A SaaS API can increase revenue by offering your customers additional functionality at a price they can’t refuse. In this post, we’re exploring API as a product and sharing examples of the types of SaaS APIs that can add revenue.
Revenue-generating APIs go above and beyond to meet the needs of your highest paying customers, whether those are large enterprises who need your product to communicate with their full suite of software or agencies who rely on your product to satisfy their clients.
What is a SaaS API?
A SaaS API is a set of functions or procedures that enable seamless access to a SaaS product’s data and functionality by other devices, systems, or services—often by other SaaS products. Modern SaaS APIs are increasingly designed with an ecosystem-first approach, where APIs serve as core products that foster collaboration between services and platforms.
This has led to the emergence of API-first SaaS companies, which prioritize API design and functionality to achieve greater scalability and developer adoption. APIs serve a variety of purposes, including user management, results tracking, usage monitoring, and more.
However, a revenue-generating SaaS API must also provide measurable value to customers by addressing critical integration needs or enabling new workflows. And, API gateway SaaS is an important consideration to secure operations across diverse applications.
Emerging Trends in SaaS APIs
As SaaS APIs continue to evolve, several key trends are shaping the API landscape:
API-First Development: Rather than viewing APIs as add-ons, many companies now adopt an "API-first" approach, treating APIs as standalone products that drive their ecosystem strategy. This shift enables SaaS platforms to prioritize developer experience, keeping APIs easy to use, well-documented, and scalable.
Ecosystem Building: Modern SaaS APIs are not just about enabling integrations—they are pivotal in creating robust ecosystems. These ecosystems allow developers and partners to build on top of the SaaS product. This in turn unlocks new use cases and revenue opportunities.
Modular and Composable Architecture: APIs now play a critical role in enabling composable software systems. Companies design APIs to allow users to pick and choose functionalities to fit their unique needs, rather than using one-size-fits-all software solutions.
Security and Compliance as a Priority: With increasing regulatory demands like GDPR, CCPA, and others, SaaS security API is no longer an afterthought. Companies are adopting advanced authentication, data encryption, and compliance monitoring features within their APIs to protect customer data and maintain trust.
Developer Enablement and Monetization: There is growing focus on developer enablement through tools like API marketplaces, SDKs, and interactive documentation. In parallel, SaaS businesses are leveraging tiered API pricing and pay-as-you-go models to generate additional revenue streams.
Viewing API as a product
Even when the end-user of your product is an internal employee, it’s wise to treat your API as a product so that your team devotes the maintenance hours required.
But what about viewing your API as a product that you can sell to customers? In order to successfully build, deliver, and profit from an API, you must treat it as a product. Here’s how:
Do customer research to know what APIs customers want and what sort of value that would provide the customer (saving them time, increasing their own revenue, etc.)
Determine what APIs would impact the most customers in the most valuable way
Assign the API project an individual owner who is in charge of managing the product to the fulfillment of end-users demands
Do usability testing to better understand how developers use your API so you can improve it over time
Test and maintain the quality of the API over time
When an API is treated this way, you can see that it becomes a secondary product built with an agile methodology. That’s very different from a one-time custom enterprise application integration service for a customer. Instead, the API becomes a scalable product.
Different types of SaaS APIs and their use cases
SaaS APIs come in various types, each designed to address specific needs and use cases. Understanding these types is crucial when considering APIs as standalone products or strategic tools for enhancing SaaS offerings. Here are the most common types of SaaS APIs:
Public APIs: Public APIs are openly available to developers and external users, allowing them to integrate with your SaaS product. These APIs are designed to attract wide adoption and foster innovation.
Partner APIs: These APIs are shared exclusively with selected business partners to facilitate deep integrations and collaborations. Partner APIs often come with custom features tailored to specific use cases..
Internal APIs: Internal APIs are used within an organization to streamline communication between different internal systems or microservices. They are key to improving operational efficiency.
Composite APIs: Composite APIs combine multiple API calls into a single request, enabling more efficient data processing and reducing latency for complex applications.
GraphQL APIs: GraphQL APIs give clients flexibility in querying data, allowing them to request only what they need. This reduces data over-fetching and enhances performance.
Streaming APIs: Streaming APIs enable real-time data delivery by establishing a persistent connection. These are essential for applications requiring instant updates.
How to choose the right API type
Selecting the right API type depends on your goals and the problems you aim to solve for your customers. A successful SaaS strategy often combines multiple API types to address a variety of use cases, creating a robust ecosystem that meets diverse needs.
7 different ways to increase revenue with a SaaS API
Now that we see SaaS APIs as a product, it’s time to take a look at what types of products these APIs might be. What can you offer customers? What problems can you solve? Here are some different options that may or may not apply to your particular SaaS.
