As we move swiftly towards a digital future, businesses are looking for better ways to move and manage money. Digital money, digital currency, payment gateways, and mobile/digital wallets are becoming commonplace, as they make money management easier and faster than ever.
As innovators, business owners, entrepreneurs, and web developers, we know that the money transfer API is what is at the core of how we manage money digitally and how businesses and individuals can send money effortlessly.
If you’re interested in these smart pieces of code, then you’re in the right place. Money transfer APIs, or the ACH API, will continue to be the way of the future. Read on to learn more about the money transfer APIs powering our economies.
Money Transfer APIs
While it might sound like tech lingo, a money transfer API actually is a type of coding that we deal with every day. The bank payment API, and even API integrations between software, are utilized as a way of sending information securely.
APIs, or application programming interfaces, are small amounts of code that are able to send data from its own endpoint (think of it as a port) to another endpoint. The code that is transferred is protected, which is the biggest draw of the API. Another major draw of the API is how simple and effortlessly it is to implement the API.
You might be familiar with software and how it functions. When you think of software, you know that you might have a lot of code working in the background to complete a function. Similarly, the API can make certain requests. The biggest difference, though, is that the API has only a little bit of code working in the background. This might not be the case with all APIs, but they are able to be integrated into eCommerce platforms, websites, WordPress back-ends, applications, and much more.
When it comes to payment API, it’s no different. The API can be created as its own stand-alone payment app and connect to a variety of services so that the money and data included in the API is kept secure. The bank transfer API is only allowed to trusted, connected services allowed by the API developer. The money transfer request might be able to make a direct deposit to a user, for example, and it can securely make this request because the receiver can be verified through KYC/KYB regulations, sent through the Automated Clearing House (ACH) network, and so on.
Money transfer APIs come in a wide range of functionalities. Common money transfer APIs include Paypal, Venmo, Cash App, Square, and Plaid. Each has a variety of services and its own patented capabilities, but what’s crucial is that their security is a priority and it keeps the data sent through the API completely secure.
How a Money Transfer API Works
We can use the example of the Sila app to break down how a money transfer API works. If you look in our API documentation, you might see some lingo around this product. Don’t worry if any of this information is confusing; this is common lingo for the API and software developer.
The basic breakdown of a money transfer API works like this:
Let’s say that the API was a stand-alone app. The API would then be built into the app and given an interface so that users can navigate the area. The API would have code set up that allows the user to register a user name, provide personal information to be verified, and connect a bank account. Once this information is approved (this will depend on the unique services of the API), then the user can send money. Money can be sent to other individuals who have that same money transfer API, for example. In this case, you would be converting your cash from a linked bank account into a digital currency. At other times, the money can be directly transferred from bank-to-bank but through the platform.
Let’s take Sila’s API as an example:
The user would register an account. Their personal information would be verified through KYC (know your customer). And the third-party service Plaid would provide secure bank account linking. The individual must also register for an Ethereum private key and public key as a way of transferring the digital currency within the app.
Once the user is approved (which takes around 50 hours), they can then send money to anyone using the app. The user can a) send cash through the Automated Clearing House (ACH) network, b) send digital money through the blockchain, and c) even sign up through a smart contract.
The versatility of a money transfer API grants users the power to send money digitally and without many of the restrictions imposed on individuals within the United States money transfer system.
Speed and Security of a Money Transfer API
Money transfer APIs are notoriously fast and deeply secure. There are a few reasons why this is the case. Money transfer APIs first take out the human aspect of basic transfers, which would inevitably slow down the transfer process. It also introduces automation in security, through encrypted data, secure private key access, and outsourced identity verification. In doing so, the process can not only remain secure (as many of these elements are almost unhackable), but it can speed up the process at the same time.
One of the biggest contributors to the money transfer API security and speed is identity verification. The web API endpoints are securely linked to only Alloy endpoint, which is securely verifying user identity and adding another layer of data protection.
Anyone using the Sila API will be able to offload data storage, which is notoriously difficult to implement. In essence, any brand wanting to implement payment APIs as a payment method would need to be fully compliant, as if they were a financial institution. Data must be stored in PCI-SSD secured hardware and complying with this and other regulations is timely. This not only takes a lot of time but also effort.
Money sent through already compliant service providers speeds up the timing associated with the money transfer service. Apps like Sila, which connect to the blockchain, make this transfer unimaginably fast.
ACH transfers take notoriously a few days in order for the transaction to go through. Instead, with an app like Sila, funds transfer through the ACH system takes only a day. Funds processing timelines for the Sila money transfer API look like this:
/Redeem_sila endpoint (all times are Pacific Standard US), ACH Credit requests received by 5:45 pm on:
- Monday: funds show up at the other bank on Tuesday.
- Tuesday: funds show up at the other bank on Wednesday.
- Wednesday: funds show up at the other bank on Thursday.
- Thursday: funds show up at the other bank on Friday.
- Friday: funds show up at the other bank on Tuesday.
- Saturday: funds show up at the other bank on Tuesday.
- Sunday: funds show up at the other bank on Tuesday.
/Issue_sila endpoint (all times are Pacific Standard US) ACH Debit requests received by 4 pm and settled by 4 pm on the day allotted. Sila tokens are issued at the time of settlement:
- Monday: funds leave the other bank on Tuesday morning, settled on Thursday.
- Tuesday: funds leave the other bank on Wednesday morning, settled on Friday.
- Wednesday: funds leave the other bank on Thursday morning, settled on Monday.
- Thursday: funds leave the other bank on Friday morning, settled on Tuesday.
- Friday: funds leave the other bank on Monday morning, settled on Wednesday.
- Saturday: funds leave the other bank on Tuesday morning, settled on Thursday.
- Sunday: funds leave the other bank on Tuesday morning, settled on Thursday.
As you can see, Sila enables near-instant money transfer options (also known as same-day ACH) through the ACH network! Sila payments are much faster than wire transfers, and also hold the capability of issuing mobile money and international money transfer capabilities.
Implementing a Money Transfer API
If you’d like to implement an online money transfer API into your business, then consider building one with the Sila API. The Sila API comes in a variety of coding languages so you can work with a range of API developers and API functionalities.
Money transfer API creates more payment options, which opens up doors for cross border payments. Transactions no longer need to go through wire transfer services, and instead, individuals and businesses can issue real-time payments.
Sila can be white-labeled and quickly implemented into any business model because of its compliance-as-a-service properties. See today how Sila can transform the way you do business!