Cross-border application programming interfaces (APIs) connect businesses to the right payment gateways, banks, and financial networks so they can accept payments from customers around the world. These APIs provide a single interface for handling global payments, rather than requiring businesses to establish different payment methods and currencies for every region. This makes it easier for businesses to expand globally and accept payments in different currencies.

APIs that enable cross-border payments are becoming increasingly important, as cross-border transactions are expected to account for 33% of global e-commerce spending by 2028. Below, we’ll explain how global payment APIs work, what benefits businesses can expect from using them, and how to overcome common challenges when working with these software interfaces.

What's in this article?

• How do cross-border APIs work?
  
• Types of cross-border payment APIs
  
• What are the benefits of using a cross-border payment API?
  
• Challenges in implementing cross-border payment APIs and how to overcome them
  
• How Stripe Payments can help
  
• FAQs about cross-border payment APIs
  

How do cross-border payment APIs work?

Cross-border payment APIs facilitate transactions across different currencies, payment methods, and countries by acting as intermediaries between businesses and financial entities. They provide a unified interface that enables businesses to accept and process international payments without needing to integrate with multiple local payment processors or banks. Here's how it works:

• Businesses integrate a cross-border payment API into their websites, apps, or point of sale systems. They usually do this using software development kits (SDKs) or direct API calls that allow the business's system to communicate with the payment gateway.

• When a customer initiates a transaction by entering their card details or selecting a digital wallet, the API collects payment data, including amount, currency, customer information, and payment method details.

• The API encrypts and often tokenises payment information for security and compliance with regulations such as the Payment Card Industry Data Security Standards. Tokenisation replaces sensitive data with a unique identifier (i.e., token) that cannot be used outside the context of that specific transaction.

• The cross-border payment API determines the optimal routing for the transaction and sends the payment data to the appropriate payment gateway based on factors such as the customer's location, preferred payment method, and currency.

• The API handles different cross-border payment concerns such as currency conversion, foreign exchange (FX) rates, and compliance with local regulations. Many cross-border payment APIs offer dynamic currency conversion, which allows the customer to pay in their home currency when making a purchase in a foreign country.

• The payment gateway forwards the transaction request to the acquiring bank, which communicates with the card network (e.g., Visa, Mastercard) or an alternative payment method provider (e.g., PayPal, Apple Pay). The network contacts the customer's issuing bank to authorise or decline the transaction based on factors such as available funds and fraud checks.

• The issuing bank sends its response (either an approval or decline) through the payment network back to the acquiring bank. The acquiring bank communicates the status to the payment gateway, which alerts the cross-border payment API. The API informs the business's system, and the customer receives a confirmation or error message, typically in real time.

• Funds move from the customer's bank to the business's account, minus any fees. Cross-border payment APIs usually handle settlements in multiple currencies and provide reconciliation reports to help businesses manage their finances.

Types of cross-border payment APIs

There are several types of cross-border payment APIs, and each caters to different business needs in processing international transactions. Here are the main types of cross-border payment APIs.

Payment gateway APIs

Payment gateway APIs facilitate the acceptance of different payment methods, including credit and debit cards, digital wallets, bank transfers, and local payment methods. They provide a unified interface through which businesses can process payments across different countries. Stripe is an example of a payment gateway API.

Main features:

• Multicurrency support

• Local payment methods (e.g., iDEAL | Wero in the Netherlands, Alipay in China)

• Payment tokenisation and encryption

• Real-time transaction status updates

Card payment APIs

Card payment APIs focus specifically on processing international card payments (e.g., credit, debit, prepaid). These APIs often provide additional features such as saved card support, recurring payments, and chargeback management. Visa Cybersource, Mastercard Gateway, and American Express Payment Gateway are all examples of card payments APIs.

Main features:

• Advanced fraud detection tools

• 3D Secure authentication

• Recurring billing and subscription management

• Multicurrency processing and dynamic currency conversion

Digital wallet APIs

Digital wallet APIs enable integration with popular digital wallets and allow customers to pay through platforms such as Apple Pay, Google Pay, and Samsung Pay. Apple Pay API, Google Pay API, and PayPal API are all examples of digital wallet APIs.