1. Help customers track data in their KPI dashboard
One of the most common SaaS APIs is simply getting the data out of a tool in order to track results. Your larger customers may want to integrate your SaaS product with their internal dashboard, one that is custom built or offered by another vendor (and not just a Zapier zap away). You can offer this at an additional fee, or roll it into your highest tier subscription. Customers who need it will have to upgrade, meaning you’re upselling the right customers.
2. Help customers save employee time
Another SaaS API might help customers to save on manual employee hours. Let’s say your product requires manual entry of its data into another tool that employees use. If you discover that lots of your customers are having the same issue (they love your tool, but when they export data, it’s time consuming for them to make use of it), then you can solve this problem with an API that will allow them to easily hook into their other critical systems.
3. Allow for whitelabeling
A SaaS API can make whitelabeling simple and profitable for everyone involved. For example, HR and payroll software PaySpace allows customers to whitelabel its software. Accountant and CPA firms can now sell the use of PaySpace to their clients, typically as an add-on to the monthly bookkeeping, accounting, and payroll service they provide. The benefit is that the accounting firm gets to offer a software that collects everything they need to provide the service, and they get to do it in away that increases their authority. It will look as if the company has built the product themselves.
If your SaaS product is used by service providers, you should conduct customer research to determine if whitelabelling all or part of your product is something your customers would benefit from.
4. Acquire more enterprise customers
Many APIs can be included in your enterprise or custom plans. Just as with the KPI tracking example, you can increase revenue by going upmarket and targeting larger and larger companies. If you offer common APIs like authentication and user management, operational data store, and usage metrics, you can successfully attract and retain more enterprise customers.
5. Process more transactions
Maybe you need an API to make your payment processor ubiquitous? PMC Coin is a payment gateway based on gold and cryptocurrency. We built their API to allow developers to use the payment gateway in their sites similar to Stripe. This means that PMC Coin can process more transactions across the web and, of course, increase revenue because of it.
6. Inspire partners and affiliates
If affiliate or partner acquisition accounts for a large portion of your customers, you might want to consider an API that helps them track their revenue, or even a leaderboard for some friendly competition.
Fundwise Capital is another API project that we have built and continue to maintain. Fundwise Capital offers startup funding and small business loans. A large part of their new applicants come from their business partners, often coaches and trainers. We built an API that allows their business partners to track the status of their referred applicants’ loan award amounts so they can review their income as a partner.
7. Help customers share and communicate results
Similar to tracking results or data in an internal KPI dashboard, your customers might also want to be able to share and communicate data from your SaaS product. Maybe in the sales department, there’s digital signage showing that month’s sales. Or maybe customers need to pull results into a reporting tool they use to generate monthly reports for their clients. Helping your SaaS customers to share results with an API could be an add-on product or something made available in your higher subscription tiers.
8. Reduce your churn rate
A SaaS API can help you reduce your churn rate. The reason is simple. Once a company has committed the resources to integrate with your API, they’re very unlikely to pull the plug on the integration.
Of course, the customer will still need to be receiving value from your product, and they won’t be locked in necessarily. They’ll just be far less likely to stop using your SaaS after people on their team have worked hard to integrate it with their internal systems.
Hear what one founder has to say
"Offering Dynamic Endpoints and Webhooks to our customers in the sales industry, helped them achieve extended interconnection with many other products. This was huge improvement for our product, as we deeply engaged with our customers, allowing us to focus more on sales while keeping existing customers happy.
In the today world of technology, does not matter how many features you have, or how many problems you solve, what matters the most is how deeply can your product integrate and connect with other tools, as there is no escape from using multiple online tools, at some point a running/growing business would have at least 3-4 main Saas products which they use on their day to day routine." - Eriol Gjergii, founder of Flexie CRM
5 SaaS API examples that highlight its power as a product
To really seal the deal on their importance, let’s consider some stellar examples of SaaS APIs that were treated as products.
1. Stripe's developer-friendly payment processing
Stripe has become a leader in payment processing APIs by prioritizing developer experience and scalability. Its API allows businesses to integrate secure payment gateways into their websites and apps, supporting multiple currencies and payment methods. The ease of use, comprehensive documentation, and robust features have made Stripe a go-to choice for businesses of all sizes. The company’s API-first approach has transformed payments into a seamless experience for developers and end-users alike.
Key takeaways:
Focuses on developer-centric design with detailed documentation and SDKs.
Offers global support for multiple currencies and payment methods.
Enables secure transactions with advanced fraud detection tools.
