How Much Does API Integration Cost?

APIs play an important role in both web application and business development. According to the Cloud Elements report, which includes insights from API industry experts and API enthusiasts, 60% of people surveyed said API integration is critical to their business strategy. Developers strive to use APIs for the enhancement of created software.

Application Programming Interface (API) connects web services with servers, enabling services to interact with each other, exchange data, and get access to new functions. In fact, API is a mediator between mobile or web applications – it provides solutions implemented in one service and an environment for creating a new application using these solutions.

Many apps we access daily use APIs: YouTube, PayPal, Yahoo Finance, Google Pay, etc. An example is the social sign-in feature when you sign up for a specific application using your social media account. This becomes possible with a corresponding social media network API.

Integrating an application programming interface is an effective alternative to developing the same feature from scratch. How much does API integration cost for your business? What tips exist to reduce costs? What skills should API developers have? These and other important issues are explored in this article.

Benefits Of API Integration

Programmers prefer integrating third-party APIs over developing ones from scratch for purpose. As the Slashdata survey claims, 69% of API developers use third-party application programming interfaces. Integration of ready-to-use solutions provides developers with a number of important advantages.

Increased Performance

Development process optimization is crucial for speeding up and simplifying developers’ tasks. 3rd-party API integration enables faster development and saves valuable time by allowing different software to rearrange interactions to meet your specific business needs.

Cost-efficiency

Software creation is expensive. The cost of app development depends on various factors that include the technologies used, the developer’s skill level, and project complexity. 3rd-party APIs usage helps you reduce development costs since developers spend less time and effort on it. So they use ready-made solutions instead of trying to build them from scratch.

Improved security

Trustworthy APIs have relevant security measures that increase the protection level of an application from any external and internal threats. It is especially important when integrating payment gateways. Security protocols in APIs typically guarantee real-time protection and fight existing vulnerabilities.

Automation of tasks

The API integration contributes to streamlining and automation of various processes, and the connection between the customer-side and server-side is one of them. With the help of APIs, it is possible to automate manual processes like, for example, filling in data on a website – APIs enable faster information input, saving time for developers.

Additionally, for even more complex automation needs, consider leveraging robotic process automation services (RPA) alongside API integration. RPA can automate tasks that involve manipulating data across different applications.

Functionality of other Software

A straightforward app can be enhanced and modified by additional functionality provided by API integration. For example, this would enable your customers to use integrated digital processors, search engines, and payment services right in your software. As a result, your software becomes an application with comprehensive functionality, so users don’t need to use third-party apps.

Enhanced customer experience

The last but not least advantage on our list is a customer experience that can be taken to a new level. API integration makes it possible to improve customer satisfaction by providing new services and data to them. You can analyze the demands and expectations of customers and easily integrate new functionality required for them within the shortest period possible.

Required skills for API Developers

The next point you can focus on is the skill level of API developers. There are some hard skills any API developers should get acquainted with to integrate APIs or even build them from scratch properly.

API Design

Learning API design techniques helps developers improve their skills and expand capabilities. The knowledge of API design enables developers to build micro-servers, apps, and tools across different platforms to ensure connectivity. API developers can use API design techniques to connect smartphone operating systems like iOS and Android to the media software in a connected car, for example.

Strong Knowledge Of Specific Programming Languages

Working with APIs requires understanding at least one backend programming language to connect applications. For example, at PLANEKS, we use Python as the core backend language for software development as well as Flask and FastAPI for custom API development or integration of third-party APIs. When hiring developers to integrate your API, make sure they have expertise in using the same technologies you need.

Front-End Development

Although API development is more about backend development, developers should have skills to understand how the front-end interacts with the backend, contributing to figuring out the API integration or development process. Full-stack developers, who can build both frontend and backend, can faster integrate an API and get insights into program compatibilities. At PLANEKS, front-end tools in use include Vue.js, React, and HTML5/CSS3.

