Key takeaways
- An API lets two systems talk to each other, so a person does not have to copy data between them by hand.
- Most business APIs are everyday things like payments, shipping rates and stock updates.
- Before you pay for API work, ask who owns the code, how it is secured and who monitors it.
An API is a set of rules that lets one piece of software ask another for information or an action, and get an answer back. When a website shows live delivery prices, takes a card payment or lets you log in with another account, an API is usually doing the work in the background. For a business owner, the useful question is not how an API is built, but what it connects, who owns it and what happens when it breaks.
What is an API?
API stands for application programming interface. It is an agreed way for two programs to talk to each other without either one needing to know how the other works inside.
Think of a waiter in a restaurant. You do not walk into the kitchen. You tell the waiter what you want, the waiter passes the order to the kitchen, and brings back the result. The API is the waiter: it takes a request, passes it on, and returns an answer in a format both sides understand.
How does an API work in plain English?
Every API call has two parts: a request and a response.
- The request: one system asks for something, such as "what is the status of order 1042?" or "take this payment".
- The response: the other system replies with the data or confirms the action, such as "dispatched" or "payment accepted".
Requests usually need a key or token, which proves the caller is allowed to ask. The provider can also set limits on how often you can ask, so one busy customer does not slow the service for everyone else.
What are some everyday examples of an API?
- Payments: your online shop sends the order total to a payment provider and receives approved or declined.
- Maps and addresses: a delivery form checks a postcode and fills in the address.
- Shipping: your shop asks a carrier for rates and gets tracking details back.
- Sign-in: a "continue with" button checks your identity with another service.
- Stock and orders: your website and your warehouse system keep the same numbers.
None of these need a person to copy data between systems by hand. That is where the time saving comes from.
What is the difference between an API and an integration?
An API is the door that a system opens so others can use it. An integration is the working connection you build through that door. One API can support many integrations, and an integration often uses several APIs.
If you are weighing up a connection between your own systems, our guide to API integration covers what it involves and what can go wrong.
Do I need a custom API for my business?
Not always. If two popular tools already offer a ready-made connector, use it. A custom API makes sense when:
- your systems are built in-house or are too specialised for a ready-made connector,
- you want partners or customers to connect to you in a controlled way,
- a manual step, such as re-keying orders, is costing real time every week,
- you need to control who can see what, and keep a record of it.
Our API development and integration service starts by working out which of these applies before anything is built.
What does it cost to build an API?
There is no single price, so be wary of anyone who quotes one before they know your systems. The cost depends on how many things the API must do, how sensitive the data is, how well the other system is documented and how much testing and monitoring you need. Ongoing care matters too, because software that other systems depend on has to be kept working. Our guide to what drives custom software cost explains how to read a quote.
What should you ask before you buy API work?
Ask these questions before you sign:
- Who owns the code and the documentation when the work is finished?
- How will it be secured, and where are access keys stored?
- What happens if the other system changes or goes offline?
- Will someone monitor it, and who is told if it fails?
- Is there written documentation so another developer could take over?
A good supplier answers these plainly. Vague answers are a warning sign.
What can go wrong with an API?
- Changes you do not control: a third party can change or retire part of its API. Without monitoring, you find out when something stops working.
- Limits: providers cap how often you can call them, and a busy day can hit the cap.
- Security: keys left in the wrong place can be copied and misused.
- Downtime: if the other system is down, your own features that rely on it are down too.
Most of these are manageable if they are planned for from the start.
Frequently asked questions
Is an API the same as a website?
No. A website is made for people to read in a browser. An API is made for software to talk to software, and usually returns data rather than a page.
Is an API free?
Some are, many are paid by use, and some are free up to a limit. Check the provider's terms for limits and charges before you plan around one.
Do small businesses use APIs?
Yes, often without realising it. Online payments, shipping labels and accounting links usually rely on APIs.
How long does it take to build an API?
It depends on what it must do and how well the other system is documented. A simple connection can be quick; one with strict security and many systems takes longer. An honest supplier gives a range after looking at your setup.
Do I need to understand the technical side?
No, but you do need to know what is being connected, who owns the result and who maintains it. That is what the questions above are for.