Cross-border Payment API: Everything You Need to Know

May 20th, 2022 by Felix Cheruiyot

Cross-border Payment API

IntaSend provides a Cross-border payment API for developers and businesses. In this article, we would like to share more detail about cross-border payment API and most importantly how to get started and use it in your applications.

With advanced technology, our individual and business practices have evolved. Nowadays, it is hard to imagine living without tech gadgets because they help us save time and ease tasks that were considered otherwise tricky. Such is the case with cross-border payments. Complicated and expensive international payments are a thing of the past - cross-border payment API has brought great ease for payee and transaction recipient as well.

Businesses can easily integrate advanced cross-border payment API and allow clients to make international payments without the complex procedures. The cross-border payments value is expected to reach a whopping $155.9 trillion. Therefore, with growing businesses, cross-border payments are only going to get bigger.

We’ll cover everything you need to know about cross-border payment API and the features you need to look out for.

Let’s get started!

What are Cross-border Payments?

Cross-border payments are needed when the payee and the recipient are in different countries. These payments can be between individuals, banking institutions, and companies as long as they want to send the payment to another country.

Even as the pandemic struck, e-commerce didn’t slow down; it got a boost which led to an increasing volume of cross-border transactions. The biggest frictions in traditional cross-border payments are authentication, payment processing, and regulatory compliance.

Businesses should accept payments from every country they target to operate internationally without any problem. The global payments ecosystem is a bit complicated; however, it doesn’t have to be impossible if you select the right payments partner.

Let’s look at some of the challenges that cross-border payments face.

Challenges of Cross-border Payments

Lack of Interoperability

Different countries have different payment methods and different rates. Without a cross-border payment API, it is very hard for businesses to integrate and forge partnerships with each provider. This will eventually be expensive and time-consuming.

Excessive Costs

Right off the bat, cross-border transactions are extremely expensive. There are a couple of intermediaries or third parties that are involved in the process of sending money across the country. These intermediaries have service fees that add up to the total cost of sending money. Further, regulatory costs and currency conversion costs are also a part of this process, making it more expensive.

Since the number of overseas workers has grown tremendously along with international businesses, the price will be the biggest deciding factor when it comes to choosing between financial institutions and payment service providers. Financial institutions have to give competitive rates to attract customers.

Transaction Time

When it comes to transaction time, cross-border payments are notoriously slow. Usually, it takes 2-5 working days for a bank transfer to go through successfully. This is considered extremely slow especially when the domestic transfers are made virtually in seconds. Similar to costs, the excessive transaction time is the result of many entities being involved in the process.

In this fast-paced world, every client and business wants quicker, reliable, and convenient service when it comes to cross border payments. Transaction time delays are nothing new; however, a cheaper and quicker payment service provider can easily become an ideal alternative for businesses and clients.

Compliance, Legal, and Security Concerns

Secure transactions are obviously expected and desired by everyone when making international transactions. Even banks want to keep the money safe and secure; however, in the past banks have become easy targets for hackers. Once the money is stolen from the bank, there’s no guarantee that it will be recovered. Businesses and customers prefer institutions with high-security measures and risk management systems that are in place for protection. Most financial institutions fail to provide the type of security that can guarantee 100% security.

Payments are heavily regulated to prevent money laundering. Moving money from one country to another requires licensing and the ability to work with trusted partners on the same. Cross-border payment API providers normally help their customers to navigate this by allowing them to leverage already existing relationships. The provider must have Anti-money laundering procedures and policies in place.

Transparency Concerns

Cross-border payments are also known for their lack of transparency which is required by both businesses and clients. There are hidden charges and other deductions involved when there is no transparency in the payment process. There should be real-time payment tracking for all cross-border payments to gain the trust of the parties involved.

All these shortcomings of cross-border payments are addressed by cross-border payment API, an innovation for convenient payments.

What is a Cross-border Payment API?

API or Application Programming Interface is a software intermediary which helps in platform integration and allows communication between apps. Payment APIs are the answer to the traditional cross-border payment process. With the help of a payment API, you can easily manage payments without any hassle. It works well for both parties involved (businesses and customers) since it allows payment optimization that can help in making fast transactions.

