In today’s world of emerging technologies, everyone is adopting an online presence. People are shifting their businesses online to get more sales and customers. Creating an excellent user experience is an important part of the online businesses. Many factors contribute to the success of online businesses. One of the important factors is accurate and reliable exchange rate data. For this purpose, developers invest in accurate currency exchange rate API requests. A currency exchange rates API makes your application or website trustworthy among users.
In this blog, we will discuss all about an exchange rate API. We will highlight the key features of a reliable JSON API, such as trusted sources of currency data. At the same time, we will also show you the most important use cases of a currency API. Besides, we will help you select the right currency exchange rates API for your online business. Let’s read this article till the end.
Table of Contents
What Is an Exchange Rate API?
An Exchange Rate API(Application Programming Interface) is a software intermediary. Moreover, it allows different systems to exchange information related to currency exchange rates. As a matter of fact, exchange rates are essential in facilitating international trade and financial transactions.
The Exchange Rate API helps us access real-time or historical currency exchange rate data from various sources. These sources can be
✔️Central banks
✔️Financial institutions
✔️Market data providers.
This data is essential for businesses and developers who require accurate and up-to-date information to:
✔️Convert currencies
✔️Calculate costs
✔️Make informed financial decisions in a dynamic global market.
Interestingly, an exchange rate API helps us integrate currency conversion capabilities into our applications. It helps us automate the financial operations. As a result, it ensures accuracy and efficiency in global transactions.
Additionally, Exchange Rate APIs also help with currency conversion, historical data retrieval, and support for multiple currencies. As a result, they empower developers to create robust and reliable solutions.
Fixer API
Fixer stands out as a popular API catering to both current and historical foreign exchange rates. It comes with a broad user base. Its user base comprises small and medium-sized businesses, large corporations, and developers. They are drawn to Fixer API’s dependable data sourced from real-time exchange rates.
Fixer API updates the data every 60 seconds. Moreover, the API covers 170 global currencies. It is important to note that this API draws data from reputable sources such as:
✔️European Central Bank
✔️Financial data providers.
The security of your connection is a priority. Therefore, Fixer API utilises bank-grade 256-bit SSL encryption. Fixer API’s implementation is a breeze. All thanks to intuitive code examples, a simple API structure, and detailed documentation. These sources ensure integration within a mere 10 minutes.
Fixer offers scalability with assured availability, delivering rapid responses measured in milliseconds. It provides time-series data and distinct endpoints for single currency conversion. The user-friendly dashboard section of the control panel includes a Quickstart tool for one-click API endpoint testing.
For those starting, Fixer offers a free plan encompassing an API key, 1000 API calls per month, hourly updates, and historical data. Alternatively, the paid plan starts at $14.99/month.
How Do Exchange Rate APIs Work?
Exchange Rate APIs help different computer programs communicate about currency exchange rates. Here’s how they work:
1. Collecting Information
These APIs gather information from trustworthy sources like banks and financial companies. These sources give details about how much one currency is worth compared to another.
2. Making Things Simple
APIs make it easy for developers to get this currency information. Programmers need to ask the API for specific details. For example, which currencies they’re interested in or if they want data from the past? This practice is known as sending API requests. The past data is also called historical data.
3. Staying Secure
To keep things safe, APIs often ask for a special code called an API key. This key is like a secret password that the programmers use to access the API. You can get this API key after registering yourself at Fixer API. Once registered, navigate to the dashboard and get your API key.
4. Sending and Receiving
Programmers send their requests to the API, asking for the info they need. The API then replies with the requested currency details in a simple format. This format usually comes in JSON or XML. You may check the Fixer API documentation to analyze the supported formats.
5. Keeping Up to Date
Many APIs update their information regularly, maybe every minute or hour. This ensures that the info is always real-time. Moreover, it is crucial for financial apps or websites.
6. Putting It in Action
Programmers include the API in their apps or websites. This helps the apps quickly convert currencies or do other financial calculations without needing manual updates.
7. Playing It Safe
Because dealing with money is serious, APIs use special security measures. For example, Fixer API uses SSL encryption to protect the information while it travels between the programmer’s computer and the API.
What Are the Different Types of Exchange Rate APIs Available?
There are various types of Exchange Rate APIs available. They help us fulfil the different needs and preferences of developers, businesses, and financial institutions. Here are some common types:
✔️Free APIs
These are often basic versions that provide essential exchange rate information for free. They typically come with limitations on the number of requests allowed per month or the frequency of updates. One of the most popular examples is Fixer API. It helps us get the conversion rates for free. However, the free plan has a volume of only 1000 requests per month.
