The Importance of APIs: Benefits and Usage

Given the breakneck speed at which technology evolves, it is no wonder that business owners struggle to keep up with the terminology.

Application programming interface, for example, is a fancy name for two-way communication between two different apps, databases or systems.

APIs have become the bedrock of modern connectivity. API integration is a critical part of doing business, developing new products, and remaining relevant.

What Is an API?

Most people use several APIs every day.

Anybody who checks a bank balance, consults Google Maps or makes a dinner reservation using a mobile device is using an API. When someone prints a document, Microsoft Word sends Windows the instructions via API.

Simply put, an API allows interaction and shared access to data between two apps. It is a give-and-take of information or services through requests and responses.

Just as websites are designed to provide user-friendly interfaces, APIs are designed for app-to-app friendliness. That is why the computer coding is standardized much like electrical plugs and wall sockets. Two apps sharing an API speak the same language for seamless exchange of data.

Different Types of APIs

APIs break down into four basic types:

Open APIs

These are also known as public APIs because they are published on the internet and shared freely. There are no restrictions on who may access them. Facebook and Twitter rely heavily on APIs. When users want to post to both platforms at the same time, for example, an open API gets the job done.

Partner APIs

These are limited to specific parties and require special permission or a license to access. They are usually set up and maintained by contract. Amazon is a prime example. It partners with cutting-edge software developers that access its system to install or upgrade the latest e-commerce technology. Meanwhile, the online retail giant never misses a beat.

Internal APIs

Also called private APIs, these are designed for consumption only within a company’s internal systems. Authorized users can tap into the data and software they need for increasing productivity or tracking results. Internal APIs are common in human resources departments, financial institutions and health care settings.

Composite APIs

Composite APIs run a sequence of complex functions at exactly the same time. They are ideal for large-scale data operations. A single request to a composite API triggers multiple tasks across multiple data and service APIs. They are especially useful in providing just the right user experience for specific devices like cellphones, tablets or desktop computers.

The Versatility of APIs

APIs are not limited to hard drives. A flower-delivery app, say, can interface with a payment processing app.

Indeed, networked APIs offered by remote devices and systems have forever changed the game. The networks are not necessarily public like the internet. They may also be private networks like those in homes or businesses.

Furthermore, APIs are easy to customize. Once the coding for common, repetitive processes is in place, programmers can add just a few lines of new code — or even one — to create unique functionalities. Standard APIs are completely reusable for a host of diverse apps.

There are obvious cost savings to tweaking basic coding rather than starting from scratch every time. Increased productivity for programmers and developers is an additional perk.

The Benefits of API Integration

APIs offer numerous advantages to business owners and consumers alike:


By some estimates, the average employee relies on around three dozen cloud-based services to improve efficiency. For workers who must manually switch programs throughout the day, all that toggling adds up. APIs make it possible to transition from one app to the next with virtually no effort.

Without API, fielding calls entails identifying the customer, searching for them in the database, and retrieving their pertinent information.

Integrating a cloud-based phone system with a customer service app eliminates several steps. When clients call through such an API, their identifying information and a record of their buying history conveniently pops up on the screen. This not only saves time and effort, but it enables employees to greet customers by name and engage with them about products they have purchased in the past.


Mapping apps have transformed the way we live. Location-based services resulting from APIs make ordering food, buying movie tickets, finding a job, shopping for a home, and choosing a church to attend much more convenient.

The linking of mobile banking apps and digital wallets, such as Venmo, has saved many a harried waiter from creating 12 separate checks for a party of schoolteachers.


Consumers are picky about their apps. They have their favorites that they have come to know and trust.

A business owner can leverage APIs by integrating with popular apps for cross-functionality. Doing so lends credibility to the brand, keeps the brand foremost in customers’ minds, and shows that the business is modern and relevant.

The Prevalence of APIs

Across all sectors, thousands of companies provide APIs in hundreds of categories. Multiple subcategories spring up from those. Third-party developers look for matches made in heaven. When a mapping app meets an Uber or a Yelp, for instance, everybody wins.

We have APIs to thank for more accurate medical diagnoses, easy access to health records, and the ability to book doctor appointments with in-network providers.

Banking and paying bills take a fraction of the time that they used to. APIs enable mobile deposits, digital payments, money transfers, and online investing and lending. They continually gather data from many different sources to update information, point customers to the closest branches, suggest financial products, and detect fraud.

APIs also deliver news and entertainment. Netflix would not be where it is today without them.

In education, APIs work behind the scenes to facilitate online enrollment, curriculum sharing, testing, grading and much more.

In manufacturing, APIs integrate seamlessly with automation and robotics. They play a key role in ensuring that equipment is safe and efficient. They track incoming parts and delivered goods. APIs even make sure that manufacturers comply with laws.

Nowhere, perhaps, are APIs more prevalent than in conventional retail and e-commerce.

This technology is critical to strategic marketing, inventory management and shipping. With APIs, customers know in the blink of an eye whether items they are considering are in stock. Retailers can see at a glance that supplies are running low.

APIs integrate with point-of-sale systems to process payments from a variety of sources and devices. They are expected to play an even greater role in analytics solutions of the future.

In just about every industry, APIs unlock innovation for new products and services. They automate time-consuming tasks to streamline operations and boost productivity. API integration is such a significant breakthrough that analysts refer to the modern business landscape as the API economy.

What is an API? It is a necessary part of conducting business and staying competitive.

API Development & Integration