# What is API?

Source: https://test-seo-payenteasy.pne.io/glossary/what-is-api

_Understand the definition of API and how they connect software systems. Discover their role in payments, integration benefits, and endpoints._

Table of contents

1. [What Does API Stand For?](#what-does-api-stand-for)
2. [What is a Payment API?](#what-is-a-payment-api)
3. [Types of APIs in the Payment Sector](#types-of-apis-in-the-payment-sector)
4. [What is Application Programming Interface Integration?](#what-is-application-programming-interface-integration)
5. [FAQ](#faq)

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An API definition is a set of protocols that act as a bridge between software systems, applications, or services and allow them to communicate with each other. API – is the description of interaction methods between instances. It's how modern cloud and web-based technologies exchange data and perform actions in a structured and documented way.

## What Does API Stand For?

An API meaning an Application Programming Interface. How does API work? This technology makes sure one application knows how to interact with others, including what kind of request it can send, what response it will get, how to deliver them between entities, and how to do it in a secure way. Particularly, API provides safe communication between servers and clients through a gateway.

## What is a Payment API?

A Payment API enables transactions to be processed seamlessly through websites, apps, or digital platforms, facilitating interactions among businesses, banks, and merchants. It operates behind the scenes, unlike manual systems or payment gateways that rely on redirection. It enables enterprises to:

- Initiate traditional payments and APMs
- Tokenize information
- Handle payment authorization and capture
- Process refunds
- Manage recurring charges
- Verify customer identity
- Operate with callbacks
- Get balances etc.

## Types of APIs in the Payment Sector

The payment industry relies on several Application Programming Interfaces to move data securely between systems like banks, apps, and online stores. Each type serves a unique role in how payment processes are initiated, handled, and confirmed.

### REST Application Programming Interfaces

REST stands for Representational State Transfer. It is a widely used method for data exchange between client and server in finance and other industries.

### SOAP Application Programming Interfaces

SOAP is a Simple Object Access Protocol known for strict XML formatting and high security. It is used in large financial institutions or enterprise systems where secure data management is a top priority.

### GraphQL Application Programming Interfaces

GraphQL stands for Graph Query Language. It is designed to let clients request exactly the data they need from an Application Programming Interface. Compared to REST, GraphQL is more efficient, as it returns all requested data after one query instead of multiple.

### Webhooks

Webhooks are not traditional APIs but serve as event-driven mechanisms that notify systems when something specific events occur. The most used application automates workflows and sends instant updates or messages to users without the need of polling.

## What is Application Programming Interface Integration?

API integration is the process of connecting software applications using API. For instance, linking a company’s internal software with external tools like payment gateways. This allows real-time data exchange, improves management, and reduces human error.

## Frequently Asked Questions

### What is an API endpoint?

An Application Programming Interface endpoint is a URL where an application can send requests to connect and communicate with another server or system. It provides structured and secured interactions between services.

### How does API documentation help in integration?

Documentation provides developers with the rules on how to make requests, handle responses, and manage security. It facilitates API integration, prevents miscommunicationand errors, and speeds up overall development.

### What are the costs associated with implementing a payment API?

Application Programming Interfaces come with various costs, such as setup fees, per-transaction charges, or monthly access. Payment platforms might also introduce security and management charges.

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