How to Integrate Payouts API with Mobile Apps
Managing payouts for potentially thousands of mobile application users can be expensive and time-intensive. Improving operational workflows and establishing a more efficient way of sending mass payments is key to reducing costs and improving the bottom line. However, companies that operate marketplace sites, send funds to international gig workers, run affiliate programs, etc., must also provide a user-friendly gateway for payment recipients.
Mobile applications offer functionality and convenience for users. With the right payment solutions and API integration, your app can also improve the back-end operations, making it easier for companies to send payouts quickly, efficiently, and with significantly lower costs.
In this guide, we'll explore how to integrate a payouts API into your mobile application, best practices, and several considerations you should make to ensure the integration is as seamless as possible.
A Brief Overview
A payments API can benefit many different types of businesses. From telehealth organizations to eSports companies, any business that must send payments to individuals en masse has much to gain from an API payment solution.
An application programming interface (API) is a software intermediary. It allows mobile applications to communicate and exchange data with other programs based on defined protocols. APIs can transform an existing app in many ways, and you've likely used them numerous times without realizing it.
For example, some apps with an eCommerce online store may use a third-party API to provide a built-in payment gateway. Payment gateways can facilitate secure transactions between a customer's bank and a merchant's, handling credit card information and sensitive data on the app's behalf. Third-party API integration can also allow apps to incorporate social media platform functionality into the software, add mobile commerce features, and more.
The right API can also facilitate mass payouts, allowing companies to operate more efficiently without sacrificing the user experience for payment recipients.
But why not just build all those features into the app?
The beauty of third-party API integration is that it allows companies and developers to add more functionality to an app without excessive development costs. Think of it as a form of modular software design. Instead of taking an app offline to revamp it, you can use APIs to expand an app's capabilities. APIs simplify the improvement of mobile apps. Plus, they can take advantage of the existing functionalities of mobile devices, resulting in plenty of freedom without the hassles of ground-up development.
Users benefit from more in-app features. Meanwhile, businesses benefit from lower costs, faster development sites, and more.
There are many ways to integrate APIs into an app. The technology has come a long way, evolving from the mature SOAP to the more prevalent REST architecture. Whether it's RESTful APIs or Partner APIs, the technology provides more versatility to businesses and developers.
Factors to Consider Before Integrating
The API landscape is vast, and there's no shortage of integration options. You must consider several factors when choosing a payouts API.
The first is the API's functionality. It's important to assess your goals and choose a payment API integration that meets them. Look into how the API can streamline your workflow and enhance the user experience. Pay attention to available options and how they can help manage complex money flows.
Another thing to consider is its ease of integration. APIs are much simpler to integrate than full mobile app development, but that doesn't mean that integration is always straightforward. Low-code options offer the most simplicity, allowing developers to integrate the API into an existing app with few issues. However, it's also important to consider versatility. Your business may need more flexibility during the integration, and APIs offering white-label options may better suit your goals and needs.
Scalability should be another factor to look into. Every business has growth plans, and you must ensure that your payment solution API can grow with your app. It should be scalable enough to handle more users and data as you expand. Otherwise, you may have to switch APIs later.
Security Measures for Secure Transactions
Robust security should always be a top priority during app development and improvement, and third-party API integration should be no different. Fortunately, API integration versus ground-up development typically results in better security measures.
External services are often responsible for authentication protocols and data encryption when using an API. That means you decrease the burden on internal resources while providing heightened security features to your users.
Of course, addressing and mitigating security vulnerabilities on your end is important, too. APIs don't shoulder all the responsibilities. However, choosing an ultra-secure payments API can give you a one-two punch of security, providing additional layers of protection to safeguard all data sources.
When choosing an API, pay attention to its security measures. A great payouts API will utilize advanced encryption to protect all data sources and tokenize sensitive information. Efficient workflows and better payout management shouldn't come at the sacrifice of security and compliance.
Optimizing User Experience
APIs and third-party services should offer complete flexibility in not only how you move money but also how you shape the user experience. Ultimately, users don't see or interact with the back-end logistics of API integration. All they see is the front-end user experience on your mobile app.
Therefore, successful integration should include ways to optimize the user experience from start to finish. The best payments API will offer white-label solutions with options to personalize the user interface to your brand with minimal coding requirements.
Optimization and user interface customization are key to a seamless user experience. If an API takes the user out of the app or into an unfamiliar digital ecosystem, it feels like a separate process. That shift can be jarring and may make users question the legitimacy of the payouts they receive.
Optimizing the user experience allows you to overcome that hurdle. With a great API, you can build white-label digital wallets, personalized payout links, and more.
Handling Errors and Exceptions
Errors and exceptions happen. What's important is how your API integration handles them. When managing payouts, errors can be detrimental to your business. They can cause transaction issues and become a source of serious security vulnerabilities.
There are many ways to address error handling. However, when integrating an API, there must be a logical and uniform way of managing them.