SOA Knowledge

SOA stands for service-oriented architecture, and this is a popular modular approach to software development based on using distributed and loose coupling reusable components that help integrate different apps with high flexibility. According to a survey published by Statista, 48.7% of API developers consider microservices, a service-oriented architecture pattern, the most exciting technology they work with. SOA skills allow developers to provide server compatibility with various services. Simply put, API developers skilled in SOA can build back-end systems for numerous clients who have different needs.

Database Management Systems

Finally, there is appropriate knowledge API developers should use to integrate APIs, such as database management systems, for example, PostgreSQL (a database that allows developers to test compatibility and configure servers), REST (Representational State Transfer is a tool to test compatibility with web-based services and software architectural style), JSON (JavaScript Object Notation is a data interchange format used for parsing and also testing API compatibility), etc.

Everyone who plans to deal with APIs integration wants to know how the cost is formed and what impacts it. That is why we have prepared 3 primary factors for you to consider.

Functionality

How complex the functionality of the product being created and how many 3rd-party APIs we need to integrate to implement the required task quickly – these factors directly impact the final cost. It is evident that developers need to spend more time if your software requires rich functionality, so API integration costs will grow.

Team location

The final cost of API integration is closely linked to the region where you hire developers. Finding developers in Eastern Europe is a more profitable option than hiring them in North America. Hourly rates may vary depending on the company’s size, staff skill level, and areas of expertise.

• • North America. The average hourly rate of API developers in Canada and the USA is $60-130. The cost depends on the level of the developer (junior, middle, or senior).
  • Latin America. Here the rate of API developers will vary between $25 and 50 per hour.
  • Asia. Asian countries provide API developer services at $20-40 per hour.
  • Australia & New Zealand. This region provides the highest range where senior API developer services cost $140 per hour, while junior developers’ rates are $50-80.
  • Western Europe. The hourly rate of developers in this region is about $70-90.
  • Eastern Europe. The rates in the specified region vary between the $35-70 range.

The PLANEKS company is located in Ukraine (right in Eastern Europe). Ukraine is famous for its advantageous conditions to collaborate with local developers on an outsourcing basis.

Subscription costs

Depending on the service provider, APIs may require subscription costs. Some APIs may have subscription plans, and developers can select the one appropriate for your business. For example, Watson NLU (Natural Language Understanding), a freemium API, starts for free for the first 30K items in the Lite pricing plan, while a Standard plan will charge USD 0,003 per item. So this also may change the integration costs.

Factors Influencing API Integration Costs

Industry-specific challenges, technical requirements, and regulatory demands are integral aspects of determining the complexity and resources required for a successful integration. Let’s consider the examples of how these factors establish the integration process across different sectors.

Complexity of Integration

Industry-specific challenges, technical requirements, and regulatory demands are crucial in determining the complexity and resources required for a successful integration. Let’s consider the examples of how these factors influence the integration process across different sectors.

Fintech

Integrations in this sector often require comprehensive adherence to security standards, such as PCI DSS, and strict regulatory compliance frameworks. Operation and transition of sensitive financial data demand advanced encryption protocols, secure authentication, and auditing processes, all of which contribute to higher costs.

Healthcare

Integration with Electronic Health Records (EHR) systems and compliance with regulations like HIPAA introduces layers of technical and legal challenges. The essential need for interoperability between legacy systems and new technologies further elevates project complexity.

E-commerce

Projects prevalently connect multiple systems, such as payment gateways, inventory management, CRM platforms, and third-party logistics providers. Thus, each added system amplifies integration requirements, increasing time, effort, and costs.

Security and Compliance Requirements

Industries dealing with sensitive data are bound by stringent compliance regulations that significantly impact integration costs. Adhering to these regulations is crucial for protecting customers’ data and the organization’s reputation. Let’s discuss the existing guidelines and regulations on the market.

