APIs vs Webhooks: what are the differences?

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By Mariana Almeida Marques

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Both APIs and Webhooks serve the general purpose of facilitating communication between software. They enable two applications to connect with each other and share data, which is crucial for businesses to improve their services and innovate. However, APIs and Webhooks have their unique particularities and are used in different occasions. In this article, we will dive into the differences between APIs and Webhooks, their definitions and how they are used.

 

What is an API?

APIs, or Application Programme Interfaces, work as request-based intermediaries that enable communication between two applications. This allows companies to share data with third-parties, partners or customers. It also allows developers to work on other software and make use of its functionalities without having to actually code it.   

In order to request data from other application, you need access to an API key which is given to you by the third-party. Once you have the API key, you can make an API request or call. If all details are correct, the API will push the information from the web server and bring it back to you. There are various types of API keys depending on what information and software you plan to access. Have a look at our previous article if you want to learn what are APIs and how they work in more detail, and get other real-world examples of its usages.  

APIs are typically used when there are constant changes in data and you need to update your data regularly. Unlike webhooks, which only work based on events, APIs require a manual request. So, if you only need a particular result or piece of information, you would use an API to retrieve it.     

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What is a Webhook?

A webhook is an event-based intermediary that enable communication between two applications. As you can see, the general purpose between an API and webhook is the same: to connect applications and enable them to share information. However, webhooks are event-based so, unlike APIs, you don’t need to manually make a request. Instead, you set up an event and every time that event occurs, the webhook is triggered.

A simple example of how webhooks work can be seeing in automated email notifications. For instance, when you sign up to a website, you often get a confirmation email with all the details. The webhook was triggered by an event (signing up to a website), and the email was sent automatically. Webhooks make communication between enterprises and customers much easier. Because they are automated and respond in real-time, webhooks can also save companies time and resources. They are often used to retrieve smaller data.

 

Main differences between an API and a Webhook

The main difference between an API and a webhook is in how they operate. An API is request-based, and a webhook is event-based. This means that APIs are triggered by a specific request from one server, whilst webhooks are triggered by a particular event.

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To use a real-life analogy, think of making an order at a restaurant. After seeing the menu, you make your order with the waiter. The waiter is responsible for communicating your order with the kitchen, and bringing back what you have ordered. In this case, the waiter represents the API, because it is the intermediator between you and the kitchen. You also had to specifically request what you wanted, so this was request-based.

Imagine now that you have been going to the same restaurant and ordering the same meal for a long time. When you come in, the waiter already knows what you want and immediately communicates your request with the kitchen. This sharing of information was event-based, and it was triggered by a specific event that occurred: you coming in the restaurant. So, in this case, the waiter represents the webhook.    

 

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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Payment trends for 2022

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By Mariana Almeida Marques

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A lot has changed in the payments industry over the past years. Digitalisation and changes in customer behaviour are still the key drivers of this ongoing industry transformation. With enterprises becoming increasingly aware of the importance of keeping up with customer needs, watching out for trends and preparing for the future is the best way to keep ahead of the market.    In this article, we will define some of the biggest trends for the payments industry in 2022.

  • Embedded Finance

Embedded finance isn’t a new concept, but one that will become even more popular in 2022. Essentially, embedded finance refers to any non-financial company that also sells finance products or services within their product offering. A good example of embedded finance is the “Buy Now Pay Later” system, which enables customers to pay for their products in instalments rather than making a one-off payment. The rise of ecommerce played a crucial role in augmenting this concept, which is now being adopted by increasingly more industries.

Embedded finance is made possible through partnerships between institutions and the use of Software-as-a-Service. Non-financial companies will use APIs from banks or other Fintech companies to be able to embed these finance solutions into their own solutions.

 

  • Partnerships

Partnerships between financial institutions and innovative Fintechs have unmeasurable advantages for both parties, and for customers too. The proliferation of the APIs made it a lot easier to integrate third-party software into already built systems. This ease, along with the urgent need for traditional financial companies to innovate, has generated a huge buzz around partnerships.

For once, these partnerships enable traditional companies to offer their customers the cutting-edge technology that they are expecting to see. Not only that, the use of third-party software means that companies don’t have to spend any time, resources and money into building products from scratch. They can easily integrate existing ones into their systems and focus on their core business propositions, whilst benefiting from the technology needed to meet customer demand.

Large financial corporations like Bank of America, Wells Fargo and Barclays have all partnered with innovative start-ups to offer better customer experiences across various fields. This trend is bound to continue in 2022 and the years to come.

