Rapid digital transformation across the retail, banking and fintech industries brought about a tremendous shift in how online businesses conduct their transactions.

Changing consumer demands, together with the pressure to reduce costs and increase efficiency, lead online businesses to increasingly demand up-to-date technical payment integrations and protocols, with most legacy banks, unfortunately, lacking the necessary modern technical infrastructure to be able to deliver such solutions.

Application Programming Interfaces (APIs) have opened new doors for transactional banking. Namely, two platforms which would have otherwise been incompatible – due to different programming languages, functions, or other features – can now be bridged with an API integration.

APIs practically function as bridges, enabling communication between different platforms, along with the performance of tasks. When it comes to online businesses, in a globalised economy, merchants need to manage diverse pools of liquidity when processing cross-border payments and APIs are used to enable businesses to easily aggregate the data they need to finalise these cross-border transactions instantly and in one place. Thanks to APIs, online businesses today can connect and fulfil these complex tasks seamlessly and in real-time.

To get a better knowledge of the topic, we interviewed Christos Alatzidis, co-founder and Chief Technology Officer at Klarpay AG, who gave us an insight into how APIs are used to transform traditional banking.

Christos Alatzidis, co-founder and Chief Technology Officer at Klarpay AG

Why Use APIs in Global Banking?

Today, digital businesses are in need of immediate cross-border payment processing, quick access to their transactions, and frictionless transfer of funds. To be able to provide these elements, APIs have entered the stage of global banking.

The current systems in traditional banking cannot compete with the rapid growth and needs of consumers and merchants, as well as provide all of these mentioned features in a secure way. That is why fintech companies utilise APIs as a more modern, low-cost solution that would enable the shift from the traditional system to digital banking. By enabling easier access to customer data, APIs also allow consumers to have a better overall experience when it comes to transactions.

What are the Advantages of Using APIs?

Coming from a technological, entrepreneurial background, the main benefit of APIs is the elimination of complex and redundant processes. Fintechs and in general tech-oriented companies tend to strive for automation, as it is a crucial part of growing and sustaining a business model.

APIs act as the bridge between apps; they allow direct communication, leaving all needless cycles aside. Third parties that provide financial services can also ease and speed up their work by not having to depend on heavy verification procedures and relying on the KYC method provided by the bank. What’s more, APIs can allow for a different and effortless method of app creation, facilitating the end-user experience. In fact, as they are easily adaptable to new computing changes, they’re perfect for the fast-changing transactional banking world, allowing flawless data communication.

Finally, despite being seen as susceptible to breaches, APIs allow for better security. Their open architecture can ease the process of monitoring tasks, thus allowing quicker and simpler management as necessary.

How Has the Payment API Benefited Klarpay?

Klarpay’s payment API allows businesses to automate and manage their transactions as well as save time without human intervention, all centered around creating a seamless user experience. It essentially enables entities like fintech companies, marketplaces, media companies, merchants etc., to instruct single or bulk payments, as well as access reports and updates on their expenses and accounts.

Klarpay’s API allows for faster and more secure transactions, which inadvertently results in lower costs for the services. As a two-way benefit, Klarpay’s API gives merchants a chance to conduct transactions regardless of any possible issues that may arise, such as traffic spikes. At the same time, it enables our team to focus on additional tasks and projects that can help improve the efficiency of our products and the overall service.

In short, Klarpay’s payments API is designed to seamlessly integrate into any e-commerce system, making it easy to pay employees, suppliers, and customers.

How Does Klarpay Plan to Keep up With the Pace of Innovation?

With the financial world constantly moving forward, consumers need new ways to pay online while businesses look for innovative solutions to expand their business. Klarpay aims to bridge the gap between online companies and traditional brick-and-mortar financial institutions.

To do that, the first step is expanding the partner network, payment methods and corridors, including DLT payments. Crypto has been a rising trend in every segment of the digital world, as it’s often lower-cost, frictionless, and faster. For merchants, this is a very attractive proposition, and Klarpay holds a significant advantage, as Switzerland is one of the few countries where the conversion of crypto asset transactions enjoys a clear and legal framework. This also implies creating a resilient and dynamic environment in which Klarpay can easily adapt to new paytech changes.

Understanding the client’s needs is the backbone of any successful business, and Klarpay will continue to grow and provide new integrations, using data to create more personalised services that would benefit all merchant clients.