Fintech

In the fintech industry, compliance with GDPR, PCI DSS, and regional regulations like PSD2 (Payment Services Directive 2) requires solid security measures, secure data storage, and audit trails. Companies must implement secure payment processing, and fraud detection systems and ensure that transactions are fully traceable and transparent. 

Healthcare

In healthcare, safeguarding Protected Health Information (PHI) under regulations like HIPAA (Health Insurance Portability and Accountability Act) in the U.S. or GDPR in the EU requires implementing end-to-end encryption, advanced access controls, and routine security audits. These regulations demand the secure transmission of patient data between healthcare providers while ensuring data is confidential and inaccessible to unauthorized parties. Therefore, healthcare organizations must also ensure compliance with local medical data retention laws.

Legal

The legal sector has rigorous compliance requirements concerning confidentiality, data integrity, and non-disclosure agreements governed by laws like the Data Protection Act and the GDPR. Law firms and legal departments must implement secure document management systems, audit trails, and encryption to secure sensitive client data.

Retail

Retailers, specifically those handling consumer payments and personal information, must comply with PCI DSS (Payment Card Industry Data Security Standard) regulations. These standards ensure that any payment systems or financial transactions are secure, protecting customers from data breaches and fraud.

Government

Government agencies must follow extensive security regulations, such as the Federal Information Security Modernization Act (FISMA) in the U.S., which mandates cybersecurity measures to protect government systems and data. It’s integral for public sector organizations to establish secure, encrypted communication channels and data storage solutions to maintain public trust.

Telecommunications

The telecommunications industry is bound by regulatory frameworks such as the Communications Act and the Federal Communications Commission (FCC) regulations, which require service providers to ensure the security and privacy of user data. Network security, data encryption, and regular compliance assessments are obligatory for meeting these obligations.

Education

Educational institutions managing student records and personal information must comply with regulations like FERPA (Family Educational Rights and Privacy Act) in the U.S. This refers to implementing strong data protection measures to ensure students’ privacy and secure access to their records.

Scalability and Performance Needs

Scalability is a critical cost factor for industries with high transaction volumes, such as those we’ve discussed earlier. Ensuring that APIs can handle peak traffic loads, maintain low latency, and process transactions efficiently requires robust infrastructure. The capacity to scale effectively demands various advanced techniques, each forming the cost of integration and long-term system maintenance.

Load Balancing

Load balancing distributes traffic across multiple servers to prevent any single server from becoming a bottleneck, ensuring that the system can handle large volumes of requests without compromising performance.

High-Availability Systems

High-availability systems are designed to operate continuously without downtime, using redundancy and failover techniques to ensure that services remain stable and operational even if one component fails.

Scalable Cloud Solutions

Leveraging cloud infrastructure allows for dynamic scaling based on demand, offering flexibility to increase or decrease resources in real-time while minimizing costs during off-peak periods.

Data Caching

By storing frequently accessed data closer to users, caching reduces the load on backend systems, accelerating response times and maximizing customer service.

Asynchronous Processing

Offloading time-consuming tasks to be processed asynchronously helps maintain smooth and efficient API operations, even when processing heavy or complex transactions.

Geographical Considerations

The geographical location of your integration team is a crucial factor influencing API integration costs. Labor rates, regional expertise, and access to specialized talent vary significantly across the globe, creating a spectrum of options for businesses. Choosing the right region for your project requires balancing cost-efficiency, technical proficiency, and quality delivery.

High-Cost Regions: North America and Western Europe

In North America and Western Europe, labor costs for API integration are among the highest globally. These regions boast a wealth of experienced developers, advanced infrastructure, and strong adherence to industry standards. The higher price tag often reflects deep expertise, reliable project management practices, and access to cutting-edge technologies. For businesses requiring highly secure, regulatory-compliant, or complex integrations, investing in these regions can often provide long-term benefits through reduced risk and solid implementation.