✔️Paid APIs
Premium or paid APIs offer more features, higher usage limits, and additional services. Users may subscribe to these APIs based on their specific requirements. For example, a higher number of API requests, increased data accuracy, more frequent updates, or dedicated support.
✔️Real-Time APIs
These APIs provide up-to-the-minute exchange rate information. They are crucial for applications and services that require the most current data for accurate financial calculations and decisions.
✔️Historical Data APIs
These APIs focus on providing past exchange rate information. They are useful for:
- Analyzing trends
- Conducting historical research
- Backtesting financial strategies.
✔️Cryptocurrency APIs
Specifically designed for digital currencies like Bitcoin, Ethereum, and others. These APIs provide exchange rates, transaction details, and other relevant data specific to the world of cryptocurrencies.
✔️Cross-Rate APIs
These APIs calculate exchange rates between two currencies that do not involve the base currency. For example, calculating the exchange rate between the Japanese Yen and the Euro without using the US Dollar as an intermediary.
✔️Bespoke APIs: Some providers offer customized solutions tailored to specific business needs. These APIs may include unique features, data sources, or services based on individual requirements.
It is important to note that some APIs also come with an all-in-one solution. In other words, they offer free plans, paid plans, and customized solutions to their customers. Users can choose the plan that suits them the most. Fixer API comes with an all-in-one solution. You may check it under:
✔️Aggregate APIs
These APIs combine data from multiple sources to provide a comprehensive and accurate picture of exchange rates. They aim to minimize the impact of inaccuracies in any single data source.
Let’s check how to choose an API for your business applications.
What Are the Key Features to Look For in Foreign Exchange Rate Data APIs?
Experts recommend checking the following key features when choosing foreign exchange rate data API. Let’s explore them.
✔️Real-Time Data Updates vs. Delayed Data.
Does the API give exchange rates right away, or is there a delay? Choose based on how fast you need the latest rates for your project or business. Real-time updates are speedy. On the other hand, delayed data might be okay for less urgent needs.
✔️Scope of Currency Coverage.
Check if the API has the required currency info you need. More currencies are better for businesses dealing with global cash. Make sure it covers the currencies you work with or might need in the future. In other words, you must check if the API gives us wider global coverage. For example, Fixer API helps us get exchange rate data for 170 worldwide currencies.
✔️Historical Data Access.
You must check whether the chosen API is providing access to historical data. The past exchange rates data can help you make better decisions. For example, you can also analyze past trends and make financial decisions accordingly. It is interesting to note that the Fixer API provides access to accurate historical data.
✔️Data Accuracy and Source Credibility.
You should ensure that the chosen API provides accurate and reliable data. You must realize the fact that inaccurate data can have a negative impact on your business success. For example, if you are making financial decisions using historical data, and the data is inaccurate, it can significantly impact the decisions. Therefore, make sure that you are choosing a reliable exchange rates API.
✔️Additional Financial Information Offered.
If you are creating an application with a detailed financial analysis, you must consider this key feature. For example, some APIs only show the exchange rates and don’t provide any additional information about the currencies. Your chosen API should be able to convert amounts from one currency to another. At the same time, it should also include economic indicators, currency strength indicators, and many other relevant features. This can help you provide more context to your data.
What Are the Use Cases for Exchange Rate APIs?
There are so many use cases for exchange rate APIs in the real world. Let’s discuss some of the most common scenarios that make your life easier.
✔️Application in E-commerce for Real-Time Pricing.
As we know, shopping applications should have real-time pricing systems. It makes it easier for international users to purchase the products.
Many online shops use exchange rate APIs to change prices instantly based on current currency values. This ensures customers always see the right and competitive prices, no matter where they are.
These APIs help online stores show prices in the local currencies of international customers. As a result, you may enhance the user experience of your platform. This makes shopping easy and trustworthy for people worldwide.
✔️Use in Financial Forecasting and Analysis.
Businesses in global trade need exchange rate APIs for precise currency conversion rates. This helps them plan and forecast finances accurately. If you are a financial data officer, you may use exchange rate APIs for better decision-making. For example, you may analyze the financial trends using the historical data API. Using exchange rate data in financial models helps businesses spot and minimize currency-related risks.
✔️Benefits for Travel and Hospitality Industries.
Travel platforms use exchange rate APIs to display prices in the traveler’s home currency. Interestingly, it simplifies the booking process and helps people understand costs.