Supports flexible monetization models like subscriptions and on-demand billing.
Scales effortlessly for businesses of all sizes.
2. Twilio's communication APIs for SMS, voice, and video
Twilio empowers businesses to build reliable, scalable communication workflows using its suite of APIs. Whether it's enabling SMS notifications, automating customer support calls, or powering virtual classrooms with video, Twilio bridges the gap between modern apps and telecom networks. Its modular API approach supports diverse use cases, offering flexibility for both startups and enterprises.
Key takeaways:
Modular APIs allow businesses to integrate only the communication tools they need.
Real-time capabilities enable applications like two-factor authentication and live chat.
Extensive global network infrastructure supports seamless scaling across regions.
Comprehensive resources for developers, including tutorials and example code.
3. Shopify's API for e-commerce extensibility
E-commerce merchants leverage Shopify’s APIs to customize and optimize their stores, handling everything from inventory updates to personalized storefront designs. These APIs also enable developers to create integrations that connect Shopify stores with external tools, improving operational efficiency. Additionally, third-party developers use Shopify’s ecosystem to build apps that expand the platform's functionality and drive innovation.
Key takeaways:
Provides tools for inventory management and order tracking integration.
Allows personalized storefront designs to enhance customer experiences.
Powers a robust third-party app marketplace for additional functionality.
Facilitates automation of manual tasks, saving merchants time.
4. Zoom's API for seamless video integration
Zoom's APIs empower developers to embed video conferencing, webinars, and real-time collaboration features directly into their applications. These APIs make it easy to integrate Zoom's robust communication tools while maintaining branding and user interface consistency. By leveraging Zoom’s APIs, businesses can enhance remote work, telehealth, education, and virtual event experiences without building video solutions from scratch.
Key takeaways of this API:
Simplifies embedding video conferencing and webinar features into applications.
Supports high-quality, low-latency video and audio streams.
Allows customization to align with the application's branding.
Facilitates use cases in diverse industries such as healthcare and education.
5. Slack's API for collaborative app integrations
We all know Slack. Teams benefit from enhanced collaboration through APIs that integrate custom workflows, bots, and third-party applications into the Slack platform. These APIs streamline communication by automating routine tasks, delivering real-time notifications, and connecting external tools directly into Slack channels. Developers can use these capabilities to create highly tailored solutions that fit specific organizational needs.
Key takeaways of this API:
Enables automation of routine tasks for improved team efficiency.
Provides integration with numerous third-party productivity tools.
Supports the creation of custom bots and workflows for specific use cases.
Facilitates real-time notifications to keep teams aligned and informed.
How to develop an API when your internal team is swamped
The rise of SaaS apps and SaaS APIs has created a modular approach to software. As long as all of the pieces can interconnect, customers can use them. As long as your SaaS connects to what customers care about, you bring your product to market quickly.
Customers aren’t locked into enterprise applications and developers aren’t locked into certain frameworks (or at least, not we’re not all as locked down as we might have been twenty years ago).
But all of these benefits rely on something pretty key: you have to actually build the API that your customers will pay extra for, or that will entice them into your higher tier plans.
However, SaaS founders and product teams get busy handling their core product. Your backlog is probably already too large for your existing team. You most likely need to hire anywhere from two to twenty developers for your core product, let alone your API.
That’s why it can make a lot of sense to work with an outside team on your API. Here’s how to do this successfully:
Choose a managed team - When outsourcing your SaaS API, you should work with a development firm that handles product management, QA, DevOps, documentation, maintenance—everything. The reason for this is partly because your internal team is too busy as it is, but mostly because a successful SaaS API requires product ownership and leadership. Treating your API as a product will run smoother when you allow someone else to take on the role of owner and manager.
Work with a team that has built APIs - Building a SaaS API isn’t necessarily more complicated in terms of the development work, but there are always hiccups. There’s no substitute for experience. You’ll want a team that knows how to not only build the API but also usable documentation.
Understand the value of the API before engaging - Even though you’re going to vet for a team that is managed and experienced, you should still be able to guide your external team on the value of the API. You should fully understand the need for the API, the value it provides for customers, and the best way to charge for it. That way your API development partner can collaborate with you and improve upon your idea.
Collect feedback and adapt - Key to treating your API as a product worth paying for is getting feedback on it. You wouldn’t sell a product that you hadn’t gotten feedback on, so why do this for an API?
Building a high-value API can result in increased value in a variety of ways. You can increase your amount of affiliate sales or whitelabelled sales, acquire more higher paying customers, or sell the API as an add-on product.
Do you have an idea for a high-value API that will generate revenue? We offer fully managed API development.
