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The Essentials of Payment APIs for Developers

Payment APIs for Developers

What is a Payment API for Developers?

In today’s omnichannel world, customers expect a completely seamless experience from first interaction to onboarding and beyond. Customer journeys are more dynamic and interconnected than ever, and any friction between touchpoints can be an immediate dealbreaker. Thanks to the plethora of resources and talent available, many software companies have been able to streamline their product, marketing, and user experiences to meet shifting customer expectations. However, there is often one crucial area that is often overlooked: payments.

The truth is, managing payments is tricky; a partnership with a third-party payment processor can be quick and cost-efficient but will likely cause friction for customers since these solutions don’t integrate into your product. But with the right partner and a capable team of developers, software companies can leverage a payment API for developers to expand the capabilities of their products and streamline their payment experience. In this three-part post, we’ll explain why payment APIs for developers are a key piece of the payment puzzle and what to look for within a payment API when choosing a payment provider. 

What is a payment API?

A payment API (Application Programming Interface), also known as a payment gateway API or payment processing API, is a set of protocols, tools, and rules that enable applications to communicate with each other. It provides pre-built methods and functions that developers can use to handle the flow of payment-related data, facilitate the processing of transactions, and manage various aspects of the payment process.

In other words, a payment API acts as a bridge between your software platform or application and the payment gateway or processor, allowing you to implement payment functionalities without having to build the entire payment infrastructure from scratch. Unlike a third-party or hosted checkout, payment APIs allow companies to seamlessly accept and manage payments directly within their application or interface.

What payment API features should developers look for?

A payment API for developers is designed to help businesses improve their payment processes and enhance the customer experience. Here are some of the key features developers should look for when evaluating payment APIs:

Onboarding and Underwriting

Payment APIs should allow you to embed the onboarding process directly into your software. This creates a unified customer experience and a frictionless flow so merchant clients can sign up to accept payments. As a part of the onboarding process, your payment provider should build in the capability to underwrite your clients to assess the risk they pose. This account approval process should happen quickly — same day or even instantly. 

Payment Processing

At the basic level, payment APIs enable developers to integrate payment processing capabilities into their software products. While the exact functions will vary depending on the provider, you can expect features such as recurring payments and support for multiple payment options and currencies. 

Ledger and Reconciliation

A payment API should record every event on the payment system, including when a merchant is onboarded, when transactions are authorized and settled, merchant/partner funding amounts, and merchant/partner fees. Transactions are cross-referenced and reconciled, and reporting should be available to ensure fees are assessed correctly as per the merchant agreement. 


A payment API should include the ability to pay out your merchants. The Ledger should feed a daily file with funding instructions for each merchant. The payment API capabilities should include defining fee and payout schedules at the portfolio or segment level, as well as calculating fees and net revenue amounts, and finally depositing funds in a connected bank account. Payment APIs should also have same-day funding capability and real-time status updates on settlements and payouts. 

Reporting and Analytics

Every payment processed through your platform generates transaction data. Payment APIs allow you to harness that data with reporting and analytics features that can manage, store, and track payment details to identify trends and insights. The provider you choose should offer a dashboard that provides easy access to historical data, real-time reporting, and the ability to create custom reports.


No matter how you accept payments, it’s important that the payment provider and its payment API offer advanced security features, such as PCI DSS compliance, tokenization, encryption, and fraud detection. These features help you protect payment data and reduce the risk of fraud and data breaches.

Testing Environment

As you build your payment experience, you want to test the process from a customer perspective before you take it live. This can be done in a testing environment or sandbox. Testing will ensure that everything runs smoothly and that the payment API meets your requirements upfront.

Easy Integration

The best providers make integration with your software platform easy, thanks to robust APIs and developer tools. The API should be easy to understand, well-documented, and provide clear code examples to help your developers get started quickly. 

Customer Support

Implementing payment APIs is no simple task, so the provider you choose must offer adequate support before, during, and after implementation. This will provide peace of mind throughout the entire development process and improve your integration experience.

Integrating a payments API into your business is a great way to add value to your services while ensuring secure payment processing for you and your customers. With the right payments API, businesses can easily accept payments from customers and create a seamless payment experience. 
Check out our payment API documentation or request a consultation to learn more.

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