Main features:

• Quick, secure checkout process

• Biometric authentication (e.g., Face ID, Touch ID)

• Support for in-app, web, and point of sale payments

• Integration with loyalty programmes and rewards

Bank transfer APIs

Bank transfer APIs facilitate direct bank-to-bank transfers. These can be necessary for businesses that handle large transactions or those that prefer alternatives to card payments. SWIFT API, Wise API, and Single Euro Payments Area (SEPA) API are examples of bank transfer APIs.

Main features:

• Support for Automated Clearing House (ACH), SEPA, and other regional bank transfer systems

• Currency conversion and international remittances

• Real-time transaction status and settlement updates

• Low fees compared to those of traditional wire transfers

FX and currency conversion APIs

FX and currency conversion APIs provide real-time currency conversion rates and handle FX operations. They allow businesses to present prices in local currencies and settle in their preferred currencies. XE Currency API, Open Exchange Rates API, and OANDA API are all examples of FX and currency conversion APIs.

Main features:

• Real-time FX rate data and historical data access

• Multicurrency pricing and conversion

• Risk management tools for FX rate fluctuations

• Integration with cross-border payment gateways for end-to-end processing

Fraud prevention and risk management APIs

Fraud prevention and risk management APIs focus on detecting and preventing fraudulent transactions through machine learning algorithms, rule-based filters, and real-time monitoring. Signifyd API, Riskified API, and Sift API are all examples of fraud prevention and risk management APIs.

Main features:

• Machine learning models for fraud detection

• Real-time transaction scoring and alerts

• Chargeback management and prevention tools

• Integration with cross-border payment gateways for comprehensive protection

Recurring billing and subscription management APIs

Recurring billing and subscription management APIs manage recurring payments for subscription-based businesses. These APIs handle automated billing, subscription lifecycle management, and invoicing. Stripe Billing API is one example of this kind of API.

Main features:

• Subscription plan creation and management

• Dunning management for failed payments (i.e., prompting customers to update their payment methods)

• Proration and usage-based billing

• Multicurrency support and invoicing

Payout APIs

Payout APIs enable businesses to send payments to users, suppliers, or partners across the globe. Gig economy platforms, marketplaces, and affiliate programmes often use these APIs. Stripe Connect API is one example of this kind of API.

Main features:

• Multicurrency payout support

• Bulk payments and mass disbursements

• Support for bank transfers, digital wallets, and card payouts

• Compliance with local payout regulations

Local payment method APIs

Local payment method APIs provide access to region-specific payment methods that are not universally available and help companies cater to local customer preferences. WeChat Pay API, Alipay API, and LINE Pay API are all examples of local payment method APIs.

Main features:

• Support for country-specific payment methods

• Local currency support and settlement

• Integration with cross-border payment platforms for broader reach

• Localisation options for payment pages

Blockchain and cryptocurrency payment APIs

Blockchain and cryptocurrency payment APIs help businesses accept cryptocurrencies such as Bitcoin, Ethereum, and stablecoins. These APIs provide options for instant conversion to fiat currencies and help businesses avoid volatility risks. Coinbase Commerce API, BitPay API, and CoinGate API are all examples of blockchain and cryptocurrency APIs.

Main features:

• Support for multiple cryptocurrencies

• Instant currency conversion and settlement

• Built-in wallet services and custody solutions

• Improved security features including multisignature and two-factor authentication

Embedded finance APIs

Embedded finance APIs allow businesses to integrate financial services directly into their platforms and offer options such as buy now pay later (BNPL), instalment payments, and credit underwriting. Klarna API, Affirm API, and Afterpay API are all examples of embedded finance APIs.

Main features:

• Simple integration of financial products

• Credit risk assessment and underwriting tools

• Flexible repayment options for customers

What are the benefits of using a cross-border payment API?

Cross-border payment APIs simplify payment processing for businesses that sell to international customers. Here are the benefits of these software interfaces:

• Easier integration: Cross-border payment APIs provide a single platform for handling payments across different countries and currencies. This saves developers time and effort.

