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The Complete Guide for Building APIs

by Tracy Finke

APIs are crucial for today’s software development – they take the stage as enablers of powerful digital experiences, not just for users but for other systems. So, if you want to create great APIs, it’s important that you take your time and get the process right. Here’s how to go about it.

Have you ever wondered how your favorite mobile app could have so much data, do so many things, and communicate with systems? The answer is APIs (Application Programming Interfaces).

A great number of companies and businesses nowadays use APIs to deliver new possibilities to their customers and clients, or to optimize their business processes. In fact, it seems you can’t build a web application or software these days without an API.

In this blog post we will give you a run-down on the process involved, and a list of some tools to help you on your journey.

This guide will cover:

  • What is an API and how it works
  • Types of APIs
  • Benefits (Why do businesses use it?)
  • Development Roadmap
  • Development: Key Considerations
  • The Process for building an API

What is an API and how it works

Source: opusconsulting.com

Application Programming Interface is a specification that allows an application to utilize the features and services of an operating system, software application or other device to accomplish a task.

In simple terms: APIs are the tools that allow software to communicate with other pieces of technology.

How does an API work?

An API works by defining a set of functions that are available to other software programs.

To use an analogy, it is the toolbox and each function in that box can be used by other software to accomplish a certain task.

Let’s make an example with a mobile banking app.

So for example, when you tap away on your banking app to transfer money between accounts and pay bills, the app is making a request to the bank’s servers about what you want to do. The server then responds by providing accurate data to the app and it executes on your behalf. This exchange of information between your banking app and the bank’s servers is facilitated by an API. For more information check this blog post.

This is a simple example, but APIs can be much more complex and have many different functions depending on the industry you are in or the function of the application itself.

Types of APIs

There are a variety of different types and classifications when it comes to creating an API, but we’ll just mention the most common ones:


Source: thenewstack.io

SOAP stands for Simple Object Access Protocol. It consist of providing an interface for software applications to communicate with each other. This is done by exposing all the functions (methods) that the application provides.


REST stands for Representational State Transfer and they are an architectural style that is designed to standardize web APIs. REST is a lightweight alternative to SOAP and it has become very common in web development because of its simplicity and ease of use.


JSON-RPC is a simple remote procedure call that uses JavaScript Object Notation (JSON). It’s very similar to SOAP APIs but it uses a lighter approach.


Source: inc.com

XML-RPC is a remote procedure call protocol that uses XML to encode its calls and the responses. It’s basically an extension of SOAP which uses XML to encode the data exchanged between client and server.

Furthermore, APIs can be classified as:

5. Open APIs

These are public APIs that are free to use for anyone.

Restricted or Partner APIs

These are APIs that require a license or rights to use – the public is restricted to use this API.

6. White Label APIs

These are restricted APIs that have been customized for a particular client. The customizing party will remove all branding or label from the API before they are made available to their clients.

7. Private APIs

Source: mygreatlearning.com

These are internal and only accessible to authorized users of a company/organization.

API Benefits (Why do businesses use it?)

There are many benefits of using an API to connect your application with other systems. Some of the most common benefits of using an API include:

  • Reducing development time and costs

Developers can use APIs as a shortcut to build new features and functionalities in their applications. This saves a lot of development time which means you can get your product to market faster, respond more quickly to market demand, etc.

  • Increase productivity

Source: easynote.com

By using an API to integrate your application with another system you can automate certain tasks and make them more efficient. This is particularly useful when you have repetitive tasks that are being done over and over again in your software applications, which can often be time consuming. An API can automate these time consuming tasks and increase productivity in your application. For example, logins, user management and other similar tasks.

  • Improving User Experience

APIs can improve the overall user experience of your application. Think about extra information like weather, news, maps, etc. APIs can be used to pull this data into your application so that the user has all the relevant information they need without having to leave your application.

  • Enables you leverage latest technological trend

As mentioned before, APIs are designed to abstract the complexities of connecting software applications. This means that you can adapt with technological changes and new trends. Today, the IoT (Internet of Things) is a big trend where you have physical objects that are connected to the internet and send data about their status.

This requires an API so these devices can communicate with each other. Others are Cloud technology and AI (Artificial Intelligence). With APIs, you can easily adapt to these new technologies and trends and ensure your business and/or product is not left behind.

  • Helps you expand your business and user base

Source: forbes.com

As mentioned before, APIs can be used as a shortcut to build new features and functionalities in your application. This can help you expand your user base and business by leveraging the current functionality of another system that has already been built.

API Development Roadmap

A few important steps that need to be taken into consideration. If you want your API to succeed, it is vital that they are built on a solid foundation and that there is good planning put into the project before you start building your API.

