What is an API? How Does it Work?


Companies can open up their applications’ data and functionality to external third-party developers, business partners, and internal departments through an application programming interface, or API.

Through a specified interface, services and products can communicate with one another and benefit from each other’s data and functionality. Developers, usually, don’t need to understand how an API works; they simply utilize it to communicate with other products and services.

API usage has increased dramatically over the last decade, to the point where many of today’s most popular web apps would not be feasible without them. Therefore, it is essential for a developer to know how to deal with APIs.

What is an API?

The term API is a contraction for application programming interface. It is simply understood as a connection between programs and software. An application programming interface of a particular service allows other programs or software to leverage the service.

An application programming interface is a set of documented rules that describe how computers and applications interact. APIs serve as an intermediary layer between an application and a web server, processing data flow between systems. APIs come in many forms, such as Composite APIs, Internal APIs, Open APIs, and REST APIs.

Parts of an API

There are two parts to an application programming interface:

  1. Technical standard describing data interchange alternatives across solutions, written as a request for processing and data delivery protocols. It is represented by a software interface written to the specification.
  2. The software that needs data (e.g. X hotel room rates for specific dates) or functionality (e.g., a path from point A to point B on a map based on a user’s location) from another software makes a request to its API. The other software provides the data and capabilities that the first application requested.

An application programming interface establishes the communication between these two applications. APIs are frequently referred to as contracts, with documentation serving as an agreement between the parties: “If one party sends a remote request formatted in a specific way, the second party’s application will react in the same way.”

Function calls – language statements that ask the software to do specific tasks – are used to implement an API. Function calls are composed of verbs and nouns, such as:

  • Begin or end a session.
  • Get services for a single room.
  • Objects on a server can be restored or recovered.

API documentation describes function calls. APIs have a variety of uses. They can make software development easier and faster overall. Third-party functionality (such as a recommender engine, lodging booking, image recognition, and payment processing) can be integrated into existing solutions or used to construct new apps.

Experts do not need to deal with source code or try to figure out how the other solution works in any of these situations. They just connect two pieces of software. An application programming interface, in other words, operates as a layer of abstraction between two systems.

Classification of APIs

APIs can have three different release policies: private, partner, and public.

1. Private APIs

These are APIs with restricted access. In-house developers or contractors can utilize these APIs to integrate a company’s IT systems or applications, as well as to build new systems or customer-facing apps that leverage existing systems.

Even if apps are made public, only those who work directly with the API publisher have access to the interface. The private API strategy grants a company complete control over how APIs are used.

2. Partner APIs

Partner APIs are widely advertised, however they are only shared with business partners that have signed a contract with the publisher. A common use case for partner APIs is software integration between two firms.

A business that gives its partners access to data or skills makes more money. Simultaneously, it may monitor how exposed digital assets are being used, ensure that third-party solutions that use their APIs provide a positive user experience, and maintain corporate identity in their apps.

3. Public APIs

These are APIs that are open to the public. All third-party developers can use these APIs, which are also known as developer-facing or external APIs. A public API application, when properly designed, can improve brand awareness while simultaneously providing an additional cash stream.

Open (free) and commercial APIs are the two types of public APIs (for a fee). All API features are accessible to the public and can be used without limitation, according to the OpenAPI Specification. For example, you can create an application that uses the API without obtaining express permission from the API provider or paying obligatory licensing fees.

The API description and all related documentation must be openly available, and the API can be freely used to construct and test applications, according to the specification.

Users using commercial APIs pay monthly subscription fees or pay as they go. Publishers frequently offer free trials to allow customers to try out APIs before committing to a subscription.

How Does an API Work?

A client application makes an API call, often known as a request, to extract useful information. An application sends this request to the web server using the API’s Uniform Resource Identifier, which includes a request verb, headers, and sometimes a request body (URI).

After receiving a legitimate request, the application programming interface makes a call to the external software or web server. The information requested by the API is returned by the server.

Next, the application programming interface sends the information to the requesting application.

While the data communication method varies based on the online service, the requests and responses are all handled through an API. APIs are designed for computers or applications to use, whereas user interfaces are designed for people to use.

APIs enable the abstraction of functionality between two systems due to their role as a middleman—the API endpoint decouples the consuming application from the infrastructure that offers the service.

API calls typically include authorization credentials to reduce the risk of server attacks, and an API gateway can limit access to minimize security vulnerabilities. HTTP headers, cookies, and query string parameters provide extra security layers to the data throughout the exchange.

Consider the application programming interface provided by a payment processing service. Customers can enter their credit card information on the frontend of an e-commerce application.

The payment processor does not need access to the user’s bank account; instead, the application programming interface generates a unique token for this transaction and sends it along with the API call to the server. This increases the level of security against hacking attempts.

API Documentation

The API documentation is a reference handbook that contains all necessary API information. API documentation is a guide for developers that contains all of the information needed to use the API and the services it offers.

It includes examples of code for popular programming languages like Python, Java, and PHP. To unify documentation structure and design, the experts can employ API documentation solutions such as Swagger tools.


When we analyze APIs from the perspectives of software development and business cooperation, their importance is significant.

These machine-readable interfaces for resource sharing are analogous to delivery services that operate in the background and provide essential technological connectivity. According to the Fourth State of API Integration Report, API integration is “essential” to 83 percent of participants’ businesses and IT infrastructures.

The two primary objectives for decision-makers and developers in this regard are to choose an application programming interface that meets a company’s specific business demands and to learn how to use it successfully.

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