A Complete API Development Guide [Advantages + Examples + Cost]

What is an API?

API is an application programming Interface, which defines a set of protocols, routines, and tools for software applications to interact with each other. It enables software applications to interact with each other, allowing them to share data, functionality, and services. For instance, an eCommerce app might use a payment gateway API to securely process online transactions.

In simple terms, you can consider an API as a telephone, which permits programs to communicate with each other. Such as Google maps API can be easily integrated to any website or mobile app, same way, majority of online transactions are powered using PayPal.

Is API free to use?

You should know that every API is not free. Some of the commercial API users either pay for the whole subscription or pay-as-you-go basics.

API is an intermediary that allows two applications to connect two devices. To help you clearly understand API development, we have discussed an example below.

For instance,
When you use Facebook, you need to log in. As soon as you enter your credentials, your Facebook homepage appears. The software that helps to connect these two pages is known as API.

Another common API usage example is a weather snippet. If you search “weather + location name” on Google, you will be directed to the top search results that give you the current weather status.

Now you might have got a clear idea of what an API is. Let us further dive into why you need API Development, its challenges, and its benefits.

What are the Challenges and Benefits of API Development?

The invention of the computer has made human life easier and productive. Even computers help in gathering and sorting exhaustive pieces of data. For example, you want to know how many times your business partner has submitted an invoice to your company. It will be challenging to find it because all bills will be uploaded to a central database.

Now, what actions can you take? Will you do all the hard work by going through every database to ensure you search for the right invoice? No, this will take a lot of time.

For this, you will develop simple software to search that database for all instances of the partner’s name. Now, you just need to search for the partner’s name, and you will get all the invoices related to the partner’s name. It would take a lot less time and be a lot more precise.

We have discussed only one example to show the importance of API in our lives. But what if the API wouldn’t exist at all? What all challenges developers used to face before the API came into existence?

What are the Challenges Without APIs?

  • It was hard to connect one service or product with another.
  • There was a need to build systems from scratch which would result in higher costs for enterprises.
  • Integration of apps was not possible before the existence of API, therefore, it was challenging to integrate payment methods and different services in the software.

3 Benefits of API Development

  1. Utilize and customize the data to search for the solution
  2. Save time and money by reducing the development effort
  3. API permits to communicate service and product with another product and service without developing it from scratch

Which are the 4 Types of API?

There are 4 main types of APIs used in web-based applications.

The API type means the intention of using the API.

Types of APIExamplesExplanation
Public API
  • Facebook
  • Google Search
  • Google Translate
A public API is available for use by any business or developer. Any well-planned business strategy that includes app sharing with other businesses needs to develop a public API.
Partner API
  • Salesforce
  • IRS partner program
A partner API is a mechanism for facilitating B2B interactions that are only available to a select group of API developers or consumers. Let us discuss it with an example: if a corporation desires to share client data with another CRM firm selectively, it can use a partner API to connect the internal customer data system with those firms as well.
Private API
  • Home-cost
  • Amazon API
The API that is hosted by in-house developers is known as private API. The front-end interfaces serve as data and application functions will be on the backend. For contractors or developers, working on a specific function will work as a point of entry.
Composite API
  • Create customer
  • Create order for customer
  • Add item to order
  • Add another item
  • Change order status
The composite API helps to craft the related or interdependent operations. The composite APIs simplify software development and solve complex issues or tightly closed API behaviors. Even, it helps to enhance the speed and performance in comparison to individual APIs.

Which are the 3 Types of API Development Tools?

A well-developed API can be a key to competitive advantage for your business. There are 3 main types of API development tools or terminologies that are used to transfer data over a network faster. Let us study them further.


    REST is representational state transfer, a programming architecture meant to enhance communication between two devices or systems. It is lightweight and based on the idea of providing the data with references only when requested. The best example is the World Wide Web.

  2. SOAP Web Services

    Simple Object Access Protocol is used for sharing structured information as messaging in the execution of web services. XML is the messaging format used for easy format and transmission. You can use SOAP APIs to create, update or delete records, for example, passwords, accounts, and custom objects from a server.

  3. JSON Support

    For effective API development in terms of formatting the data, it is important to consider your API RESTful with JSON support. JSON is lightweight that eliminates the need for ad-hoc code. JSON has a similar syntax to other C- family programming languages which helps the developer to parse to any other language.

Which are the 4 Types of API Design and Testing Tools?

The aim of the API is to be the mediator between two applications by permitting them to communicate with each other. Being a developer you should know that API developers spend around 29.5% of their time programming different APIs. Conversely, in automated testing, it only takes 11.4% of the time.

To save time and money in the long run, it is crucial to automate API testing. Here are the best tools for API building and testing.