Every payment API provider charges different prices and different payment plans. The number of payment methods accepted might affect the payment API provider cost as well. For example, cross-border payment API can be used for various types of payment services. Both parties can receive a seamless checkout experience that can improve the overall experience as well.

Payment APIs are preferred by businesses since they can perform multiple functions such as:

Offering different methods of payments to businesses helps improve convenience for customers since they can choose the payment mode they are most comfortable with. Further, payment APIs help in tracking payment details, PCI compliance, and payment information.

Web designers and developers can create a graphically appealing experience for users so that the payment process becomes a bit interesting. API solutions provide the ability to send or receive money in the local currencies. You can either have customers make payments from the app or through the website.

Through APIs, financial institutions have also evolved and become more agile. This has resulted in better customer support, quicker information sharing, and innovative payment solutions. Further, compliance improved as a result of payment APIs.

Global Businesses have to comply with a set of rules and regulations that are put in place for different markets. Every country has different compliance regulations and businesses are expected to follow them. This helps customers receive efficient payment transactions whether it is B2B or B2C.

How Payment APIs Work

APIs allow businesses to improve their payment transactions by integrating third-party payment service providers (PSPs). The PSPs allow access to the relevant information available and use it to automate payments in separate accounts.

The payment APIs can access the payment beneficiary information, validate bank details and use the updated exchange rates to address the multiple cross-border issues in just a few simple steps after the payment or invoice is approved.

The APIs address the regulatory issues and help in reducing the cross-border compliance problems. An API solution allows instant access to important regulatory information by inputting the data as it responds to a particular query.

When regulatory compliance APIs are connected with the banking systems or any other digital platform, they can deliver automated cross-border compliance at any given transaction. APIs help e-commerce businesses upscale their cross-border payment processes by granting them instant access to regulatory information. They keep the payment processes transparent, easy and secure.

When users communicate via a digital platform or a mobile app, the APIs store personal information about the users and records their consumer behavior. The data is often used by companies to analyze consumer behavior to improve the overall interface. It also helps in creating new products and services.

It also helps business analysts and product strategies to anticipate and predict consumer behavior and explore new business opportunities. Often, the data is also useful for developers as they design the entire interface of the product based on the user experience of their customers on their existing platforms. Moreover, a payment gateway API allows developers to enhance the capabilities of their software.

A payment API is commonly referred to as the antonym of the hosted checkout in which the transaction is processed on another website. Payment gateway API allows businesses to accept payment from customers on-site, unlike hosted checkout pages. This reduces the probability of shopping cart abandonment.

Payment API Flexibility

Payment API flexibility provides businesses enhance security and convenience in the payment for all the stakeholders through customized options. For instance, a payment API flexibility will enable a business that has operations in multiple countries to process payments in multiple currencies. It would support and accept payments across different devices the business’ customers use.

Payment APIs have made life easier for people to process their payments across the globe. The payment APIs have reduced the cross-border transaction hurdles making it easier for users to shop online anywhere in the world.

Payment APIs have also enabled entrepreneurs to introduce their business plans easily in the digital sphere and take them globally in just a few simple steps. The payment API has also facilitated freelancers across the world to work on different projects. It has also made remote working between companies and freelancers feasible as payments are easily processed across several platforms.

Top Features to ensure a Flexible Payment Gateway API

To acquire and ensure maximum advantages for you and your clients, the developers must consider their points of view regarding the incorporation of the cross-border payment API. It can give an upgraded client experience, smooth out tasks, and further develop security — the rundown goes on.

However, the act of choosing the best option for a business and understanding the API adaptability is tricky, and at times, overpowering. In this way, we’ve assembled several key elements that developers ought to search for in an adaptable installment passage programming interface to guarantee consistent integration.

Documentation

Beginning with the nuts and bolts, documentation is your fundamental device for executing a programming interface and will hence decide the nature of your combined experience. While assessing installment APIs, begin by investigating their documentation. Is it both clear and brief? Does it incorporate example code and instructional exercises? Is it organized in a manner that is not difficult to explore? Ensure you have positive responses to this large number of inquiries before pushing ahead.