The best approach is to establish a clear and consistent structure for error and exception response across all requests. The process should be predictable while logging issues. On the user front end, error messages should be descriptive enough to understand and correct while not leaking sensitive information.
When choosing an API, pay attention to the API documentation. It should include information about potential error codes, their meanings, and suggestions for remediation.
Testing and Deployment Strategies
Successful API integration requires more than implementing code and going live. While APIs offer flexibility and easier expansion of your app's capabilities, many issues can arise. The exchange of information can go wrong in many ways, and it's crucial to test your payouts API before deploying it. Otherwise, you may encounter substantial performance issues or security vulnerabilities that could put your business and users at risk.
API testing aims to ensure that the integration works as it should. Generally, best practices say that developers should test integrations in separate testing environments. These environments should simulate the production environment, replicating what would occur when sending payouts, onboarding users, etc.
Using a test environment, developers can exercise the API's functionality without worrying about the app's other dependencies.
There are several types of tests you should perform before deployment.
Functional testing focuses on the API's core job. It ensures that API integration functions as it should and responds according to the set protocols. The test can examine methods in the code base, ensuring they respond as expected.
Load testing is also important. It's one thing for the API to function as expected with a single request. However, things could change when fully deployed and when handling many requests. Load testing ensures the API integration continues to perform without issues during peak load times.
Security tests prioritize potential vulnerabilities. Sending payouts comes with an exchange of sensitive banking and personal information. With security tests, developers can ensure the API has the proper configurations and uses all relevant security measures to protect data.
Depending on applicable regulations, developers can also perform compliance tests to make sure the API meets all requirements.
Case Studies and Real-World Examples
A great API and solid integration can transform how businesses manage payouts. There are many great examples available.
One common use case for a payments API is to manage payouts to independent contractors. Gig work is more widespread than ever, allowing people to work on their terms. The problem is that businesses hiring gig workers must pay contractors on time while keeping track of earnings and handling tax obligations. Many rely on outdated and inefficient methods, such as sending contractors payments manually through a bank transfer.
That was the case for Table22, a company that helps restaurants generate more revenue through subscription boxes. Table22 uses independent drivers to deliver boxes to a customer's front door.
Early in Table22's history, the company paid drivers manually. The company kept track of what it owed drivers entirely in-house. They also handled all the bookkeeping, manually collecting tax information and other documentation during a challenging onboarding process. The role of independent drivers is crucial to Table22's success, but managing payouts manually was a significant hurdle for the company. It wasted valuable time and resources.
Table22 started using the payouts API by Dots and saw substantial improvements in its payout management. With Dots, Table22 simplified its onboarding of new drivers and allowed the company to pay them instantly. Furthermore, the API paved the way for more options for how drivers got paid. Table22 used the Dots API to pay drivers on their chosen digital wallet, which helped the company become more attractive to drivers looking for work. Now, Table22 uses Dots to withdraw funds through ACH, PayPal, Venmo, Cash App, and more.
Similar results happened for CookinGenie, a marketplace site that connects customers to personal chefs for at-home culinary experiences. CookinGenie had unique challenges. It paid chefs at different stages, once to cover the costs of groceries and another to pay for the service. Initially, CookinGenie would have staff members initiate transfers manually. It was a resource-heavy endeavor.
The Dots API changed everything. With Dots, CookinGenie integrated the payments process into their chef-focused internal dashboard. They automated the payout and bookkeeping process while ensuring chefs get paid quickly using the method they wanted. It dramatically improved how the company manages payouts, improving workflows internally and the experience for chefs.
Future Trends in Payouts API Integration
The current landscape of payment API integration is exciting. Successful integration can revolutionize a company's entire payout approach, making it easier than ever to handle mass payments while reducing manual labor and costs. But payouts APIs are just getting started.
The landscape continues to evolve as the needs of businesses and mobile app users change. New innovations continue to push the industry forward. Some notable examples include blockchain-based solutions. Some payment platforms are already allowing companies to send payments using crypto.
Others are prioritizing payment management on a global scale. We live in an increasingly globalized world, and many businesses hire contractors and gig workers internationally. Of course, paying international recipients comes with its own unique set of challenges and compliance hurdles, including navigating currency exchanges and even more payment options.
Dots can manage payments in over 150 currencies using dozens of popular payment options worldwide, allowing companies to better serve their sellers, gig workers, and more.
Innovations in artificial intelligence (AI) may also direct the payouts API scene in an exciting new direction. AI may pave the way to more effective fraud detection, better risk management, and a safer payment process overall.
Get Started With Dots Today
Integrating a payouts API into your mobile application is a game-changer that benefits your business and users. Check out Dots. Dots is a payment processing solution offering various features to help you do things more efficiently. Take advantage of real-time analytics, the flexibility to establish multiple payment rails, white-label customization, advanced security, automated batch payment processing, and more.
Schedule your demo today to learn how Dots can benefit your mobile app and business.