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The Payment API Guide For Small Businesses & Startups: The 7 Best Options & What To Look For

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If you do a lot of your selling online, you’ve probably run up against some of the limitations that come with using a prefabricated payment setup. The good news is that you can configure your payment processing infrastructure. If you’re a developer, or have access to developers, you can use a payment API to create your own custom credit card processing setup — assuming you work with the right payment services provider or gateway.

When you’re ready to dive into the world of credit card APIs, you’ll want to compare and contrast the developer tools provided by payment services providers. It’s important to evaluate them not only by the strength of their API, but also consider more mundane factors like how much they cost, the types of transactions they support, and how secure they are.

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Stripe sets out to be a one-stop shop for payment services. With global reach and robust developer support, it's a great option for businesses that don't already have a stable merchant account, especially those that want to do business globally.

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Businesses that want to take advantage of Square's broad-reaching infrastructure will appreciate the ability to customize the service's flagship features and integrate them into their own existing workflow.

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Dwolla is a developer-friendly solution for businesses looking for a customizable way to integrate bank-to-bank transfers into their infrastructure. It does not, however, allow you to accept card-based payments.

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Braintree is a PayPal service that combines the stability of a merchant account with the international reach of a mature payment gateway, along with solid developer support.

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Fattmerchant provides stable merchant accounts with subscription-based pricing, making it a great choice for businesses that do a high volume of card transactions. Fattmerchant's API allows developers to expand its customer management features and more.

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Other Featured Options:

  • PayJunction: PayJunction offers interchange-plus pricing and touchless credit card processing, along with a full-featured payment gateway. There's a lot of value here, with the ability to customize via PayJunction's API.
  • Adyen: Adyen provides international transaction support with (mostly) interchange-plus pricing, and a powerful API for building integrations.

Read more below to learn why we chose these options.

What Can You Do With A Credit Card API?

An application programming interface (API) provides a set of functions external programmers can use to access and utilize a system. In the case of credit card APIs, that system is the payment service provider’s infrastructure. The full scope of what you can do will depend on the service you are using, but here are some of the things you can potentially do with a credit card API.

  • Accept credit and debit card payments
  • Accept additional types of payments (like ACH)
  • Setup recurring payments
  • Customize fields in the checkout
  • Bank transfers
  • Handle cryptocurrency
  • Route payments to different accounts using specified criteria
  • Customize security features

7 Great Online Payment API Options For Startups & eCommerce Businesses

When you’re evaluating a payment API, the first thing to remember is that it will be attached to a payment processing service. If you don’t care for the service’s rates or way of doing business, no amount of code is going to fix that. Below, we’ll look at some of the services that feature strong developer tools. We’ll touch on the costs, benefits, and risks that come with using each service as your payment provider and/or gateway.

1. Stripe Payments

Stripe Payments



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Stripe Payments bills itself as a full-stack payment processor. What they mean by this is that they combine the functionality of a third-party payment processor and a gateway into a single package. This will be convenient for many businesses provided they don’t already have a merchant account that they want to hold onto, as Stripe doesn’t let you use their gateway a la carte; it’s all or nothing. Like other third-party processors, Stripe makes it easy for newer businesses to start accepting payments, but at the cost of stability issues and industry restrictions.

At a 2.9% + $0.30 flat fee for credit card transactions, Stripe’s costs fall around the median for payment service providers. The cost creeps up a little depending on which additional features you take advantage of, but those too are about average. Where Stripe excels is in its global reach, having support for multiple currencies and payment methods around the world. It supports Alipay, which is pretty much a must if you’re planning to sell in China.

How about the API? When it comes to developer support, Stripe is hard to beat. Their online documentation is exhaustive, easy to parse, and full of readily accessible code snippets in each of the server-side languages it supports (Ruby, Python, Java, Node.js, Go, .NET). They also have links to boilerplate projects you can clone and build upon. If there’s a chink in its armor, it’s that Stripe doesn’t provide a sandbox per se, although they do provide faux credit card numbers that you can use to test out your code.

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2. Square

Square



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Like Stripe, Square is a “full-stack” payment service that combines third-party processing with gateway functionality. But where Stripe is more focused on international support, Square has built up an enormous platform that provides a variety of tools to both eCommerce and brick and mortar businesses–including marketing, loans, loyalty programs, productivity, inventory etc.–on top of processing card transactions. Of course, as a third party processor, similar warnings apply regarding account stability and restrictions on the types of businesses Square will work with.

Square has a variety of add-ons that will affect your pricing, but the basic flat transaction rate for Square is 2.6% + $0.10 for in-person, swiped/dipped/tapped transactions. For online transactions, it’s 2.9% + $0.30.

