People throw around the abbreviation API like it’s going out of style, but do they actually understand what it means, and why it’s important? We’re breaking down what API is and does once and for all, for everyone, regardless of background knowledge on the topic.
An API is a business enabler which shares and carries requests from point A to point B. To avoid using complicated terms, let’s use the example of a restaurant. When a customer sits down in a restaurant, they look at the menu and decide what they’d like to order. The meal is coming from the kitchen, but you won’t get to speak to the chef who’s putting your order together. Instead, you speak to the waiter, who’s responsible for bringing your order to the kitchen, and bringing you your meal once it’s done.
A very similar process happens when requesting information from a computer server. When a Caxton client requests an FX rate, our API (the “waiter”) carries the request to our server (the “kitchen”), and then carries the response back to the client.
Now we know how it works, but why is it important? API has revolutionised the way businesses operate. It optimised many processes that otherwise would have been inefficient, easily manipulated or easy to crash. Prior to the invention of API, firms often resorted to manual processes. Companies who needed rate data may have asked interns to pull data from XE.com every five minutes to collect rates, or jump between several different web portals to buy, hold or send currency to an account. An API is resistant to outside influences, making it ideal for carrying requests between client and server with sharply minimised risk of human error or malicious interference. They are more closely monitored and managed with governance and disciplines for security.
Using an API also allows for deeper integration between companies, and within a company’s processes. Attempts to integrate without an API often necessitates using less secure methods, and risking a cybersecurity breach. Companies may resort to transporting, downloading, or emailing CSV files or uploading files via FTP. These carry an obvious risk of a man in the middle attack. Furthermore, the integrity of the data could be questioned as the file is not coming directly from the data source.
All APIs are not created equal. Due to differences in how APIs are hosted, there may be differing levels of security, reliability, availability and scalability. These are the key indicators of the quality of an API, which can significantly impact the user experience.
The Caxton API highly prioritises uptime, meaning that it’s built to be available 24/7 without crashing or timing out. It’s also variable in the amount of traffic it is able to accommodate at any one time. Due to this flexibility, our API has not had a single incident of downtime for the past five years.
This also positively impacts the security of the API, which many would agree is the single most important aspect. Customers need to be able to trust that their data is safe with the provider, especially when dealing with sensitive data. There are ways to test the API to ensure it adheres to security standards. This is often referred to as penetration testing, meaning that software engineers will try to intentionally break the system, or penetrate its defences, to expose potential security flaws before they impact customers.
Caxton’s proprietary API is regularly updated in line with testing and customer feedback, allowing us to quickly incorporate features our clients find useful.
To conclude, API is an enabler that works as a connector between point A (you) and B (the server), to carry requests and results. The basic function of any API will be the same, but the degree of the efficiency and flexibility of each feature is what sets each API apart. The API allows for quicker implementation and launch of innovative features, making it a key part of the future of payments.
If you’re interested in how Caxton is impacting the world of payments and more about our API features and capabilities drop us an email on info@caxton.io. We’d love to hear from you.