In our previous article on virtual bank accounts, we described what they are, how they work, and what benefits they provide. Virtual accounts, like regular bank accounts, are used to facilitate operational transactions such as local and international collections.

In this article, we will highlight some of the ways fintechs and other platforms can make their payments system smoother with a Virtual Account API.

How APIs work In Virtual Banking

An API is a group of tools and programming codes used to build software and applications. An API queries data, parses responses and sends instructions between one software platform and another. APIs are used extensively in providing data services across a range of fields and contexts.

In the context of finance, API integration opens up a world of possibilities. They enable fintechs and other platforms to connect with consumers, transfer information and funds more quickly, and broaden the range of market-specific innovative services they can provide. Because they enable interoperability between fintech platforms and other platforms, APIs for the financial industry are one of the fastest-growing use cases for APIs.

With a virtual account API, financial institutions, fintechs, corporates and more can increase the reach and speed of transactions, therefore making operations more efficient (fast and less expensive).

Types of APIs In Virtual Banking

  • Private APIs: These are most commonly used in traditional banking. Private APIs enhance operational efficiency and are viewed as essential by a considerable number of banks.
  • Partner APIs are typically used when operations occur between a specific third-party partner and a bank. Partner APIs allow for expansion, especially in relation to new channels, products, etc.
  • Open APIs: The least commonly used type of API, this structure involves making business data available to third parties. In this case, banking institutions are often concerned with the security of data and other sensitive client information.

Understanding Virtual Bank Account API

Over the last few years, APIs have become particularly significant to banking institutions and fintech organizations. APIs provide better means to share data, integrate with systems, and personalise services, making financial services quick and efficient.

Virtual bank account APIs can be used to automate the process of issuing individual virtual accounts for easy payment collections.

Benefits Of APIs In Virtual Banking

With APIs in virtual banking, fintech platforms have more flexibility to provide the best features and tools to streamline financial services, thereby creating a surge of competition and innovation in fintech products. This has completely revolutionised traditional B2B transactions. Some of the key benefits of APIs in virtual banking includes:

  • Real-time capabilities that enable the end-user to get enhanced visibility of cash flow, cash position, and more, across currencies.
  • Reduction of administrative hurdles with regard to managing finances like applying for a business loan, checking your creditworthiness, etc.
  • Having a single view of all your finances while being able to control, track, and analyse all financial movements, all in one place.

Conclusion

APIs in virtual banking make payment processes more streamlined and efficient, whilst eliminating the time constraint and the administrative complexities of the traditional banking process.

The following are key takeaways from this piece:

  • An application programming interface (API) establishes an online connection between a data provider and an end-user.
  • The use of APIs in virtual banking increases the reach and speed of transactions.
  • APIs make virtual banking operations more efficient.
  • APIs in virtual banking create an opportunity for fintechs to innovate and improve upon existing traditional banking services.

Fincra's easy-to-integrate payment APIs with cross border capabilities eliminates the difficulties of traditional payment processing methods, allowing you to scale across multiple markets.

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