Square’s one-stop-shop approach to merchant services means that developers will be working within that proprietary ecosystem. Through its Build With Square initiative, Square encourages clients to develop apps that build on top of its infrastructure.

Square breaks its APIs up into two smaller interfaces:

  • Point of Sale API: Allows developers to customize Square’s POS software for use on iOS devices and Square hardware.
  • eCommerce API:Β Allows developers to use Square to process payments on self-hosted, custom websites, all well as utilize tools to track sales using the Square dashboard.

Square provides ample documentation on their developer site, and provides custom SDKs and a sandbox to make development easier (note that you don’t have to use the custom SDKs, they’re just there as an option). Square supports PHP, Ruby, Python, Node.js, Java, and .NET.

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3. Dwolla

Dwolla



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And now for something a little different. Dwolla isn’t a merchant account provider or a third-party processor. In fact, it’s not a service that processes credit card transactions at all. What Dwolla does offer is a way to facilitate ACH payments between two parties with minimal hassle. Its scope is limited, but it’s pretty good at what it does.

Dwolla offers three different pricing schemes. A Pay-As-You-Go plan may appeal to businesses that don’t have a high volume of transactions. It costs 0.5% per transaction, with a minimum of $0.05 and a maximum of $5. Businesses doing a lot of ACH transfers can get flat rates and some expanded features for monthly subscriptions: $2K/month for the Scale plan and $10K/month for the Enterprise plan.

For developers, Dwolla offers a sandbox environment that is a complete replica of its production environment, providing a low-risk way to learn the ins-and-outs of the platform. The company’s online documentation is pretty deep, offering guides and references, as well as tools and SDKs (a helper library, for example). If you’re interested, you can even apply to be in Dwolla’s Integration Partner Program; just be aware that this requires you to follow Dwolla’s guidelines and best practices. Dwolla supports PHP, Ruby, Python, and Node.js.

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4. Braintree

Braintree Payment Solutions



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Braintree is part of the PayPal payment services family, along with sister services PayPal and Venmo. It does, however, function semi-autonomously from the other companies, and have a slightly different focus. At first glance, Braintree’s profile is very similar to Stripe’s–they both combine payment services and gateway functionality, with an eye toward international eCommerce. There are two important differences at this level, however. The first is that Braintree provides a merchant account rather than third-party processing, so you’re getting better account stability, but should expect to have to jump through some additional hoops and wait times to set it up. And unlike Stripe, it is possible to just use Braintree as a payment gateway if you already have a merchant account. I wouldn’t recommend this, though, as using Braintree’s gateway a la carte is more expensive than most other independent gateways.

Braintree’s transaction rates are about what you’d expect for eCommerce. You’re looking at a 2.9% + $0.30 flat rate for card transactions. Using the payment gateway independently is $49/month, with a $0.10 fee per transaction.

For developers, Braintree provides sandbox accounts to explore the service’s functionality. The online documentation is extensive, if not quite as slickly presented as Stripe’s–you have to toggle between programming languages at the top of each page rather than each code snippet, for example. The API reference section is well laid out, however, making it easy to look up the methods you’ll need when you need them. Braintree supports Java, .NET, Node.js, PHP, Python, and Ruby.

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5. Fattmerchant

Fattmerchant



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Fattmerchant is a merchant account provider, and one Merchant Maverick has rated very highly. That’s because they offer subscription-based pricing which eliminates the percentage markup over interchange rates that you’re typically charged when you swipe a credit card. You’ll still have to pay the interchange fees, which your merchant account provider can’t do anything about, but if you’re looking for predictable, volume-friendly pricing you can’t do much better.

Fattmerchant uses Authorize.Net as a gateway by default, so you’ll want to check them out if you plan to engage in a little eCommerce. The company does, however, provide a meaty API called Omni for businesses that want to customize their POS, inventory, tracking, invoicing, recurring billing, and customer management. Fattmerchant provides SDKs for iOS and Android to help expedite development for mobile platforms, as well as a handy Javascript library for tokenizing payment methods. You can sign up for a sandbox account to test out your code.

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6. PayJunction

PayJunction



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PayJunction is another one-stop shop payment service that combines a merchant account with its own, proprietary payment gateway. PayJunction allows you to accept card and check payments in-store or remotely, and its system stores electronic signatures, eliminating the need to save signed receipts. Similar to Square, it eliminates the need for a traditional POS terminal, allowing you to process payments with iOS devices, although it also offers a “smart terminal” that can accommodate EMV and NFC transactions.

PayJunction uses interchange-plus pricing, which we here at Merchant Maverick believe will usually get you the best value overall. The cost of credit card transactions is interchange + 0.75%.