UI/UX

The design of the payment gateway is another important aspect to consider. The idea is to showcase the expert vision of the developer and designers, keeping in mind the customer’s needs. The design of the payment gateway should have basic technical functionalities that can bring ease to customers’ overall experience. Design should also incorporate modern elements that add to the accessibility and usability of the payment gateway.

User-friendly Interface

A friendly user interface is a keystone. Linking back to the previous point, usability is something that we need to stress on. If the integration process is long and complex, customers will not be using it since it is a huge waste of time and money as well. APIs that are simple, efficient, and effective are the best ones to implement since they will ultimately provide a better user experience. Along with usability, the ability to send error messages is also an important part of a good API. Cross-border payment API should be consistent and straightforward.

Test Setting

Test settings are extremely important. API integrations go through a rigorous testing process based on clients’ preferences. Testing allows everything to be smooth and a sandbox enables proper experimentation based on dummy data.

Security

Guaranteed security is of utmost importance for every flexible payment gateway API to be a success. Every API is expected to outweigh the risks of data and privacy breaches but at the same time, it must ensure all security protocols. Security of the payment gateway is improved through P2PE (point-to-point encryption) and tokenization.

Using these protocols, payment transactions are secure throughout their lifecycle. When you choose a cross-border payment API provider, make sure that the security solution provided is PCI-validated. This means that is a guarantee of data compliance and data security.

Omnichannel Competencies

When making a purchase or payment, customers should get the maximum number of choices they can choose from according to their convenience. This goes to show that the business is going the extra mile to provide ease of payment to customers. Having an omnichannel arrangement will allow a business to do just that.

When you’re on the lookout for the best API interface, omnichannel competencies should not be missed out on. Whether it’s through a retail location, versatile, on the web, or ACH, omnichannel will improve customer satisfaction and sales.

Customer Loyalty

A payment API also helps businesses to build customer loyalty as the entire payment process is on a single platform in just a few simple steps. Ease of payment allows businesses to improve their sales as customers can make payments for their goods instantly from anywhere. This improves client retention as well. Since the entire process is automated, there are very few maintenance costs at the business end.

Moreover, the payment gateway records all the transactions on the platform for all stakeholders, which means that people have greater accessibility to their financial transactions with a particular business.

Functionalities

There are certain functionalities that a good payment API should be equipped with. Error handling and data validation are such functionalities that are crucial for superior customer experience. Tokenization is used by most developers to secure the transaction process. Advanced payment features should be included in the API such as providing options to refund customers or automate recurring payments. All in all, you need to ensure any functionality that can prove to be essential for customers should be included.

Integration with Multiple Gateways

Payment gateway APIs often need to connect with multiple gateways to go through the transaction process. Recently, this has been more common and developers should make sure that the payment gateway API supports integration with multiple gateways.

API flexibility can come in handy in this situation as well. If customers are looking to enter a new market, however, their payment provider is unable to accept payments, you need a flexible payment API that can is authorized to accept payments in the desired market.

Customer Support

Customer support is the backbone of any business. Without proper support, customers will be lost with no one to help them with their queries or concerns. Payment API also needs proper support in place to deal with any issues that may arise. Having dedicated support from the payment API provider will allow customers to feel confident during the development process. Businesses get a good integration experience as a result.

Third-party API Partners

Third-party APIs are required in many industries. If you’re able to provide the solution for their pain points, you will be growing your customer base in no time. A known example of this is if a business has clients in different areas and the transaction for the goods and services are happening in different places. The payment gateway API should be able to process each transaction individually and directly with the clients or in some cases, the service providers. If everything goes as per the agreement, your merchant partner and the customers will experience a seamless and user-friendly payment process.

The Perfect API Solution

The primary objective of any digital platform is to provide a user-friendly experience to the users. The payment gateway is another important development in the world of information technology, which has facilitated people with a universal payment method. If you’re looking for a convenient, effective, and user-friendly payment API, IntaSend can help you achieve your payment goals.


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