You've probably heard the term "API" at some point in your business journey, but may have brushed it off as something that applies only to tech gurus and programmers. In fact, APIs make important technology accessible to a wider audience and can impact many areas of a business – including the way retailers accept payments. As of 2025, API-related integrations now drive more than 40% of company revenues.

Here's how payment-specific APIs are changing the way that customers shop – and why you should familiarise yourself with them as your business grows.

What's in this article?

• What does "API" stand for?
  
• What is an API?
  
• What is a payment API?
  
• How do payment APIs work?
  
• How to integrate a payment API into a website
  
• Which types of businesses use payment APIs?
  
• How to choose a payment API
  
• How Stripe Payments can help
  

What does "API" stand for?

"API" stands for "application programming interface".

What is an API?

APIs exist as an interface, or intermediary, for two different pieces of software. They are an easy way for developers and site builders to use tech applications without needing to build the code themselves. By understanding which features are available as an API and implementing that API into an existing site or tech offering, developers can upgrade their work quickly and accurately, instead of starting from zero.

APIs let developers take advantage of features offered by brands or solutions they love, ensuring an easier integration and better results. (In many cases, developers still have to do their own customisations to make an API work for their particular product or service.) Additionally, API creators often provide support and education for developers, which helps ensure their API technology is used consistently across platforms and in the intended payment method.

APIs are considered to be very reliable. As of 2025, average API uptime was around 99.46%, representing a slight decrease because of AI traffic and added complexity.

What is a payment API?

Payment APIs help online retailers manage payments. They offer consistency, security and integration with a variety of online businesses. They also reduce the burden of meeting changing regulatory compliance rules.

Payment APIs may be offered by the payment processor or a payment gateway, but the goal is the same: to make it easier for businesses to collect payments and for customers to complete purchases. Payment integrations like credit card APIs also help meet some of the security measures that allow customers to feel safe when making an online purchase, while also protecting payment processors and card companies against errors that may occur when developers create their own payment solutions or when customers mistype their financial information. Global payment APIs facilitate transactions across different currencies, payment methods and countries.

A payment gateway API is responsible for securely capturing payment details and transmitting them to the payment processor for authorisation. It acts as the technical bridge between a customer's checkout experience and the broader payment infrastructure.

Some payment APIs are free to use, while some charge businesses per transaction or bill using a subscription model.

How do payment APIs work?

A payment API connects a retailer's website with the payment processor used at checkout. It offers a direct connection to the payment network, eliminating the need to re-create payment functionality. Offering both one-time and recurring payments, APIs make it easier for customers to complete purchases and for businesses to scale. Most payment APIs are highly customisable and can be used alongside payment APIs from other payment solutions and gateways.

Retailers using payment APIs receive automated support for payments. For example, payment APIs can automatically verify that a customer's payment information is valid and current and provide real-time data on transaction status and payment history. Additionally, APIs can help businesses meet PCI compliance by detecting and preventing fraudulent transactions through tokenised data and secure handling of sensitive information. This can help retailers streamline their payment processes, reduce errors and fraud and provide a better overall customer experience.

In addition to automated support, many payment APIs also offer customisable features that allow retailers to adapt their payment processing to their specific business needs, such as recurring billing or subscription payments. Payment APIs can also provide real-time reporting, which is useful in managing inventory and dealing with potentially fraudulent card payments.

Using payment APIs can be as simple as pasting in a snippet of code, which can be customised by use case without installing additional libraries of code or additional software components.

How to integrate a payment API into a website

Integrating a payment API typically involves creating an account with a payment provider, generating API keys, embedding checkout or payment code into your site and testing transactions before going live.

While the specific technical steps vary depending on your provider, the process generally follows a standardised path designed to balance ease of use with enterprise-grade security:

• Authentication via API keys: Once your account is active, your provider will issue unique secret keys. These keys act as a secure "handshake" between your website and the payment processor, ensuring that every transaction is authorised and linked to your specific merchant ID.

• Low-code vs. custom integration: Depending on your development resources, you can choose between prebuilt user interface components that require minimal coding or a custom-built API integration that offers total control over the checkout flow.

• Sandbox testing: Before handling real money, developers use a "sandbox," or test mode environment. This allows you to simulate various scenarios to ensure your site responds correctly without risking actual customer data or funds.

By moving through these stages, businesses can transition from a static website to a fully functional digital storefront in a matter of days rather than months.

Which types of businesses use payment APIs?

All types of businesses can use payment APIs. But APIs are traditionally used by online retailers, including businesses that sell everything from beauty products to gaming apps. Some brick-and-mortar businesses that collect payments online may also use payment APIs. It's becoming more common for individual business owners, such as freelancers and consultants, to include payment APIs on their web properties to help clients make payments easily.

Website companies often include payment APIs as an optional feature in their templates, so it's possible for a business or individual sole proprietor to use an API without realising it. Payment APIs give service providers – like website-hosting companies – an easy way to offer payment services, without having to spend resources developing their own solutions.

Generally, anyone who wants to accept online payments is a potential payment-API user. For small businesses, payment APIs reduce the need for custom development, provide built-in security and compliance and make it easier to scale payments as the business grows. E-commerce businesses typically look for payment APIs that support multiple payment types, international currencies, fraud protection and smooth checkout experiences. Other types of businesses might opt for specialised integrations, such as ACH payment APIs for payroll or payout purposes.

How to choose a payment API

There are many payment-API options to choose from. Doing your research can save you time and money, and ensure that you deploy an API that is compatible with the systems and technology that you're already using.

A solid payment API should offer the following:

• Ongoing technical support, including support staff, and well-written, frequently updated documentation and resource guides
  
• API client libraries, with cut-and-paste code in the most common programming languages, to help you start quickly without spending a lot of time learning how the code works
  
• Reliable uptime, so you don't have to worry about outages when you need payment services the most
  
• Reliable and relevant updates, when needed
  
• Secure credentialing through API keys, and other measures to protect access
  
• Testing opportunities, such as a sandbox, so you can try out an API before you commit to using it on your site
  
• Clear pricing structures, such as the typical per-transaction fees, which can vary based on payment method, region or volume
  

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.