Given the breadth of PayJunction’s services, there’s a lot that you can do with its API. Setting up a development sandbox is pretty easy. The documentation is thorough, but it’s not laid out quite as intuitively as it is with some of the other services we’ve covered; expect to have to do a bit of scrolling to find the exact references you’re looking for.

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7. Adyen

Adyen



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Adyen is a merchant account provider popular with some big name companies like eBay, Spotify, and Microsoft. If you’re wondering why a Dutch payment services company is so popular with American corporations, it’s because this company excels at international transactions. Unusual for an international processor, they support not only online purchases, but in-store as well.

Adyen uses a hybrid pricing system. Visa and Mastercard payments are processed using interchange-plus pricing: interchange rate + $0.12. Discover and American Express, on the other hand, are processed using a flat-rate of 3.95% + $0.12. If you’re using a digital wallet, the pricing is connected to the attached card.

Adyen’s API allows you to build integrations that work with its infrastructure. There’s a lot here to work with, so Adyen breaks its documentation up into a number of topics–online payments, point of sale, plugins, etc.–that you can expand to find tutorials and references for the type of project you’re approaching. There’s also a convenient API Explorer you can use to find methods instead of having to scrub through the references.

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What To Look For In A Payment Processor API

What makes a good payment processor API? There are a few factors I’d keep in mind when you’re looking for a developer-friendly payment processor.

  • Can the service do what you want it to? It may sound like a no-brainer, but you’re still buying a payment services product. Can it handle the types of payments you need it to? Can it work in the markets you’re trying to reach?
  • How is the pricing? Pricing is still the name of the game no matter how much hacking you plan on doing. Make sure the provider’s pricing scheme works with your transaction volume and, preferably, allows for month-to-month contracts.
  • Is it secure?Β Most of the services above use some form of tokenization, so credit card information never ends up residing on your machine. Depending on the company, your PCI responsibilities may vary, so make sure you read through their documentation to find out what they take care of and what they don’t.
  • Does it have good and visible documentation?Β Many payment service providers offer payment APIs, but many of them hide them from the public. As a rule, I think it’s a good idea to be able to skim their documentation and get a sense of whether it’s a tool you want to work with.
  • Does the service provide SDKs and useful tools? Your mileage may vary here depending on your preferences, but some developers may appreciate having custom libraries and other labor-saving perks available to them.
  • Does it have an active community?Β Poke around the forums and see how active a developer community the product has. The more active it is, the more likely you’ll be able to have questions answered quickly and be able to make use of existing integrations and code.

How To Choose The Best Payment Processing API For Your Needs

Now that we’ve covered some of the heavier hitters in the payment processing API department, you should be able to dig in a little farther and match their capabilities to your needs. Remember that a service that is the best for one company may be an awkward fit for another. Take stock of your developers’ strengths and encourage them to poke around publically available documentation; they can give you a good idea of whether the platform can be hammered into the shape you want.

If you’re going to be tinkering with a payment API, it might be a good time to brush up on PCI compliance and security features like tokenization and fraud detection. If you’re looking to customize your payment workflow, you may also want to read up on alternative payment methods.

 

In Summary: 7 Great Online Payment API Options For Startups & eCommerce Businesses

  1. Stripe Payments: Stripe sets out to be a one-stop shop for payment services. With global reach and robust developer support, it's a great option for businesses that don't already have a stable merchant account, especially those that want to do business globally.
  2. Square: Businesses that want to take advantage of Square's broad-reaching infrastructure will appreciate the ability to customize the service's flagship features and integrate them into their own existing workflow.
  3. Dwolla: Dwolla is a developer-friendly solution for businesses looking for a customizable way to integrate bank-to-bank transfers into their infrastructure. It does not, however, allow you to accept card-based payments.
  4. Braintree Payment Solutions: Braintree is a PayPal service that combines the stability of a merchant account with the international reach of a mature payment gateway, along with solid developer support.
  5. Fattmerchant: Fattmerchant provides stable merchant accounts with subscription-based pricing, making it a great choice for businesses that do a high volume of card transactions. Fattmerchant's API allows developers to expand its customer management features and more.
  6. PayJunction: PayJunction offers interchange-plus pricing and touchless credit card processing, along with a full-featured payment gateway. There's a lot of value here, with the ability to customize via PayJunction's API.
  7. Adyen: Adyen provides international transaction support with (mostly) interchange-plus pricing, and a powerful API for building integrations.
Chris Motola

Chris Motola

Finance Writer at Merchant Maverick
Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. He's a graduate of the University of Central Florida.
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