5 ways enterprises are monetizing APIs

Are you delivering business capabilities you can monetize? It’s a question enterprises should ask themselves. APIs can create new opportunities and revenue streams when treated as more than technical interfaces.

Nearly two-thirds of Postman’s 2023 State of the API Report respondents said their APIs generate revenue. 43% said APIs produce more than a quarter of company revenue.

API monetization comes in different forms

When you think about monetizing APIs, the most classic definition is charging for API use – what we often call direct monetization. This could look like a classic tiered subscription model, pay-per-use, or a freemium setup.

But as Axway Catalyst Emmanuel Methivier points out, it’s vital to think of all the possible ways of adding value when building your API strategy, rather than stopping at a simple exploration of direct monetization. In fact, direct monetization by charging for API use isn’t the right fit for every case.

Are you wondering how to get started with monetizing APIs? Here are several examples of enterprises getting a return on their API investments, and a look at why an API marketplace is an essential tool for taking the next step in monetizing APIs, whether directly or indirectly.

See also: 3 steps for API monetization

1. Bringing new services to market to edge out competition

As new businesses enter your market, delivering relevant, quality services is even more critical. APIs can support a long-term growth strategy.

A leading insurance provider in Germany sought a single API management layer to deliver services to customers faster. Axway’s Amplify platform supplied it. Without compromising on standards, the insurance provider has been able to scale. They’ve increased the number of API calls by a factor of eight since deployment.

One service is an API-powered portal that updates users on their insurance claim statuses. These customer-facing services have been a differentiator in today’s insurance space.

2. Streamlining new client onboarding — and API consumption in general

Helping new clients unlock the value of solutions can require custom-built integrations. The less friction in the onboarding process, the more inclined organizations are to adopt these solutions.

This happens when banks, for example, choose to open their relationship onboarding (a process that can cost several hundred dollars) to the fintech ecosystem. The bank saves on this costly step by opening up free APIs to its partners, thus making an indirect gain with each onboarding.

Even internally, streamlining the use of APIs for distributed developer teams translates into real gains, like deduplication of resources and faster digital product delivery.

One leading pharmaceutical company operates around the world, with business units for human and animal pharmaceuticals as well as a B2C e-commerce channel for animal health products.

Thanks to a central API marketplace and a transformed approach to API development, the company is creating easy-to-adopt digital products — bundles of well-documented API assets that address specific business needs.

“The marketplace approach will transform the experience for consumers,” says a spokesperson.
“We are shifting from standalone APIs with descriptions that assume significant knowledge on the part of the user to packages of APIs that are clearly labeled based on the high-level capabilities they deliver. We are confident that this approach will help us ramp up adoption quickly.

3. Delivering real-time personalization to support existing partnerships

Value-added recommendations can go a long way in supporting customer relationships. But to be effective, suggested offerings must resonate with an individual’s unique goals.

CommunityAmerica Credit Union wanted to use years of financial data for this exact purpose. With Amplify Platform, the credit union has united many data sources. This volume of information allows the business to understand its members’ unique behavior, needs, and preferences.

A 360-degree member view has enabled more personalized marketing. Automated recommendations are made based on member data. The number of cross-sell and up-sell opportunities has increased.

4. Enabling digital transformation that attracts new customers

Across industries, customers have come to expect more speed and convenience. Gaining market share means delivering 24/7 services via digital tools.

While security remains critical in banking, there’s a push to deliver new and responsive services to customers. Commerzbank, a leading German bank, is part of that push. To support seamless digital experiences, Commerzbank set up a robust, API-powered architecture.

Backed by the mentality of ‘build once, reuse many times,’ Commerzbank has developed 150 strategic APIs.

From the first year of using Axway, API calls have jumped from 2 million to 11 million monthly requests. Many new customers have cited the bank’s API catalog as why they decided to engage with Commerzbank.

You can watch the video below to learn more; Katharina Haack, API Product Owner at Commerzbank, discusses their API strategy and governance, leading to ecosystem engagement and increased business.

5. Defining new business models to access hard-to-reach markets

Some target customers can be more challenging to reach than others. One way to extend the value chain is by generating new partnerships with the help of APIs.

PermataBank, a leading Indonesian bank, extended its customer base by embedding its banking apps in fintech apps and services. From payments to money transfers, the bank generates more revenue through processing services. Fintech partners take on customer acquisition costs through their promotion and marketing strategies.

Over three years, PermataBank has increased new account creation by 375%. Meanwhile, transaction volume has grown by 274%.

A unified view is essential for monetizing APIs

It’s important to have solid data to make the right decisions around monetizing APIs – whether directly or indirectly.

Bosch creates cutting-edge digital solutions across all lines of business, from mobility solutions to industrial technology, consumer goods, and energy and building technology. One example of how APIs play into this is around Bosch’s smart home solutions powered by internet-of-things (IoT) technology.

David Geiger, Head of API Management at Bosch Digital, explains: “For internal users, APIs provide access to the data, processes, and systems that allow us to automate our workflows and become more efficient. And for external users, APIs support our IoT solutions, business partner integrations, and other data-driven business models.”

Download the new case study to learn how Bosch accelerates product and service innovation.

As API adoption increases, it can be all too easy for developers to spend time building integrations that other teams have already created. Today, Bosch manages around 2,000 APIs using Amplify API Management, with an overall volume of about 200 million transactions a month and teams distributed worldwide.

Working with Axway, Bosch launched Amplify Enterprise Marketplace, bringing all APIs in the organization into one easy-to-manage catalog.

Geiger continues: “With Amplify Marketplace, there’s no need for developers to traverse the whole organization trying to find the right API; it’s going to save a huge amount of time.”

And as Methivier notes, enterprises like Bosch show that opening up APIs, even free of charge, can be a real win-win situation. By exposing APIs for the electric motors of their bicycles, for examples, startups can create accessories and services that form an ecosystem which builds customer loyalty (geolocation, training, sports, connection to Strava, etc.).

In its broadest sense, API monetization is the ability to drive revenue from your APIs. It takes a unified solution to motivate revenue and have a viable business model for API monetization.

Amplify Enterprise Marketplace allows you to curate and monetize APIs in a central marketplace you build to simplify API adoption and get your latest digital service to the market faster.

It can accommodate multiple gateways for a unified view, tracking all APIs everywhere and making it easy to group APIs in ways that make sense.

And when you’re ready to monetize your APIs, you’ll be able to create and manage API products with subscription plans for monetization, publishing them to your Marketplace to speed adoption and time to market.