What is API monetization?
API monetization is the process by which businesses generate revenue through their APIs. APIs are the accessible version of a web presence, allowing others to access and integrate our data and resources into their public or private sites and applications. Enterprises should put an API management plan in place early on and frame an API business model, which will be the baseline for API monetization. API monetization is not just about how APIs generate revenue; it is also about how well they keep their APIs operative and functional for consumers.
Top 3 things businesses should take into account while monetizing their APIs:
Models for monetizing APIs
An organisation can decide on the payment models for their APIs in the API Strategy phase.
- Offering services under categories such as Bronze, Silver, Gold, Platinum etc. where you give access as per the chosen plan.
- Pay as you use – you can ask your consumers to pay for what they use with respect to storage, API consumption, bandwidth and other such parameters you determine.
Communities of API users
The need for API management
A robust API Management strategy is a must to effectively monetize your APIs. Managing your APIs is not just about the security aspect but about how well they are designed, what implementation standards they’re built on, how they are deployed, their discoverability and monitorability. The entire Lifecycle of each API must be managed effectively for it to be useful to an organization.
Through API management, you can create a secure and consumable environment for your public & private APIs. API management also gives you the flexibility to manage access control, track usage and control the rate of requests. If you are wondering which API Management tool can help you with all of this, at a reasonable price, check out the DigitMarket API Manager tool here.
Open Banking APIs
An open banking API is an API through which Banks make available select customer data and services for consumption by the public or third-party developer community. Open Banking is seen as a new force that will finally help banks to build a greater digital ecosystem. Such an ecosystem will enable newer revenue channels, enhanced customer engagement and better banking services.
PwC forecasts that the Open Banking sector could quadruple its worth to generate £7.2bn of revenues by 2022.
Key areas that banks should consider:
- Banks that have many years of evolved legacy systems will have to build a flexible and responsive layer over their core banking and other legacy backend systems that can interact with the API environment
- Some banks may need to revamp their integration platform to securely interact with third-party providers and partners. Depending on what level of exposure is required to enable a certain service or data, they will possible need to build ground-up a robust integration layer to be able to tap into the digital ecosystem
- At an early stage, banks should plan the monetization strategy for their Open APIs. This can be accelerated once they successfully deploy a robust API Management Lifecycle product to productize their Open APIs
- Banks could choose a platform like DigitMarket to help them optimize, monetize and accelerate their open banking initiative
About the Author
Test Engineer, Torry Harris