These APIs make international transactions in travel easy. As a result, we can ensure customers pay in their preferred currency for services like hotel bookings and tours.
✔️Role in International Remittance Services.
Remittance services use exchange rate APIs to show real-time and accurate conversion rates. This helps senders know the exact amount recipients will receive internationally.
Exchange rate data can help emittance services can cut transaction costs and provide competitive rates. As a result, it makes cross-border money transfers more efficient and affordable.
How Do You Integrate an Exchange Rate API?
Here are some easy-to-integrate API steps:
First, choose your preferred programming languages for integration. If you are thinking of integrating it within an existing system, you should check compliance. For example, you should ensure that the chosen APIs comply with your existing tools and technologies.
Second, create an account at Fixer API.
Verify the account and log in to the website.
Next, navigate to the dashboard and get your API key.
Integrate this API key into your code using your programming language. Fixer provides examples of PHP and JavaScript code to integrate them into your API. Here is the code sample for jQuery Ajax:
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// set endpoint and your access key endpoint = 'latest' access_key = 'API_KEY'; // get the most recent exchange rates via the "latest" endpoint: $.ajax({ url: 'https://data.fixer.io/api/' + endpoint + '?access_key=' + access_key, dataType: 'jsonp', success: function(json) { // exchange rata data is stored in json.rates alert(json.rates.GBP); // base currency is stored in json.base alert(json.base); // timestamp can be accessed in json.timestamp alert(json.timestamp); } }); |
Check Fixer API documentation for further assistance.
How Do You Select the Right Exchange Rate API?
Choosing the right exchange rate API is not rocket science. You need to consider some of the most important factors to make the right choice. Let’s explore them one by one.
The first and most important step is to analyze your project requirements. For example, consider the technologies you are comfortable with. If you are integrating the exchange rate API into an existing system, you must check that the API integrates with your system.
At the same time, you should check all the costs of choosing the right API. For example, you should assess the purchasing cost, any hidden fees, and maintenance costs. You must be able to afford all these costs to provide a reliable experience to your website users.
Once you are aware of all these requirements, let’s move to the next step. Check the following features in your chosen API.
- It should keep users’ data secure and increase reliability.
- It should offer multiple features such as present exchange rates, historical exchange rates, and other such features.
It is interesting to note that Fixer API provides all these features. You can check the Fixer documentation for all the endpoints it offers. You will be glad to know that it can cover almost all your needs for an exchange rate API.
- The next step is to check the coverage of the API. The chosen API should be able to provide you with extensive global coverage. If you are running a business globally, it will make it easier for you to show pricing to users from different locations.
- Finally, you must ensure that the data of your API is coming from trusted sources such as the European Central Bank or trusted financial data providers.
What Are the Best Practices in Using Exchange Rate APIs?
Selecting the right API is not the only thing you need to do. It is also important to make the most out of the chosen API. Therefore, we have listed some best practices for our developers to get the most out of it. Let’s check out the best practices for using our exchange rate API as below.
- Check the API documentation to understand available endpoints, functionalities, and integration guidelines. For instance, check the Fixer API documentation for comprehensive details.
- Implement monitoring mechanisms to track API performance. Regularly update and maintain the integration to address any issues or changes in the API.
- Ensure that the chosen API complies with relevant financial regulations and industry standards to avoid legal complications.
- Establish a fallback mechanism in case the API experiences downtime or disruptions. This ensures continuity in currency-related functionalities.
- Choose an API that can scale with your business needs. Consider future growth and ensure that the API can handle increased usage without compromising performance.
- Check for available support channels and community forums related to the API.
Conclusion
In the above article, we discussed the exchange rate API. Our main focus was on the Fixer API, its features, applications, and how to integrate it. At the same time, we also shared the best practices to make the most out of our chosen API. But that’s not all. We also talked about the best practices to choose the right API for your platform. If you have any questions, you can let us know in the comments.
FAQs
Q. What Is an Exchange Rate API, and How Does It Work?
An exchange rate API helps us convert different currencies globally. It works by collecting the data from trusted resources.
Q. Why Are Exchange Rate APIs Important for Businesses?
They help us show the customers prices in their local currencies, hence enhancing the website experience.
Q. How Do You Choose the Best Exchange Rate API for Your Needs?
Consider pricing, features, accuracy, and other documentation resources to choose the right API.
Q. What Is the Best Exchange Rate API?
Fixer is one of the best exchange rate APIs in the market.
Sign Up at Fixer today – Get the most accurate exchange rates for your business applications.
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