Klarpay’s CTO, on how payment APIs have transformed transaction banking services

Rapid digital transformation across the retail, banking and fintech industries has led to a massive shift in how online businesses conduct their transactions.

Changing consumer demands, together with the pressure to reduce costs and increase efficiency, means that online businesses are increasingly demanding updated technical payment integrations and protocols, with most legacy banks unfortunately lacking the necessary modern technical infrastructure to deliver such solutions.

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

APIs practically act as bridges, enabling communication between different platforms, along with the execution of tasks. When it comes to online businesses, in a globalized economy, merchants must manage different pools of liquidity when processing cross-border payments, and APIs are used to make it easy for businesses to gather the data they need to complete these cross-border transactions instantly and in a place. Thanks to APIs, online businesses today can connect and perform these complex tasks seamlessly and in real time.

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

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

Why use APIs in Global Banking?

Today, digital businesses need instant cross-border payment processing, fast access to their transactions and frictionless transfer of funds. In order to provide these elements, APIs have entered the scene of global banking.

Today’s systems in traditional banking cannot compete with the rapid growth and needs of consumers and merchants, as well as offer all these aforementioned functions in a secure manner. That is why fintech companies are using APIs as a more modern, affordable solution that will enable the transition 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 benefits of using APIs?

With a technological, entrepreneurial background, the main benefit of APIs is the elimination of complex and redundant processes. Fintechs and technology-oriented companies in general 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, setting aside all unnecessary cycles. Third parties providing financial services can also facilitate and speed up their work by not relying on heavy verification procedures and relying on the KYC method provided by the bank. Also, APIs can allow a different and effortless method of app creation, facilitating the end-user experience. In fact, as they can easily adapt to new data changes, they are perfect for the fast-changing world of transactional banking, allowing flawless data communication.

Finally, despite being seen as vulnerable to breaches, APIs provide better security. Their open architecture can facilitate the process of monitoring tasks, thus allowing faster and easier administration as needed.

How has the Payment API benefited Klarpay?

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

In short, Klarpay’s payment 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 world of finance constantly moving forward, consumers need new ways to pay online while businesses look for innovative solutions to grow their business. Klarpay aims to build a bridge between online companies and traditional physical financial institutions.

To do so, the first step is to expand the partner network, payment methods and corridors, including DLT payments. Crypto has been a rising trend in all segments of the digital world, as it is often cheaper, frictionless and faster. For merchants, this is a very attractive proposition, and Klarpay has a significant advantage, as Switzerland is one of the few countries where the conversion of crypto-asset transactions has a clear and legal framework. This also means creating a resilient and dynamic environment where Klarpay can easily adapt to new payment technology changes.

Understanding customer needs is the backbone of any successful business, and Klarpay will continue to grow and offer new integrations, using data to create more personalized services that will benefit all merchant customers.