Edgars Lasmanis, Walletto Founder: What Is the API Economy?

Edgars Lasmanis, Walletto founder, is passionate about innovating the online payment ecosystem, making it faster and more cost-effective. This article will look at the API economy and how APIs have paved the way for businesses to build, upgrade, maintain and scale software – making processes within their organisations faster and more efficient.

Application programming interfaces, or APIs, make the digital world go round. They perform a number of important functions today, for example facilitating login authentication on banking apps; enabling integration of customer service communications on e-commerce apps; and supporting the inclusion of maps on fitness tracking apps. Essentially, in 2022, APIs serve as the glue holding most modern software together.

In modern software development, the benefits of APIs are manifold. At a top level, they support the shift of power from archaic on-site software and hardware to microservices-based applications and the cloud, breaking down processes into smaller, function-based components that are easier to maintain – enabling teams and individual developers to assume responsibility for a specific part of the process.

APIs enables businesses to upgrade, maintain and scale software – and tap into domain-specific expertise. As Kong CTO and co-founder Marco Palladino explained to VentureBeat, APIs enable companies to build products and services that would otherwise take too long to build, allowing developers to more easily access business-critical information, enabling them to focus on other priorities. Teams can access a variety of paid and open source APIs, accelerating application development by removing many manual processes. Essentially, the API economy centres around the exchange of APIs, as well as the systems used to manage them.

In the past few years, some major API deals have taken place, including Okta’s recent acquisition of Auth0 in a deal worth a reported $6.5 billion. According to industry experts, the multibillion dollar API management market is thriving, with no sign of slowing anytime soon.

Commerce experience design is one avenue where APIs present vast scope for innovation, enabling companies to combine their own APIs with those developed by third parties and facilitating the creation of new, more effective solutions. Today, 70% of bankers agree that their organisation’s API strategy is instrumental to their brand, according to a 2017 report from Accenture. In addition, 73% of the participants of that survey predicted that, in five years’ time, ecosystems would have shared responsibility for a brand.

APIs have had a transformative impact on commerce, making it possible for businesses to plug into and build upon the innovations of others and enabling companies to exchange data, building smart, smooth, omni-channel experiences in line with the increasingly discerning expectations of modern customers.

Claire James
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