Cost-Effective Alternatives: Eastern Europe, South Asia, and Latin America

Eastern Europe, South Asia, and Latin America offer lower labor rates, often presenting opportunities for significant cost savings while delivering great value and service quality. Eastern Europe, for instance, is known for its strong technical talent pool and competitive rates, making it an attractive option for projects requiring both affordability and quality. South Asia offers some of the lowest costs globally, but the variance in expertise and quality means careful vetting of teams is essential. Latin America, with its growing IT sector and proximity to North America, is another cost-effective option, particularly for businesses in the same time zone seeking collaborative advantages.

Region	Hourly rate range (USD)	Description
North America	$100 – $250+	High labor costs with access to experienced developers, cutting-edge tech, and strong adherence to standards. Ideal for complex, highly regulated integrations.
Western Europe	$80 – $180	Similar to North America, with a focus on high-quality, secure integrations, though slightly more affordable. Strong technical talent in countries like Germany and the UK.
Eastern Europe	$30 – $70	Competitive rates with high-quality talent, especially in countries like Ukraine, Poland, and Romania. Excellent option for cost-effective, reliable integrations.
South Asia	$10 – $50	Offers some of the lowest costs globally, with significant talent available in India, Pakistan, and Bangladesh. However, quality and expertise can vary, so thorough vetting is necessary.
Latin America	$30 – $90	Growing IT sector with a competitive cost structure, particularly beneficial for companies in the same or similar time zones (e.g., Mexico, Brazil, Argentina).

General Cost Estimates

The cost of API integration varies significantly based on industry-specific challenges, project complexity, and compliance requirements. Let’s explore a breakdown of general cost estimates to provide clarity on potential budgeting needs.

Industry	Estimated cost range	Key cost drivers
Fintech	$50,000 to $500,000	Stringent security measures, adherence to financial regulations, and the integration of complex financial systems (e.g., payment processors, fraud detection tools).
Healthcare	$100,000 to over $1 million	Interoperability with Electronic Health Records (EHR) systems, compliance with regulations like HIPAA, and the need for robust data security.
E-commerce	$20,000 to $200,000	Integration of payment gateways, inventory management systems, and logistics platforms, alongside customization for user experience and scalability.

Please note that these figures represent baseline estimates. The final cost of your project will depend on variables such as the scope of work, the tech stack, and the respective specialization of the chosen development team.

Recommendations for Accurate Cost Assessment

A strategic and informed approach is your guaranteed way to assess API integration costs accurately. Beyond initial implementation expenses, you should include the factors influencing the long-term financial commitment, such as compliance and scalability to ongoing support. Let’s discover how to ensure your cost estimates are precise and aligned with your business goals.

Consult Industry Reports

Invest in comprehensive market research reports from reputable industry analysts. These reports go beyond surface-level insights, offering benchmarks for integration costs, the latest technological trends, and case studies relevant to your sector. For industries like fintech and healthcare, these valuable details can deliver in-depth context on regulatory requirements and cost-saving strategies. Such data ensures your budgeting fully matches real-world scenarios, so you’re armed to handle potential challenges early in the planning process.

Engage with Professional Services

Partnering with experienced API integration specialists is one of the most reliable approaches to achieving accurate cost estimates. These professionals can assess your unique requirements, evaluate existing infrastructure, and recommend tailored solutions that optimize functionality and minimize unnecessary expenses. Their background and experience extend beyond cost forecasting; they can also guide the choice of the most suitable tech stack, frameworks, and methodologies for your specific case to maximize ROI.

Consider Total Cost of Ownership (TCO)

When assessing API integration costs, it’s essential to consider the Total Cost of Ownership (TCO), which incorporates both initial investments and long-term efficiency, as well as security and adaptability.

Ongoing Maintenance

Regular updates are essential to meet the progressing compliance of your domain, handle security threats, and keep up with the dynamics of systems or technologies. Neglecting maintenance can lead to costly performance issues and security risks. Moreover, when neglecting updates, your product becomes less competitive or obsolete, giving way to your rivals.