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  • Cross-border payments

International payments have risen tremendously during the Covid-19 pandemic, and show no signs of slowing down. With more people having the opportunity to work remotely, wherever they want, companies have partners, suppliers, clients and employees spread across the world. Cross-border payments have become as popular as any other bank-to-bank transfer.

This also means that international payments need to be as fast, cheap and convenient as any other payment type. Deploying the right providers and technologies is essential in delivering cross-border payments in real-time whilst causing no friction in the payments experience.

 

  • Rise of crypto

Not too long ago, crypto was seen as a confusing and untouchable industry. However, in 2021, blockchain technologies have boomed extraordinarily and there are more and more players interested in getting a piece of the crypto pie. Large players like PayPal, for instance, are accepting digital currencies and enabling this phenomenon to become mainstream.

In 2022, we will likely see more businesses centred around crypto and its infrastructure, along with more merchants allowing their customers to use their digital crypto wallets to make purchases. However, cryptocurrencies still face highly worrying issues, particularly around regulatory compliance. The unnavigated world of crypto and the uncertainty that comes with it may slow down its adoption by customers.

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  • Mobile wallets

Mobile wallets are not a trend anymore. In fact, according to UK Finance, there are now 17 million people in the UK using mobile wallets to make purchases. The limit for contactless payments has recently risen from £45 to £100, which shows that the world is becoming cashless, and that mobile wallets are the next big payment method. The usage of mobile phones and other electronic devices to make purchases is likely to grow in 2022 and in years to come. Therefore, it is important to consider offering this payment method to your customers, regardless of the industry your business operates in.

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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What is multi-tenant architecture?

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By Mariana Almeida Marques

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Multi-tenancy makes it a lot more practical for companies and individuals to access software without having to build it from scratch or maintain it. It is a great benefit of cloud-computing, particularly useful for large enterprises that either serve different clients bases or have multiple lines of business to manage. In this article, we explain the meaning of multi-tenant architecture, its usages and benefits for companies.

What is multi-tenant architecture?

Multi-tenant architecture enables multiple partners to access the same computing resources. This means that a single server and applications can be shared by various tenants. The term “tenant” is broadly used to categorise clients, business areas, teams or business partners that has access to the architecture in question. Even though these tenants share the same software resources, their data is kept private, so they aren’t able to access other tenants’ information.

A practical example of multi-tenancy can be found in the banking industry. Each bank has a number of customers with their own accounts. Even though their details are stored in the same database, customers are only able to access their own accounts. They can’t interact with each other or even see who else has an account with their bank.

The same happens in multi-tenancy, where separate entities have access to the same software resources, but they operate independently and are isolated from each other. Multi-tenancy architecture is a component of cloud-based software. You can have a look at our previous article if you are interested in learning more about cloud computing and its benefits for enterprises. When operating a multi-tenancy architecture and dealing with various partners and providers, a vendor management tool may be beneficial.

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Single-tenant vs multi-tenant architecture

Single-tenancy means that a server can only be used by one entity. The whole architecture is controlled by a single tenant, giving them more freedom to manage and change its environment. Consider a small company that only has one line of business and operates exclusively in the UK. They may not need a multi-tenant architecture in order to optimise operations.

However, large enterprises have multiple lines of business in different sectors and different countries. Each line of business is unique and has different requirements. This calls for a multi-tenancy architecture where companies can better manage all their affiliates whilst providing them with the software resources they need.

Advantages of multi-tenant architecture

Multi-tenant cloud-based architecture can be less expensive because companies only use and pay for the technology that they need, when they need it. Alongside that, assuming that you partner with a SaaS provider and use third-party technology (and not your own), you don’t have to maintain or update the actual hardware. This reduces your costs and frees up your human resources.

Perhaps more obvious is the fact that multi-tenant architecture enables large enterprises to use the same technology for various business areas or partners. This means that companies don’t have to use one machine for each tenant and potentially waste resources. By sharing the same architecture with all tenants or business areas, companies are making better use of its resources.

Aside from the cost-effectiveness factor, multi-tenancies allow enterprises to provide a uniform yet personalised experience to its affiliates or partners. With Imburse, the onboarding and management of multi-tenancies is a seamless process. Enterprises also gain access to invaluable payment expertise, and the flexibility to accommodate the individual needs of all partners and affiliates, all whilst optimising their operations.

In some cases, there may also be some disadvantages to using multi-tenancy architecture. For instance, if one tenant is using a lot of computing power, that may slow down other tenants. This shouldn’t happen if the software was properly set up. For regulatory compliance purposes, some companies may not be able to store data and work within a shared environment. However, cloud-based software is rigorously protected and completely safe, so security shouldn’t be a concern.