Swagger icon


Swagger is a comprehensive set of tools that can help with API development at any level. Designing, developing, documenting, testing, and standardizing APIs are all part of this process. SwaggerHub is also a well-known API management platform.
  • API lifecycle (includes the creation to retirement stages)
  • API mocking
  • Centralized definition storage
  • API standardization
  • Setting and enforcing API style requirements
  • Ability to transform code snippets from API specific formats and turn them into API blueprint
SoapUI icon


SoapUI is one of the most extensively used automated API testing tools. Resting REST and SOAP APIs are common with this device. It’s fantastic because it’s an open-source tool that works on multiple platforms.
  • Test reporting
  • Monitoring of API
  • Advanced API mocking
  • Performance testing of API
  • Asynchronous testing
  • Supports HTTP API testing framework
Postman icon


Postman is a multipurpose tool that can perform both development and test APIs. It started out as a Chrome browser addon. It now comes in Windows and Mac versions.
  • Supported in Windows, Mac, Chrome, and Linux
  • API documentation and running
  • Testing and monitoring of API
Katalon Studio icon

Katalon Studio

Katalon is the go-to free license tool for quick, automated testing across platforms. Capterra and Gartner Peer Insights both give it good marks. Katalon is the most widely used testing platform since it can execute automated tests for web, API, desktop, and mobile apps.
  • Test scripts for mobile and web apps are recorded and generated
  • Menus, tables, and tree views provide a user-friendly and rich UI
  • Groovy language integrated
  • Reports are easy to read and exported to HTML or PDF

Now that you understand the different types of API development and testing tools, take a look at the image below for the 14 best API design tools used by app developers.

best api design tools

Image Source: Dr. Milan Milanović

So, now that we’ve covered the various API design, development, and testing tools, let’s look at why API development is beneficial.

What are the Advantages of API Development?

Understanding and implementing API development streamlines your coordination with system owners as well as other stakeholders to modernize the agency’s systems. Therefore, we have discussed the 5 benefits of API development.

Benefits of API DevelopmentExplanation
Higher efficiencyBy granting API access, the material can be written once and then automatically published or made available across several channels. Your agency’s content is ready for easy sharing and redistribution so that more users can benefit from your purpose of developing the API.
Wider reachPeople who don’t visit your website can acquire information or services from your agency through applications or other websites they frequently visit.

Using API, you can increase your user base by allowing them access information or services from other websites. This will build trust, genuinity of your website and help increase client retention.

Use government assets to your advantageThe federal government’s data and information are a national asset that the American people have paid for. APIs can make data available for a wide variety of users, which was previously available only for the selected few.
AutomationAPIs permit the machines to handle the workload, which otherwise would have required manual work. For example, when you update specific content, it not only affects one page but several pages of the website. Similarly, API allows your entire team to work more efficiently, which even enhances the workflow in the fewer steps by increasing overall productivity.
Enable in mobile appsAPI permits access to data or services. Due to this, data/services can be accessed in mobile apps as well. Whether the aim is to support agency-developed apps or 3rd party apps, the first step is to grant API access to the components that allow greater flexibility in the delivery of information and services.

Want to Build a Mobile App with Custom API?

Our developers have created 4500+ custom mobile apps for Android and iOS, and can assist you in building one for your business.

Cta Image

You have clearly understood the advantages of API development, let us shift to the working of an API.

How Does API Works?

The below image illustrates the exact work process of API.

how does the api work

As you may understand in the above image, an API works as a mediator between the user and the database. API communicates the set of rules that define how computer applications can interact with each other. Let us check the working of an API.3

  • A user sends a request for information to the server.
  • The developers will design the app and permit access to the data via APIs.
  • The request will reach the database of the server.
  • The database will retrieve the required information and send it to the end-user on the mobile screen via API.

GET and POST methods are used to send and receive the data. The GET method is utilized to request the data from a server at the specified resource. POST method will send data to the API server to create or update a resource.

The API includes three parts:

UserThe user makes a request
ClientThe computer sends the request to the server
ServerThe computer reply to the request

The server will be developed initially because it acquires and saves data. Programmers provide documentation, which specifies endpoints for specific data, once the server is up and operating.
This documentation explains the structure of the data on the server to outside programmers. An external user can then query (or search) the server’s data, or create software that searches the database and changes the results into a more useful format.

Let’s take a phone book example to understand it more clearly. You’d get a copy of the white pages phone book in the old days, which listed everyone in your town by name and address in alphabetical order. If you require a friend’s address, you could seek them up by the last name, discover the address, and then use the maps in the back to identify their street.

This was a small amount of data, yet accessing it took a long time. All of that information may now be located in a database, thanks to the wonders of technology.

