement means processing payments to multiple recipients in one payout. Examples of this kind of payment include paying staff wages or insurance claim payouts to customers.
What to Look for in a Payment Gateway API
When choosing a payment gateway API, there are several things to consider, and this section highlights some of the most important factors that should influence your decision.
Features
The biggest online stores are rich in features, and that means customer expectations are high. You need to handle everything the customer needs, such as requesting and storing customer info, while also providing a verification process that doesn’t require them to enter the same data repeatedly.
Features vary widely and providers will offer different things. Some general ideas of what to look for include:
- Offering discounts or storing points and allowing them to be used in payments, which can help you drive customer engagement. You can also offer newsletters or other marketing material, which require contact details and permission to get in touch.
- Storing card and other details is also helpful; however, it’s difficult to do yourself due to compliance and security issues. For example, you need to be PCI-DSS compliant to work with major credit card providers. You may also need to handle subscriptions as well as one-off transactions.
- Compatibility across different devices, as well as support for different currencies and regions also matter.
- Dealing with errors and problems gracefully is important, and easily overlooked. Features like automated decline recovery can help ensure transactions go as smoothly as possible, even when problems occur.
Security
Staying on top of security is especially important when handling payments. It gives your customers and service partners confidence in your applications, which means they can trust you to reliably handle transactions. Good security also prevents malicious actors from hijacking your services, which could result in leaked data or other damaging scenarios.
There are various things to look for with respect to security. As well as features provided directly, it’s also worth checking how the API provider secures its infrastructure to make sure it meets the latest standards.
Strong, point-to-point encryption lets you exchange data safely and authentication systems, like Europe’s forthcoming digital identity wallet, or Norway’s BankID, can provide another layer of security.
Supporting these allows users to prove their identity using trusted services, which in turn allows you to be confident they are who they say they are.
Complying with security standards also demonstrates to your customers that your application has an appropriate level of security. Compliance is typically a legal requirement in fintech, though compliance requirements vary from place to place.
Supporting new security features and meeting legal requirements means constant revisions and updates, which can be managed much more easily if you have a specialized service that handles payments, as well as the legal and security requirements, for you.
Integrations and Partners
For maximum flexibility, a payment gateway should be able to integrate with as many other platforms as possible. As well as payment services, that could include management and shopping platforms, blogs, and any kind of order management system. The ability to work with other APIs is also a big plus if you have multiple systems that need integration.
It’s important to be able to support different languages and currencies with minimal hassle, particularly if you’re selling online. Expanding your reach throughout the globe provides clear advantages for your business, so having a platform that lets you access all markets easily can be a significant benefit.
Documentation and Support Resources
Documentation is essential when building or integrating with a sales-driven platform. Good documentation will let your developers build what they want, quickly. Great documentation will give them tips for best performance, convey best practices, and deliver examples and boilerplate code that they can use to build the best possible system.
Conversely, bad documentation can lead to significant issues and increase your costs as developers waste time on avoidable problems.
When selecting an API, it can pay to skip the marketing pages and go straight to a product’s documentation to see if it delivers what it promises. The contents of the documentation will give you a good idea of how much effort has been put into making the system easy to use.
Sandbox Environments
Being able to test your changes is essential but difficult when payments are involved. A sandbox lets you recreate the same environment and transactions you’ll be using in a safe environment. The sandbox environment in your chosen API should let you simulate payments and deal with any of the situations you might encounter in a real-world transaction.
Being able to control what occurs and also simulate the full range of problems and issues that can happen with payments will enable you to build a system that can handle these problems when your code is live.
Design
Design informs the user experience and drives user behavior. It can be the difference between them finding what they need on your site or going elsewhere.
A well-designed experience conveys quality to customers and makes using your site more appealing, which is especially important in e-commerce. Any sign of inconsistency in the design, or even minor technical errors, can put customers off and prevent them from trusting you with their card details.
Much has been written about customer psychology, and an app design that incorporates this to deliver a satisfying customer experience will help you create a more successful application.
Developer Experience
A happy developer is a productive developer, or so they tell us. Giving your team every advantage when facing the challenge of building a system will help you deliver better systems quicker. Developers can quickly tell if a product is built with them in mind, with features they need, such as clear documentation, a strong community, and access to quality technical support. Easy access to any code or files they may need to integrate, including multiple versions of these, is also a bonus.
Identifying such an API isn’t necessarily straightforward, but letting your developers see what’s there and experiment with it will often expose problems if the API ecosystem doesn’t do everything possible to support them.
Community
A strong community helps a platform grow and mature. As the community will often work together to find fixes, you can harness the power of others to solve problems and see how they’ve dealt with the issues you’re facing.
Newsletters, forums, and direct support all help you solve issues quickly, and let you play your part in contributing to the project your apps depend on.
Taking a look at the publicly available communication channels, such as forums or Discord channels can give you an idea of how quickly and comprehensively the community responds to requests for help.
Advantages of Using Rapyd as a Payment Gateway API
Rapyd is a payment services platform that powers global, local, and cross-border e-commerce. It’s the fastest way to accept hundreds of payment methods and lets you do so worldwide. Its API lets you work globally by meeting the challenges you face in every part of the world.
Clients like Uber, IKEA, and Paysafe use it to power their transactions. It also has plug-ins for other platforms, including Shopify, Magento, and WooCommerce.
Using Rapyd gives you a fully formed ecosystem out of the box, which can be plugged into your existing services to quickly take advantage of its many features.
It’s designed to work with several of the use cases mentioned above. Its mass payouts system allows you to quickly pay multiple recipients using data in an XML or a CSV file.
Rapyd’s payment system allows you to accept cards, and payment methods of multiple types in different countries. You can define what you accept, and where you accept it from. As well as accepting payments, it can store card details for added convenience, and Rapyd helps with the PCI-DSS certification required for storing personal data.
It also handles subscriptions and allows you to offer recurring billing to your customers, along with providing invoices and the appropriate permissions.
Security and Fraud Protection
Nothing in fintech is more important than keeping your customers safe. That’s why Rapyd includes world-beating security and fraud protection, which can detect and deter malicious actors and lets your clients do business in confidence.
It includes identity verification along with a range of fraud management features, using AI modeling to identify high-risk transactions. If you are accepting payments, Rapyd offers checkout pages with Payment Card Industry Data Security Standard (PCI DSS) certification.
Robust Documentation
An API that evolves independently of its documentation is a nightmare for developers. Rapyd makes sure its documentation is continually updated to ensure your development team has accurate information at all times.
If you’re integrating with Rapyd you can be sure you won’t be left in the dark, wondering how to make a call to a function you need. The documentation includes thorough descriptions of endpoints, required and optional parameters, and code examples to show you exactly how to add features.
Sandbox Availability
Testing your payment systems thoroughly is essential. Rapyd offers a full sandbox, allowing you to test transactions in an environment that resembles a production system in every way, the only exception being you don’t actually need to pay to make transactions. There’s a toggle in the production environment that lets you quickly switch to sandbox mode and back. That makes it easy to test new features and deploy them knowing they’ll work.
Conclusion
A payment gateway API helps you share the burden of delivering advanced e-commerce systems. You can take advantage of the latest features and best security practices for a fraction of the cost of building all that infrastructure yourself.
With the wide variety of choices available, choosing the one that’s most suited to your business is vital if you want to give your customers and developers the best experience possible. You also need to keep your accounting and legal teams happy.
Rapyd is a world-class payment system. It’s fast, scalable, and works with payment methods around the globe. It’s also built with developers in mind, offering the features you need to build better cash flow management systems that’ll keep your clients coming back.