Digital money transfers have quickly become the new normal for sending money globally. Finding a reliable money transfer system lowers cart abandonment rates, improves your brand’s receptivity to potential customers, and improves ROI. So choosing the right payment technology makes all the difference.
A payment API (or application programming interface) provides open banking and is the key to finding reliable money transfer services. But what should you be looking for when shopping for a payment API?
With new digital currencies emerging, like cryptocurrencies and stablecoin, you should consider payment APIs like Sila that expand the box and include other types of services, payment processing, and international payment processing options.
Differences Between Money Transfer APIs
A functional payment API, one which can handle a range and high volume of transactions, is quintessential to a robust digital ecosystem. API functionality, like how the API handles return codes to the identity verification of the users, become a crucial ingredient to finding a payment API that can handle your business’ needs.
Open banking APIs provide many functions, so, as a business, you need to identify the services that are key to your operations. For example, if you want to sell a payment app, like one that processes peer-to-peer (P2P) payments, then you might find that you’ll need to create your own payment API. But if you are an eCommerce platform, then your solutions are variegated.
Some key differences between payment APIs include:
- The ability to process ACH payments; in this case, the fintech solution would need to be approved as an ACH Operator so that they can submit and accept ACH debits and ACH credits
- Their ability to send money internationally; in the US, the financial institution would need approval for International ACH Transfer (IAT) or a secure alternative like cryptocurrency exchanges
- Bank account linking services
- Identity verification services
- Know your customer/business (KYC/KYB) for confirming identity, reducing fraud, and improving security
- Compliance capabilities
- Focus on open banking features
Your business will also need to consider the market that you are operating in. Industry restrictions are serious. Many financial institutions will refuse to service companies within a historically risky industry or turn away a business that might risk the confidentiality and security of existing users or the payment APIs system. The payment API must also adhere to several regulatory frameworks, so you need to find one set up for your industry/market.
While your short-term needs might involve simple payment processing, consider investing in a payment gateway or digital wallet for more versatility as you scale.
What To Consider When Comparing APIs For Money Transfers
In addition to the points above, there are business use cases to consider when shopping for a money transfer API, including:
- The ease in which any currently existing APIs can be implemented into your payment system
- The APIs functional scope
- Whether the API will scale with your business or not
- Customization or white-labeling
- Fees imparted upon your business for each funds transfer (which will be reflected in the fees your user has to pay)
- Processing timelines
- The payment method options accepted
- Whether the bank payment API can hold cash or digital currency
- Ability to process cross border payments
- Recurring billing functionality
- Bill payment features
- Mass payment features
While you may think that your immediate need for the API will simply be to process payments, there are other uses that you need to consider. For example, you could implement a digital wallet if you want customers or clients to upload money into a given account that they can forget about. If this is the case, you’ll want a digital payment API that is FDIC-insured and can hold a certain amount of money.
Bank account linking and ID verification are crucial for businesses that operate using recurring payments. If you have clients who use bill payment, you’ll need a system or service supporting ACH transfer and secure linking. Naturally, if you are using an already existing API, then you’ll have to consider the fees and payment timelines as you and your user base will have to rely on those. Consider if those fees are worth it.
If you want to allow for payments from international users and the payment service is limited to US-based addresses for either ACH transactions or for using a credit card. You’ll want a service that can connect to users outside of the US. This would drastically open up your market to global payments.
Non-US users will need to have a bank account with a financial institution approved within the International ACH network, requiring a gateway operator. Or, you can consider an API with its own stablecoin, which can allow users to submit their currency into the stablecoin currency to make seamless transactions outside of the bounds of the international money transfer network.
Ease of Implementing an API For Money Transfers
When considering an API integration for online payment processing, know that implementing an API into your current system is relatively easy. Depending on the API that you are considering, there are usually small coding configurations to think about, as well as nuances within your system (such as web coding, authentication, and more).
However, implementation is not always straightforward. Of course, this depends on your setup. If you want a mobile app, you will have to go through creating your own mobile app to process the payments. Even if the API could interact with your web and be implemented into a mobile app, this process might not be synchronized. You might have very different user experiences on each device.
If your business is operating with a P2P money transfer app or a money transfer API for a car service, you might find implementing the API requires you to jump through too many hoops. This could be an issue if the payment is a major selling point of your business/service. It would be best to create your API in these cases to control the API data and user experience. Consider a digital wallet or payment gateway that can store digital cash.
Building Payment APIs through Sila
There are many money transfer APIs out there. Instead of going with a branded API provider that forces you to use their fees, schedule, and branded products, know that you can easily create your payment API for bank transfers.
Creating your API gateway sounds complicated, but with an SDK package through Sila, and a team of developers and engineers on Sila’s support side to help you out, you can actually create your own payment API that is fully white-labeled and customized for your needs.
By working from an SDK package, you can work around technical debt, processing fees, software development pains, and instead, you get to create the perfect payment API for your needs. In creating your own API provider, you will have much more control over the processes and the payment methods that it can handle. Sila’s payment API can:
- Handle an ACH payment as an ACH operator
- Hold digital money in its FDIC-insured bank account
- Provide secure bank account linking through a trusted third-party (which is often more reliable than you or the API provider doing bank account linking)
- Customer KYC and Business KYB verification
- Cryptocurrency transfers with Sila’s patented stablecoin
- International money transfers with the SILAUSD stablecoin!
While there is a bit more work involved with creating your own payment API, it is worth the effort. In this endeavor, you can create your own payments API that is perfect for your business. You have more control over the price per transaction since Sila’s pricing for each transaction is extremely affordable. And, Sila has some of the fastest processing timelines out there!
Not only is Sila more affordable and fast, but it is also extremely secure. See today what the Sila difference means for your bottom line.