What is an API? How is it important for modern businesses?

API is a technology that plays a crucial role in the world of online business. It not only facilitates payments but also enhances the security of transactions. However, API programs are widely used by software developers, while many business owners or online sellers are often unfamiliar with such systems and how they relate to their businesses. This article will help everyone learn more about what an API is and why this program is essential for online transactions in the digital age.

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Article Table of Contents

•   What is an API? Why new generation entrepreneurs should understand it
•   How many types of APIs are there, and which business types are they suitable for?
•   What are the characteristics of an API?
•   How does API benefit businesses?
•   Examples of API usage in business
•   KGP: Convenient and secure payment acceptance services in API format
•   API: A key mechanism that helps businesses connect multiple systems easily and drive efficiently

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What is an API? Why new generation entrepreneurs should understand it

API stands for Application Programming Interface. It is a connection part for applications, acting as an intermediary between client programs and service provider programs. Developers do not need to build the entire system from scratch. For example, a taxi-hailing application connects to external programs like Google Maps, allowing users to pinpoint their location and plan routes in real-time. These functions are not built entirely from scratch but use APIs to access reliable external services. Currently, APIs play a significant role in business because they help businesses accelerate innovation, reduce IT costs, and effectively increase competitiveness.

When it comes to API systems that play a crucial role in online transaction processes that businesses should not overlook, API Payment Gateway is one of them. Payment Gateway is an online payment system that connects to various E-Commerce platforms such as Mobile Banking, credit cards, or debit cards. In many cases, online selling platforms or chat channels may not have built-in payment acceptance functions, forcing customers to switch to banking apps to transfer money and complete transactions. This leads to a lack of continuity and increases the risk of losing sales opportunities. Implementing an API Payment Gateway can integrate various payment channels into a single system, eliminating the need for businesses to develop and connect multiple separate systems. This reduces costs, simplifies the system, and allows for agile service expansion in a highly competitive digital world.

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How many types of APIs are there, and which business types are they suitable for?

An API (Application Programming Interface) is an intermediary that allows different software to communicate and exchange data. APIs come in various types or architectural styles, each with distinct strengths and advantages. Choosing the appropriate architecture helps businesses develop systems efficiently. The two most well-known and widely used architectures are:

•   REST (Representational State Transfer) is currently the most popular architectural style. It operates on the HTTP protocol and often uses JSON or XML data formats for data transmission. REST is highly flexible and easy to use, making it suitable for systems requiring rapid development, such as general websites or mobile applications.
•   SOAP (Simple Object Access Protocol) is a protocol with a more defined and stricter structure and standards than REST. It always uses XML for data transmission and comes with built-in security standards, such as WS-Security, which supports authentication and data encryption. Therefore, it is suitable for large organizations that require the highest security and reliability in transactions, such as banking systems or systems connected to government agencies.

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What are the characteristics of an API?

Both types of APIs mentioned above connect service providers with service users through different languages. In addition to categorizing APIs by the language used for data transfer, APIs are also categorized by their development characteristics, as follows:

Internal API

APIs developed by an organization for internal communication within the organization, with restricted access to maintain user security. In some cases, developers adapt public APIs into internal APIs to meet the specific needs of certain user groups.

Composite API

This API combines other types of APIs, which may include internal APIs with public APIs, to provide users with a comprehensive and convenient experience. For example, various transportation system applications often integrate many APIs into their platform, such as weather forecast APIs, traffic condition APIs, and map system APIs, etc.

Partner API

APIs provided between partners for exchanging business data. For example, E-Commerce applications integrate their partners' online payment systems into their own applications. This payment system acts as a Partner API for the E-Commerce application, allowing users to not only shop but also make payments instantly.

Open API

This API allows external developers to use it for free. Sometimes, Public APIs are further developed into internal APIs or Partner APIs.

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How does API benefit businesses?

API is a crucial technology that connects client programs and service providers, making various systems more complete and providing numerous benefits to businesses, as detailed below:

•   Reduced business operating costs: When developing an application, it consists of a core system and supplementary systems. If developers have to develop supplementary systems as well, such as an ERP system or a payment system, it will be very time-consuming and costly. Businesses can connect existing API systems to their own programs, which will reduce the burden of development, lower resource costs, and accelerate time-to-market.
•   Enhanced user convenience: API systems connect various programs, providing users with greater convenience, such as real-time data access and notifications for new messages.

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Examples of API usage in business

Currently, APIs have become essential tools that enable businesses across various industries to work efficiently with external systems. Some organizations choose to develop their own APIs to manage specialized systems, while many others opt to connect with APIs from partners or external technology providers to accelerate system implementation without investing in full development themselves. Examples of API usage in business include:

•   E-Commerce businesses: This is one of the businesses that heavily uses APIs because, in addition to having their own backend system, there are other API systems that help users manage online transactions more conveniently, such as various payment systems, inventory management systems, and even shipping tracking systems.
•   Banking businesses: In the era of a cashless society, API Banking has become increasingly popular. API Banking plays a role in reducing operating costs and enabling real-time payment systems, as well as securing customer data.
•   Social media businesses: These businesses connect numerous APIs, such as Facebook Insight, which can pull backend data from Facebook pages to analyze follower activity, or Meta Pay, a payment system within Messenger chats that allows customers to pay instantly without having to switch to a banking app.

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KGP: Convenient and secure payment acceptance services in API format

Business owners who sell through Facebook pages understand well that when customers want to pay, they have to leave the chat and switch to a banking app, which is very time-consuming. If there was an API that allowed customers to make payments instantly through Facebook Messenger chat, it would greatly facilitate customers and increase sales opportunities. For this reason, KGP has developed a payment acceptance service, the Meta Pay system, which allows customers to pay through various channels from Facebook Messenger chat and comes with superior security. Before use, users must verify their identity through a standard international authentication system.

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API: A key mechanism that helps businesses connect multiple systems easily and drive efficiently

APIs have become crucial to almost every aspect of online business, serving to connect various systems. This allows businesses to reduce unnecessary costs and increase organizational management efficiency. Additionally, a large number of API developers have emerged today, and online sellers can leverage these API systems in their businesses to gain a competitive advantage.

KGP Payment Gateway Thailand, an online payment service provider, enhances your business's convenience with a Single API that connects once and supports multiple payment channels.

This solution not only reduces the complexity and time in system development but also helps your business quickly enable new payment channels to always meet evolving market demands and customer behaviors.

KGP, Payment. Make It Smooth

FB : kgpthailand

LinkedIn : Kasikorn Global Payment

www.kasikornglobalpayment.com

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References

What is API? Why is it important for online marketing? (2021, November 11). KATALYST KASIKORN. https://katalyst.kasikornbank.com/th/blog/Pages/what-is-api-and-why-is-it-important.html

K API. (n.d.). Kasikornbank. https://apiportal.kasikornbank.com/product/public/All/KGP%20Merchant%20Payment%20Platform/Documentation/%
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