Scalability

As your business grows, your systems must support higher traffic, new functionality, and technological advancements. For this, your tech environment will need infrastructure upgrades and cloud solutions, adding to TCO but ensuring future growth.

Support and Upgrades

Ongoing technical support and system upgrades are time-tested practices for minimizing downtime, troubleshooting, and being relevant on the market. These enhancements increase costs yet are necessary for maximum operational efficiency.

How To Calculate API Integration Cost

When calculating the cost of API integration, it is essential to consider factors like average hourly rate, the complexity of required functionality, subscription cost, etc. If developers integrate third-party APIs, the cost may vary from $1000 to 10000.

Estimate API Integration Costs with Our Calculator

For a more precise estimation of your project, you can use our development cost calculator. By entering your project details, the calculator will help you get a rough idea of the costs involved based on the complexity and resources required, allowing you to make informed decisions and plan your budget effectively.

Examples

Let’s ‌look at several examples of the most popular APIs used in many applications. Also, we will show some pricing plans for these APIs.

Google Maps API

Google Maps API is used to display maps on mobile and desktop devices. It shows the information on the route and transmits real-time data. Maps from Google are used for geolocation, and Google Maps API is always available in on-demand apps like food delivery apps or taxi apps, etc.

The cost of Google Maps API is $0,50 per 1,000 requests. The First 2,500 requests are free. However, pricing can differ depending on what type of API you need – static maps, dynamic maps, or street view.

Amazon S3

It is essential to provide users with reliable storage and hosting solutions that will be scalable for business. That is what Amazon S3 API does – it allows third-party users to store files in your storage bucket. Amazon S3 makes it possible to store data in large volumes and get quick access to them.

Amazon S3 API provides a free tier for a start with limited capacity for 12 months. However, a plan can be selected individually, depending on the software type.

Payment Gateway API

Your software will probably process payments, so payment gateway integration is a must-have. Mainly, payment gateways cover payment systems like Visa and MasterCard, and their main goal is to secure payments and transactions. There are plenty of reputable payment gateway providers, including Stripe, Braintree, PayPal, and WePay.

So payment gateway API integration cost will depend on pricing plans. For example, Stripe charges customers who spend less than one million per year a fee of 2.9% + $0.30 per payment in the US.

Booking.com API

Booking.com is a hotel and apartment booking software that provides a hotel booking API, and your users can retrieve data from the Booking.com website and see room availability, prices, etc.

Interestingly, Booking.com doesn’t require any API fees, but its API is available for Connectivity Partners only. To become a partner, you submit your details, confirm PCI & PII compliance, and provide the required documents to get approval for using the Booking.com API.

Facebook Messenger API

Sending and receiving messages in your application may be an essential feature. So integrating Facebook Messenger API will provide your users with an opportunity to communicate and create chats. Moreover, this API enables the creation of chatbots that can interact with your users independently. The Facebook Messenger API is available for free.

Relevant Case Studies

Tips To Save Costs When Integrating APIs

Apart from the cost-effectiveness of using third-party APIs compared to developing your API from scratch, you can go further and reduce the cost of API integration using specific methods.

Offshoring

Offshoring means the entire relocation of business registration and processes to another country. Therefore, you can do your business in the territory of another country with lower overhead costs. This provides the opportunity to offer better rates for your clients.

Outsourcing

You can outsource API integration to a company based in another city or country and work remotely with them. Outsourcing implies the delegation of some tasks to companies outside of your own. However, this is also quite an attractive and popular way to reduce development costs. Lower rates, however, do not necessarily mean a lower quality level.

For example, in Ukraine, there are many skilled API developers who can work with software of any complexity. PLANEKS is a reliable development company with good backend and frontend development expertise.

How much does API integration cost?

We may assert that this article can provide a reasonably detailed answer to the question “How much does API integration cost?” Personally, if you need a detailed estimate of your project. PLANEKS will always be glad to assist you.

Our clients are our responsibility! So don’t hesitate to hire PLANEKS for API integration – we will do our best!