API Terminologies to Understand

  1. API Throttling: It is the process of controlling the usage of APIs by the users for a specific time.
  2. JavaScript Object Notation: It is a well-known data format utilized for APIs to exchange data on the internet. The exchange may happen between 2 web apps, mobile apps, or a server.

3 API App Ideas that You Can Build

To help you understand the working of the APIs in an easier way, we have added 3 real-time examples of API.

everyday api examples

  1. Making Your Writing Precise: Grammarly API

    Grammarly seamlessly integrates with your text editor and offers seamless assistance. Just by integrating the API and UI components, Grammarly is capable of working in a web-based text editor. Even it makes your writing precise and to the point by performing detailed analysis.

  2. Smooth Shopping Experience: Pay with PayPal

    You might have used PayPal to pay for a product from an eCommerce store. That is the API working for you. The “Pay with PayPal” capability is developed utilizing APIs, just as checking in with a social media service, to ensure that the end application can only perform what it needs to do, without being exposed to sensitive data or obtaining access to undesired rights.

  3. Makes Navigation Easy: Google Maps API

    The Google Maps API is a powerful technology that permits embedding the Google Maps on your website and mobile apps.

    It permits you to customize the appearance and feel of the map to match the style of your site and add appropriate content that your visitors will find useful. You can even learn to calculate the distance between two points in the Google Maps API.

Want to Develop a Custom API?

Do you want to consult our experienced developers and know about the quote for this project?

In fact, we have an experienced team of mobile app developers, who are well versed in building APIs for various industries. After recognizing our expertise in app development, Mr. Ashton approached us to develop apps for his business.

Mr. Ashton Asherian, one of our prominent clients from the USA, wanted to build a mobile application for his business. However, his aim was to build an app solution at a sustainable cost. Our team of experienced developers has guided him and helped him to answer all his questions briefly. Mr. Ashton was impressed by the expertise and finally decided to work with us. You may have a glance at the feedback he shared.

ashton asherian

How Much Does It Cost to Build an API?

The API development cost depends upon multiple factors such as developer cost, development time, database design, prototyping the application, MVP launch, and maintenance cost.

The approximate cost of API development ranges between $5000 to $7500.

You should consider API cost as an investment opportunity for your business. Investing in the right API will surely turn your investment into a fruitful result and help you to develop enterprise mobility solution faster. API development saves a lot of time by eliminating the need to build a system from scratch.

Requirement for API DevelopmentDevelopment Timeline
Designing Database Structure8 – 16 hours
Prototyping40 – 85 hours
Making a Minimum Viable Product (MVP)120 – 160 hours
Documentation60 – 90 hours
Deployment and Maintenance Cost40 – 50 hours
Marketing50 – 500 hours
Approximate Timeline900 hours – 950 hours

We have comprehensively discussed API, the requirement for API development, the challenges API solves, even the importance of integrating API and the cost of API development.

Next is the list of FAQs regarding API development.

Frequently Asked Questions About API Development

Which language is best for API development?

  1. PHP
  2. Python
  3. Ruby
  4. .NET / C#
  5. Java

What is the difference between REST API development and SOAP API?

REST and SOAP API are the communication systems that are used to exchange information in a message format. The below table includes the difference between REST and SOAP API.

REST API is considered a well-known architecture style of software that defines the detailed set of requirements for building web services.SOAP stands for Simple Object Access Protocol which is complex because of adding additional standards compared to REST like security.
REST (RESTful API) includes multiple standards such as HTTP, JSON, XML, and URL for transfer and data communication.SOAP API utilizes XML and HTTP.
In terms of security, REST API uses SSL and HTTPS.Whereas, SOAP includes SSL as well as WS security. Mostly when it comes to setting up bank account passwords, card numbers, this type of security is applied.

Custom API Development Services

This guide covers the answer to all the questions such as the meaning of API, the requirement of API development, the importance of API, and even the type of API for your business.

In addition, you have learned about the benefits of API development, tools to develop powerful API, examples of API, and the cost to develop the powerful APIs for your business.

Being an API development company, if you have any suggestions or require custom API development services, feel free to reach Space-O Technologies. Being a top mobile app development company, our team is proficient when it comes to developing mobile apps and APIs from scratch. Connect with us directly by filling out the contact us form.

Bhaval Patel

Written by

Bhaval Patel is a Director (Operations) at Space-O Technologies. He has 20+ years of experience helping startups and enterprises with custom software solutions to drive maximum results. Under his leadership, Space-O has won the 8th GESIA annual award for being the best mobile app development company. So far, he has validated more than 300 app ideas and successfully delivered 100 custom solutions using the technologies, such as Swift, Kotlin, React Native, Flutter, PHP, RoR, IoT, AI, NFC, AR/VR, Blockchain, NFT, and more.