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Multi-tenancy usages and examples

Large companies that operate in different parts of the world and have multiple lines of businesses (departments or teams focused on a particular business area) need a multi-tenancy architecture to work on. This includes banks, insurers and software providers, amongst others. Think of companies such as Salesforce and HubSpot, for instance. These companies have a single database that is shared amongst all users. However, users don’t know about each other and can’t access each other’s information. They are also able to customise parts of their data, such as visual themes, but they can’t change the core infrastructure.

By connecting to Imburse, you can fully support all your lines of business without having to worry about system integrations or reporting structures. This enables you to streamline operations and to ensure that each business area has the tools that it needs to deliver a great payment experience to its customers. You also get a white-label component that enables each line of business to customise its own platform and adapt to specific customer needs. For instance, a line of business operating in the US benefits from integrating to Venmo, and a line of business operating in the UK benefits from connecting to BACS. It’s crucial that these specific needs are covered in order to exceed customer expectations.

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

 

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What is a pre-paid card?

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By Mariana Almeida Marques

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Pre-paid cards can be compared to gift cards or pay-as-you-go mobile phone deals. When you choose pay-as-you-go, you need to top up the card every time you want to use it, with whatever amount you choose. Your pre-paid card works exactly like that- once topped up with a certain amount, you can use it to pay for goods just like you would use a debit or credit card for. If you want to continue paying with that card, you need to top it up online, at an ATM machine or at a physical shop.

There are virtual and physical pre-paid cards, and customers may be able to choose the type of card they prefer. Note that if you request a physical card, you may have to pay a small fee for the production and delivery of the card, which will be taken out from your available funds. Customers can get a pre-paid card at a retailer, bank or other financial services provider. They can be used with any merchant that accepts its credit card network, such as Visa or Mastercard.

Pre-paid card features and considerations

  • Fixed funds

Unlike debit cards, pre-paid cards aren’t linked to a bank account, so the funds you have there won’t fluctuate. There is a fixed amount that you can spend and, if you try to purchase a product and don’t have enough funds on the card, the payment will be declined. You need to top up the card if you would like to use it for more purchases.

  • Amount limits

Pre-paid cards may impose a fixed limit on how much you can spend daily, how much you can withdraw from an ATM machine and how much you can load into your card. All of these limits vary widely depending on the card types, so you need to check the features of the pre-paid cards on an individual basis. Usually, spending limits are around the £5.000 mark, ATM withdrawal limits are between £500 to £1000 and top-up limits are up to £10.000.

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  • Expiration dates

Pre-paid cards usually have shorter validity periods, which vary between 1 to 3 years. Pre-paid card holders must keep this in mind and either use the funds before the card expires, or request your card to be reissued so you can keep your funds. Even if your pre-paid card expires, your funds don’t, so you don’t have to worry about losing money.

  • Extra fees

There are quite a lot of fees involved with getting and managing pre-paid cards, including card application fees, monthly or annual service fees, and cancellation or replacement fees. You may also want to check for additional fees for ATM withdrawals, purchases and foreign transactions. Altogether, these fees can add up to daunting values. However, most pre-paid cards offer a lot of these features for free. It is crucial that you check the features of your pre-paid card before applying for one or using it.   

 

Advantages and disadvantages of pre-paid cards

One of the great advantages of pre-paid cards is the convenience that they offer. This is particularly true for companies that need to pay out to their customers in a fast and efficient way. Customers are expecting a quick claim resolution, and want to have their funds available as soon as possible. Whilst bank transfers may take a few days to settle, pre-paid cards can be issued and topped up instantly. They are also widely accepted by merchants, so your customers can use them to purchase whatever they need.

Pre-paid cards are also safer than carrying cash and make it easier to track expenses, as they have a limited credit and need to be manually topped up. Some cards also offer cashback on every purchase or at selected retailers. There is a wide range of prepaid cards available, so customers and companies can choose the most suitable ones for them.

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The most worrying aspect of pre-paid cards is the charges. Whilst some pre-paid cards may have very limited fees, others have fees for anything you can think of, including using your card too frequently or not frequently enough, checking your balance or even contacting customer support. Therefore, it is extremely important to double check the small letters this before ordering or using your pre-paid card. Another disadvantage that pre-paid card holders may find is that some online merchants may not accept your pre-paid card, even if its card network is Visa or Mastercard. This is another aspect to keep in mind when making purchases.

 

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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