How a Payments API Impacts Your Bottom Line
For developers, there are many reasons to use an API for payments. From RESTful design to comprehensive documentation, using an API can make a developer’s job much easier. But what’s less clear is the financial return that platforms can derive from using a payments API. Here at WePay, our platform partners have benefitted meaningfully from building a scalable payments solution based on our API. Eventzilla, a complete event registration and ticketing platform, stated that: “Partnering with WePay has enabled us to realize significant top-line growth while helping far more event organizers sell tickets and get paid faster and more seamlessly than ever before.” How did Eventzilla do this? How can platforms drive revenue and minimize costs with a payments API? Our insights are below.
More Data Available to Make Better Business Decisions
When your platform company uses an API for payments, you can easily collect a lot of data on everything from the average merchant transaction size to payers’ preferred payment methods. This data can be extremely valuable for your company. Not only can it be used for marketing purposes (for instance, developing targeted marketing campaigns for merchants and payers), but it can also help you make strategic business decisions related to the products and services that your company offers. Through a better understanding of merchant and payer behavior, you’re more likely to make informed investment decisions to boost your company’s growth and revenue.
Improved User Experience to Drive Conversion
Another important benefit of a payments API is the ability to tailor the look and feel of the merchant and payer experiences. Improving user experience can boost conversion and retention. Forrester Research conducted a study on user experience, and discovered that a well-designed user interface can increase website conversion by up to 200%. Appcues states that user onboarding is the most important part of customer retention, with 75% of users churning after the first week if there is a poor experience. Investing in an ideal UX is crucial to keeping customers on your platform.
Multiple Payments Options to Satisfy Payer Preferences
A particularly important piece in driving a great UX is creating an optimal checkout experience for payers. There are many checkout customization options that encourage payers to transact, but particularly noteworthy is the fact that 56% of customers expect multiple payment options at checkout. Thus it’s important to cast a wide net during checkout to capture different payer segments. For instance, consumers who love getting points and miles from their purchases may always opt for their favorite credit card. Tech-savvy consumers may want to use Android Pay or Apple Pay. By providing multiple payment methods, you can boost the number of transactions on your platform.
In addition to driving more revenue, a payments API can decrease costs for your company as well. WePay’s API includes robust risk management and loss protection, so that fraudsters will be thwarted or WePay will take the liability, preventing losses for your platform company. Additionally, many payments APIs cover transaction risk — WePay also identifies collusion fraud, merchant fraud, merchant risk, and risk of non-compliance to prevent platform exposure to these issues. Finally, when regulatory overhead is handled by the company providing the API, the costs of compliance – and the potentially huge fines for not complying – are minimized as well.
Using an API for payments can have a meaningful impact to your company’s bottom line. A robust API that supports multiple payment methods and relevant risk information can help boost profitability and the future success of your business. If you want to learn more about the business and technical benefits of using a payments API, contact us at firstname.lastname@example.org.