• More payment options: Cross-border payment APIs enable a wide range of payment methods, including credit cards, digital wallets such as Apple Pay and Google Pay, bank transfers, and even local options specific to each market. This variety can help boost sales and reduce cart abandonment by prioritising local payment preferences. Stripe supports more than 135 currencies and numerous local payment methods such as iDEAL | Wero in the Netherlands and Alipay in China.

• Support for multiple currencies: These APIs make it easy to manage transactions in different currencies and some even offer dynamic currency conversion. That means you can show prices in local currencies, which gives your customers a more familiar shopping experience and helps your business tap into new markets. Stripe’s API has an automatic currency conversion feature, which is ideal for providing a more personalised shopping experience.

• Built-in security and fraud protection: Cross-border payment APIs use strong fraud detection, tokenisation, and encryption to protect from fraud and ensure compliance with standards such as PCI DSS and the revised Payment Services Directive (PSD2). Stripe Radar is a fraud prevention tool that uses machine learning to analyse billions of data points and prevent fraudulent transactions in real time.

• Scalability: Cross-border payment APIs can scale with your business as it grows and expands into new regions. They support payments in multiple countries, so you don’t have to build a new payment setup every time you enter a new market. Stripe’s platform supports global growth with features such as local acquiring, which can improve acceptance rates, and Stripe Connect, which simplifies payouts and compliance for marketplaces and platforms as they expand internationally.

• Better cash flow and faster payouts: Some global payment APIs have faster settlement cycles and direct payouts in local currencies that can help you get your money faster. Stripe has features such as Instant Payouts in certain countries; this feature enables you to access your funds immediately rather than wait for the usual settlement period.

• Regulatory assistance: Cross-border payment APIs can help you comply with different regional laws and regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Stripe’s API has tools such as automated tax calculation and support for Strong Customer Authentication (SCA).

• Reporting and analytics: These APIs can offer valuable insight into your transactions, customer behaviour, and payment trends. You can use this data to help fine-tune your payment processes, improve customer experiences, and make smarter business decisions. Stripe has a Dashboard with detailed reporting and analytics features, as well as an API to pull transaction data into your own analytics tools. This gives you the ability to closely monitor and refine your payments strategy.

• Lower operational costs: Cross-border payment APIs can reduce costs by consolidating all your payment needs into one platform and simplifying tasks such as reconciliation and accounting. This gives your team more time to focus on growth. Stripe has automatic reconciliation tools and consolidated financial reporting, which can reduce the manual work involved in managing payments and help your business simplify its operations and cut costs.

Challenges in implementing cross-border payment APIs and how to overcome them

Here are some common challenges of using cross-border payment APIs and some solutions to overcome them.

Integration

Businesses might struggle with integrating cross-border payment APIs with their existing systems. This can be especially difficult when the cross-border payment API needs to support different payment methods and currencies. Using a provider with solid documentation, easy-to-use SDKs, and prebuilt user interface components can help. Stripe, for instance, has well-documented guides and libraries in multiple programming languages.

Regulatory compliance

Companies can find it challenging to manage the compliance requirements of each region they operate in. APIs with built-in compliance features, such as automated tax calculation and tools for SCA, can help.

Fraud

APIs with built-in fraud detection tools, such as Stripe Radar, can help businesses protect themselves from global security threats. Stripe Radar uses machine learning to spot and stop suspicious behaviour. Businesses should also keep security protocols up-to-date and use tokenisation to protect sensitive data.

Currencies and payment methods

Businesses can struggle with handling different currencies and regional payment methods. APIs that automatically convert currencies and provide support for local payment methods can help. Stripe, for example, handles currency conversion and exchange rates.

Transaction costs and payout delays

Cross-border transactions can be expensive, and waiting for payments to settle can complicate cash flow. Choosing a payment provider with competitive fees and faster payouts can help. Stripe offers local acquiring in several regions, which helps lower costs and speed up how quickly businesses get their money.

Customer experience

Companies can struggle to offer a localised experience for each market they operate in. APIs with customisation features allow businesses to cater to local languages, currencies, and popular payment methods.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments or get started today.

FAQs about cross-border payment APIs

Here are answers to some common questions about evaluating and implementing cross-border payment APIs.