Application Programming Interface (API) Explained
Many of us who have not been technologically ordained, have multitudinous questions about the different aspects of fintech and its associated literature. The term “API” also belongs to the unfamiliar vernacular for many, which is quite frequently used in the fintech sphere.
An essential jargon in the software world- API, short for Application Programming Interface, simply put, is the means of communication between applications or programs. API lays the groundwork for how systems interact with each other, how data is transferred from one application to another, and more.
An easy way to understand APIs is to think of them as the language of software and applications. When you feed in your credit card details to make a payment on Amazon, the Amazon application communicates with your bank application to verify your details, enabling a successful purchase. This communication is possible because of the API.
How Does an API Function?
For this transfer of information to take place, there are at least three parties required:
– The party that makes a request or a query
– The API that transfers this information to and fro between both parties
– The information holder or supplier
The Steps Involved
Step 1. The requester (client) requests an application.
Step 2. The API receives and processes this user request by engaging with the supplier (external) application.
Step 3. The supplier application sends the information to the API.
Step 4. The API sends this information to the requester.
And so, the circle of communication is complete.
APIs have been designed as the language for systems to communicate with each other for easy data transfer from different applications. This means of communication is conceptually the same as a user interface, where the interface has been designed for users (us humans) to interact with systems.
Private | Partner | Public – The 3 Types of APIs
Private APIs are designed for internal use in companies. If a company has in-house applications exclusively for their staff, they use private APIs to communicate between their internal applications.
Example: Apple Music connecting with Apple Wallet for payments.
Partner APIs are designed for communication between different websites (or companies) that have partnered with each other to give and take access to information.
Example: Apple Music engages with PayPal (or other online portals) for payments.
Public APIs (or Open APIs) are available for use, by anyone and everyone.
Example: Using Google Maps as addresses or location pointers on numerous websites.
Do APIs Come with Hidden Benefits?
Not only have APIs been instrumental in making information transfers between different applications easy, but they also allow more flexibility, creativity, and, more than anything, a layer of security.
With the existence of APIs, it is possible to build different types of applications for various purposes involving diverse information that can communicate with each other to produce better and more refined information or results. This enablement gives a better chance for creativity and innovation of applications, where there are no rigid restrictions.
But one of the most crucial roles of APIs has been to provide an extra cover of security of information as the information shared through APIs is restricted and systematized. The user application does not have access to the entire database of the supplier’s application, so the application can only gain access to what is supplied through the API. This restriction enables very secure transmission of information between applications, making APIs extremely valuable to us.
High-performance REST API by FlexM
REST, short for Representational State Transfer, is an architectural style for APIs that puts up some constraints and allows engagement with RESTful web services through HTTP requests for data transfer between parties.
FlexM offers high-performance REST APIs that allow better and more inclusive control to different company developers. There are end-to-end encrypted, ensuring security and safety of data transfer. FlexM APIs allow the following HTTP methods:
– GET – To fetch the data
– POST – To submit the data.
– PUT – To update the data
– PATCH – To do the partial modifications of the data
– DELETE – To delete the data
To Conclude
The API technology has been in existence for many years now, however, it is recently that its popularity has grown exponentially with the rise in fintech services like open banking, e-Payments involving third-party apps, etc. It is the means of communication between applications of different entities that enables better transfer of data and information and eventually helps build a more secure and concrete system.
