Application Programming Interface, more commonly referred to as API, is set to change the way we make payments. These are a set of protocols used for constructing software applications which show data or services that can be utilised by other applications. They do the job of connecting content and data, services and business process with internal teams and channel partners efficiently and securely.

APIs have assumed importance in the light of customers demanding increasingly secure and intelligent digital payment services. The beauty of a partner API programme is that it opens up a secure link with partners, thereby opening up new business opportunities. Partner APIs for clients enable integration between the client’s internal systems with the backend system of the banks.

APIs are the moving force behind the change that is being currently witnessed in the payments industry. This is because of the many benefits they bring into the system; such as efficiency, speed, and flexibility. We discuss these benefits in detail below.

Speed and Customisability

Speed is a crucial aspect of digital payments. This is more so the case nowadays as the customers are demanding faster payment service products with reduced costs. Additionally, clients may have a wider business requirement, in which they might want to cover different end-users or even different regions.

Such complex and varied requirements demand customisation and flexibility. API-centric products have a clear distinction between their front and backends, thus allowing for greater customisation and accommodation of multiple services as well as reduced time to market.

Efficiency

Using API from the start for payment services increases efficiency in the development of the product. Usage of APIs also ensures that time and cost are saved. One way this is achieved is by simply adding or removing APIs to add new functions. Payment service products using API software are more stable with fewer bugs, thus providing better and more reliable performance in the critical world of digital payments.

Ecosystem

Partner payment products developed with APIs at their core have developers that continue to work on the core, which can lead to improvements in functionality. This is done with reduced development costs as the development work is centred on enhancing the core and not on developing newer features.

The team of developers working on the core create partnerships around the product, giving rise to an ecosystem. Thus, the API-based payment services can increase their functionality by tapping into this new ecosystem or network of developers.

RBL Bank in the API Space

Notably, RBL Bank is the first bank in the Indian banking industry to digitize the B2B supply chain with the launch of API banking services. This has allowed the bank’s banking systems to integrate with the ERP systems of corporate clients seamlessly and securely.

It has also helped the bank to embrace the concept of "Open Banking" and offer "Banking as a service" (BaaS), wherein any of its partners - FinTech companies, payment banks, payment companies and payment providers - can use its API infrastructure to provide banking services and other innovative products.

To further simplify and standardise intercommunication between processes, services and applications, RBL Bank has used ESB. Opened in 2014, today the bank’s API platform has 20+ partners.

In today’s economy, APIs are playing a major role, with an API-first approach being adopted by banks to meet customer’s changing needs and meeting regulatory directives. Their many benefits combined with the stability quotient are making them the go-to-choice for digital payment services.

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