2026-06-01 · en

What is an API and what is it for in a company

What is an API and what is it for in a company

API stands for Application Programming Interface. In practice, it is a set of rules that allows two systems to talk to each other.

Think of an API as a waiter in a restaurant. The customer (one system) makes an order to the waiter (the API). The waiter takes the order to the kitchen (another system), gets the result, and brings it back to the customer. Without the waiter, the customer would have to go to the kitchen directly, which is neither practical nor safe.

In the digital world, APIs do the same thing: they allow different systems to exchange data and functionality in a standardised and secure way.

How an API works

An API works in a simple pattern:

1. One system sends a request to the API 2. The API processes the request and verifies it is correct 3. The API communicates with the system that holds the requested data 4. The system responds with the data 5. The API returns the response to the requesting system

All of this happens in milliseconds, automatically and without human intervention.

Most common types of APIs

Several types of APIs exist, each suited to different contexts:

REST APIs. These are the most common today. They use the HTTP protocol and lightweight formats like JSON. They are fast, simple, and work well for web and mobile applications.

SOAP APIs. These are older and use XML. They are more rigid and verbose but are still used in legacy enterprise systems such as banking and insurance.

GraphQL APIs. These allow the requesting system to specify exactly which data it needs, avoiding over-fetching or under-fetching. Useful for applications with complex data requirements.

Webhook APIs. Instead of a system requesting data, the webhook sends data automatically when an event occurs. For example, when a customer makes a purchase, the webhook sends the information to the CRM automatically.

What APIs are used for in businesses

APIs are the foundation of modern system integration. Common uses include:

  • CRM integration: synchronising contacts, sales, and interactions between the website and CRM
  • Online payments: connecting the website to payment gateways such as Stripe, PayPal, or Mercado Pago
  • Logistics and inventory: updating stock automatically between e-commerce and management systems
  • Marketing: integrating the website with email marketing platforms, ads, and social media
  • Invoicing: issuing invoices automatically from the sales system
  • Customer service: connecting the chatbot to the CRM and knowledge base

Why APIs matter for SMEs

For years, system integration was expensive and complex, accessible only to large companies. With the proliferation of modern APIs, small and medium businesses can integrate their systems at lower costs without needing complex infrastructure.

Practical benefits include:

  • Elimination of manual work: data no longer needs to be copied from one system to another
  • Error reduction: integration eliminates typing and copying mistakes
  • Real-time information: data is updated across all systems simultaneously
  • Process automation: APIs are the connector that enables workflow automation

Risks and precautions with APIs

APIs are powerful but require care:

  • Security: poorly protected APIs can expose sensitive data. Use authentication, encryption, and access limits.
  • Dependency: if a third-party API fails, your system may become unavailable. Have contingency plans.
  • Documentation: poorly documented APIs are difficult to integrate and maintain. Choose platforms with clear documentation.
  • Versioning: APIs change over time. Keep track of updates to avoid integration breaks.

The future of APIs

More and more companies are making APIs available for their products and services. This model, called API-first, allows third parties to build solutions on top of these platforms.

For SMEs, this means access to technological capabilities that were once reserved for large companies. Integrating systems is no longer a differentiator: it is a requirement to operate efficiently.

At Lanoar, we develop systems that use APIs to integrate tools and automate processes. Every project is designed so that systems communicate with each other in a fluid and secure way.

FAQ

What is an API?

An API (Application Programming Interface) is a set of rules and definitions that allows two software systems to communicate with each other. It works as an intermediary that receives requests from one system, processes them, and returns the response from the other.

What is an API used for in a business?

An API allows different systems to be integrated so they can share data and functionality. Examples include connecting a website to a CRM, syncing an e-commerce platform with inventory management, or integrating the billing system with the bank.

What is the difference between REST and SOAP APIs?

REST is an architectural style that uses HTTP and lightweight formats like JSON, making it simpler and faster. SOAP is a more rigid protocol that uses XML and is more common in legacy enterprise systems. REST is currently the most widely used approach.

Do I need to know how to code to use APIs?

No. APIs are used by developers to integrate systems, but the end user does not need to know how to code. When your website displays CRM data or your e-commerce updates stock automatically, you are using APIs without knowing it.

Are APIs secure?

Well-implemented APIs are secure. They use authentication, encryption, and access control to protect data. The risk lies in poorly configured APIs or those without adequate security measures.

How much does it cost to implement an API?

It depends on complexity. Third-party public APIs may have subscription costs or be free up to a certain volume. Developing a custom API for your business involves development and maintenance costs.