  • Define Business Requirements

It first starts with defining business requirements for your API. You first need to understand what you want the API to do, who will be using it and how they will interact with it before you can start building your API. If you don’t do this step first, the whole project will be a waste of time and resources because you will likely end up building something that doesn’t meet the requirements or expectations of your business.

In order to define your business requirements for your API, you need to have a good understanding of your business and the goals that it is trying to achieve. This means knowing what problems you are trying to solve with your API, how it will help you achieve business goals and what the end goal of the project is.

  • Define the Data Model for Your API

Source: medium.com

Next, you need to define your data model so that the objects and methods in your API have a standard definition. This will help your development team implement the API by having all of the information about how each object should be implemented so it is clear and concise.

  • Build a Prototype

Once you have defined your business requirements you need to create a prototype for the API. This helps define what objects and data structures the API will use and how it is going to be organized. It can also help you identify what functions need to be built in order for the prototype to work. When you build a prototype, give it to your users, clients or stakeholders for feedback. This way you will know what they think of your prototype and what changes need to be made before developing the API.

  • Implement the Required Functions

After you have defined your data model, you need to implement the functions that are required for each object. The implementation of these functions should follow a standard definition so that the development team knows what to do and it ensures that there is a clear understanding of how each function should work.

  • Deployment & Testing

Source: harvard.edu

The last step of building an API is to deploy it and test the functions. This helps you ensure that everything is working as expected, correct errors that might have been made and that the API functions properly. You can then test your data model with sample data to make sure everything is working as expected. After that, you can then deploy the API.

Key Considerations

When building APIs, there are several key things that you need to consider. They are:

  • Authentication

The first thing to consider when building an API is how the user will authenticate themselves. The most widely used authentication method for web APIs is the use of OAuth. This is an industry standard and it works well for most applications because you can authorize third party resources to make requests on the user’s behalf.

  • Versioning


Source: herzing.edu

Another thing to consider when building an API is how you will handle versioning the API after it has been implemented. It is important to implement versioning for your API so that old versions are not affected by changes made to the new versions of the API. This is important to ensure backwards compatibility with older versions of your API.

  • Documentation

One of the most important aspects of developing an API is documenting it. The documentation should include information about each object, what functions are available for them, what parameters they accept, which ones are required and how each parameter is used. The documentation should also include information about the data model of your API. The documentation will help ensure that your API is used correctly by developers and it should be accessible to the users of your API.

  • Scalability

Ideally, your API should be able to scale so that it can handle a lot of requests and also be able to handle few requests as well without affecting performance. It means flexibility in terms of the number of requests that can be handled. You also want your API to provide performance for each request by minimizing response times and maximizing throughput. This will ensure that your API is responsive to the end user and it works as expected.

  • Speed

While it is important to have a scalable API, you also want one that can provide response times quickly. This way your users will not experience processing time with each request. That said, some APIs such as those tracking real time data like financial trading may need to process each request in real time.

  • Security

Source: nordicapis.com

You also want your API to be secure. You need to check for vulnerabilities and ensure that there is a high level of security. This will help protect your users from unauthorized requests being made by third parties.

  • Rate Limiting

Especially for Open APIs, Rate limiting helps you control the number of requests that are sent by each client. This ensures that the API is not being overloaded with requests and it can handle them as expected. It also helps you ensure that each client has a fair usage of the API and you can limit requests made by each client.

  • Logging and Monitoring

The last thing to consider when building an API is logging and monitoring. This ensures that you can track the performance of your API, visualize how it works, where there might be problems or any issues that are occurring, and how it is being used. It also lets you check which functions are successful or unsuccessful so that you can use this information to improve the overall performance of your API.

The above are some things that you need to consider when building an Open or Private API for any application.

The Process for building an API

Source: computersciencedegreehub.com

It is also important to know that API development has a process just like any other software project. There are generally three approaches to how you can go about developing an API.

  • Coding – In this approach you use software development languages like PHP, NodeJS, Python etc.  to build your API.
  • No-Code Method – In this approach you don’t use any code to write your API. Rather, you use API building tools and platforms like: Apicurio, APISpark, Restpoint, Sheetsu, Pipedream, Xano and others.
  • Hybrid Approach – This is a combination of the two approaches mentioned above. You use some code to write specific sections of your API while you use other tools for the rest of its development.


The purpose of this guide is to help anyone who has any interest or involvement with APIs, from the developer who is new to API development, to the architect who wants a better understanding of how to design APIs, as well as business and design leadership that need some guidelines on how APIs fit into their company.

The goal of this guide is not to give you some magic formula or some secret development tool that you haven’t been given yet, but help you understand what it takes to build a great API.