The 5 Most Useful APIs in the Financial World

The 5 Most Useful APIs in the Financial World
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There are hundreds of APIs that are used in the financial world today, with more to come every year. It's next to impossible to find the best ones - the best are those, which suit your needs best - but it's much easier to pick the useful pieces of code. Let's say that the five below represent the most popular and utile APIs you can find among startups and mature institutions in the fintech industry.


The widely known and most popular payment provider would probably be PayPal, but it is Stripe, which gained much hype lately. Stripe's API drives payments for such big Internet players as Kickstarter, Twitter, Pinterest, Lyft, Reddit, Wired, TED or Alipay. Its solutions were also chosen by Apple for the Apple Pay system.

Stripe was founded in 2009 by the Collison brothers. The company offers processing services for online and mobile transactions and provides well-designed code, which from the start was very secure (no payer details are stored on the seller's servers) and easy to deploy (developers can quickly incorporate payment features into their apps or websites without having to register and maintain a merchant account).

One of the main advantages of Stripe was - and still is - a very clear and comprehensive pricing plan with a flat rate for processing the payments. On the other hand, most complaints regarded a long, seven-day waiting period for transactions, during which time the company would check the parties involved to protect against potential fraud, and then would transfer the funds directly into the bank account linked to the payee. Fortunately, this period was shortened to two days.

Do we need a bank or other institution to get a loan? No, we don't - especially when there is none around. Yet, we can lend the money directly from people who have some. And this is exactly what Kiva and its API does: as the world's first peer-to-peer micro-lending website it allows lenders to lend directly to unique entrepreneurs in the developing world, where the financial system is scarce.

Kiva is a nonprofit organization that relies on a network of microfinance institutions on five continents in order to provide small loans to people who do not have access to traditional banking systems. One hundred percent of a granted loan is sent to these microfinance institutions, which are called Field Partners - they administer the loans in the field. Then, there are over 450 volunteers, who work with the Field Partners, edit and translate borrower stories, and ensure the smooth operation of other Kiva programs. Kiva does not take a cut, neither does it charge any interest to the Field Partners.

The average loan size is $415.86, and the repayment rate is as high as 98.71%.

There are plenty of payment providers and their APIs on the market, like Stripe described earlier. But one of the hottest British startups, GoCardless, is a bit different from them: it's an online direct debit provider. Using GoCardless' API, any business or individual can take debit payments, avoiding credit card fees or the need of having a merchant account.

The idea of this startup founded in early 2011 is simple: to make the chore of setting up direct debit payments as easy as pie. When you want to receive recurring payments such as monthly subscription fees, you can either rely on your client's memory to send you a transfer in a timely manner, or be paid with cash/credit card every month. And direct debits, which charge the payer's account automatically on behalf of the payee, take time and effort to fill out, and send the consent forms.

GoCardless is a middleman, which does all the job of verifying the payers' data in their banks and setting up direct debit payments - recurring and one-time - on their accounts. When you pay with GoCardless for the first time, you have to enter all your personal information necessary to authorize the payment in your bank, but you automatically receive an account in the system, so you won't need to provide the same data again at another merchant supported by GoCardless. The company provides the infrastructure for these direct payments and earns a one percent cut from the transactions.

GoCardless operates mainly in the UK and Eurozone. Its biggest competitor, Dwolla, which helps to send and receive funds between people directly from their bank accounts, is still limited to the US. It will be interesting to see the two competing on their own markets.

It's almost certain you've heard of NFC and making payments using mobile devices equipped with this technology. And you probably know that until now these solutions had limitations, which halted their widespread adoption: mostly because they relied on partnerships between mobile carriers and banks. When you wanted to use an NFC wallet in your smartphone, you had to subscribe for a plan from a certain operator who had a deal with your bank - or vice versa. In other words, a specific banking app was bound to a specific carrier's SIM card.

Then, the two SimplyTapp founders came with an idea of Host Card Emulation (HCE) - the future of mobile NFC payments. Thanks to this technology, anyone can develop a mobile application that can be used as a smart card. HCE creates secure, identical card representation on a mobile device for the purposes of payments, transit and access.

In 2014, the company opened its APIs to card issuers and app providers with a developer platform that could make it cheaper and easier to include digital cards in mobile apps. SimplyTapp's APIs are available to developers for running HCE pilots or full-blown programs in accordance with Visa/MasterCard guidelines. The Admin APIs can be used by the user to create new users, wallets and individual cards. By providing open and secure APIs, SimplyTapp allows developers and users to include HCE payments in their applications.

A banking API doesn't have to be limited to banks only. The solution provided by Kontomatik can be used in a variety of scenarios: for finding better deals on the financial market, user authentication, credit scoring, contextual offers, enabling new services in startup apps.

First of all, the Kontomatik banking API collects data from a customer's bank account - with his or her consent, of course. This information ranges from detailed personal information, through extensive financial data to transfer senders' and recipients' names. Huge amounts of data that can be processed in many ways in order to fulfill specific needs.

One of the simplest, but very robust and trusted applications, would be to use the Kontomatik banking API as an authentication tool: when a user logs on to his or her bank account, the institution gets an instant KYC with all the necessary personal data, along with the ID number already verified by the bank.

With your client's identity confirmed, you can go further and analyze his or her incomes and spending to get credit scoring and offer a loan within minutes, not hours. You can also offer a PFM tool, which could find better deposits or credit cards for your customer, and even suggest a cheaper or more flexible bank account.

If your company leverages big data processing, you can find consumer patterns related to a specific merchant, product, service, area, or other factor. The possibilities are limitless with such a small API and so much information available thanks to it.

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