What is API?

An API (Application Programming Interface) is a set of defined protocols and routines that allow different software applications to communicate with each other. It acts as a digital messenger that takes a request from one system, delivers it to another, and returns the response in a format both can understand.

In modern ecosystems, APIs are the building blocks of MACH architecture (Microservices, API-first, Cloud-native, and Headless). Instead of building every feature from scratch, companies use APIs to integrate best-of-breed third-party services, such as payment processing, mapping, or promotion engines, directly into their own products.

API consists of three key components:

• Routines – routines define specific tasks or functions performed by the API.
• Protocols – protocols define the format used to exchange data between applications.
• Tools – tools are similar to segments from which new API interfaces can be built.

How does the API work?

Technically, an API controls the access points of a server. When an external system wants to interact with your software, it makes an API call to a specific endpoint (a unique URL). The API then facilitates the exchange:

1. Request: the client sends a message (usually in JSON or XML format) via a protocol like HTTP.
2. Validation: the API checks for an API Key or token to authorize the request.
3. Processing: the server executes the routine (e.g., "Calculate a 10% discount").
4. Response: the API returns the data back to the client.

Without APIs, developers would be forced to build massive "monolithic" systems where every single function is hard-coded together, making it nearly impossible to update or scale individual features.

Types of API architectures

• REST API – REST APIs have gained popularity recently as part of web services. They are designed to make requests and receive responses using HTTP functions. There are four different HTTP commands that REST relies on – GET, PUT, POST, and DELETE.
• SOAP API – While REST dictates a certain architecture, SOAP is a protocol that follows different standards. SOAP is dependent on XML-based systems and programming. It also usually requires more data to function properly. The SOAP API provides a high level of security. For this reason, it is often used in application programming interfaces intended for financial institutions.

We can also differentiate between client-side and server-side API. A client-side web API is a programmatic interface to extend functionality within a web browser or other HTTP client. Something that is client-side means it is being executed within your application context.

On the other hand, a server-side web API is a programmatic interface consisting of one or more publicly exposed endpoints to a defined request-response message system, typically expressed in JSON or XML, which is exposed via the web – most commonly by means of an HTTP-based web server. Server-side means the API call will be executed from another machine or server.

What are the most common API types?

Most typically, APIs can be split based on their purpose or the relationship between the systems they connect:

• Internal APIs – APIs that connect different systems within a single organization.
• Partner APIs – APIs that connect separate software from at least two different businesses, usually with the goal of offering additional functionality via integration with another service.
• Public APIs – APIs that are available to any interested party and encourage third parties to connect their system with the open API.

What is an API-first approach to commerce?

Many tech-driven organizations are moving away from "all-in-one" platforms in favor of an API-first approach. This means the API is developed as the core product, allowing for:

• Total flexibility: you can change your frontend (website, app, POS) without ever touching the backend logic.
• Faster implementation: integrate complex features like global loyalty programs or real-time shipping tracking in hours rather than months.
• Composable commerce: celect the best microservice for each specific function (e.g., using Voucherify for promotions and Stripe for payments) to create a custom-tailored tech stack.

Voucherify is an API-driven company – our promotion functionalities are accessible via a well-documented REST API that can be connected with an external application in hours.

What are the benefits of using APIs?

• Content personalization – APIs make it possible to understand customer preferences. This helps in creating personalized recommendations and hence leads to better interactions with customers.
• Automation – with APIs you don't have to do everything yourself. The API will relieve you of many tedious development and maintenance tasks, thanks to which you can allocate resources to core business functions.
• Fraud prevention – API can have different security levels, so you can be sure that only authorized parties have access to the data generated using it. For example, you can use an API key, an individual identifier that authorizes you to use the API.
• Speed of integration – it is important for your business to evolve over time. If you have an online store, it's worth integrating it with applications that your customers already trust. For example, you can add a Facebook login function. Most of your customers probably have an account on this social platform, so they can quickly create their profile with you. In addition, if your products and services are associated with popular applications, your brand credibility will automatically increase.
• Build new products – you can use various APIs to build a new product from scratch. For example, the Uber app connects Google Maps with its service interface. You can combine several different APIs to create a completely new product.

Developer’s note: client-side vs. server-side

Choosing where to execute your API call is a critical security decision. Client-side APIs execute within the user's browser, making them fast but potentially exposed. Server-side APIs execute on a private server, keeping sensitive logic and API keys hidden from the end-user. For promotions and financial data, a server-to-server integration is the gold standard.