A payment API (Application Programming Interface) is a set of tools and protocols that allows different software applications to communicate with payment processing systems. It enables businesses to accept online payments securely and efficiently by integrating payment gateways into their websites or mobile apps. This streamlines the transaction process for both merchants and customers. By using a payment API, developers can easily implement features like credit card processing, digital wallets, and subscription billing. Popular payment APIs include those from companies like PayPal, Stripe, and Square, which provide the necessary infrastructure to handle various payment methods and ensure data security.