API Pricing to Help You Connect With Your Customers

This is probably the most popular API pricing model. Here, API users pay according to their actual usage of the API. There’s no set or fixed fee. This makes this model attractive as if the API is only occasionally used, it doesn’t cost as much.

Pay-per-use and pay-per-call are prime examples of the pay as you go API pricing model. In the case of the latter, the user is charged whenever an API gets a request and retrieves the corresponding data.

The fixed API pricing model is also sometimes known as a subscription-based model. It’s adopted by some software as a service (SaaS) companies that provide APIs. 

Under this model, API users are charged a flat fee, usually on a monthly or annual basis. That fee doesn’t change, regardless of API usage. However, sometimes, API providers will place restrictions or caps on usage. 

When these kinds of quotas are part of an API pricing arrangement, once a user has reached the limit of their API use for a month or year, they can’t carry on using it until the next billing period.

Fixed API pricing is generally attractive to users who expect to get heavy usage out of APIs. It also has the advantage of giving both users and providers greater clarity on what they’ll spend or be paid.

The tiered or overage API pricing model is in many ways an evolution of the fixed API pricing model. 

Users are still charged a monthly or annual fee, and this time, usage quotas are applied as standard. In this case, however, users don’t have to wait until the next billing period to keep operating the APIs once they reach their quota. Instead, they’re then charged on a pay as you go basis for any usage beyond the initial limit. 

The tiered element of this model comes from the fact that API providers will typically offer a range of pricing tiers. Each will come with a different monthly or annual fee and a varying usage quota. The higher the fee, the higher the quota. It’s then up to each user to determine which tier best suits their needs.

This is perhaps better described as a possible addendum to any of the above API pricing models, rather than a model in of itself. It’s worth discussing briefly, however, due to its inherent benefits for both users and providers. 

When API providers offer a free trial, prospective users get to directly experience the APIs and their potential benefits. That works well to convince them that they’re worth the investment—arguably more so than any sales call or demo ever could.

In general, free trials will last for a set period of time or give a certain amount of usage. After which, the trial user will need to switch to an offered pay as you go, fixed price, or tiered pricing plan.

API stands for Application Programming Interface. An API is a connection mechanism which allows two software components or applications to work together. It defines and manages how the applications communicate with one another in terms of requests and responses. For an end user, APIs work to combine the functionalities of otherwise distinct applications.

Pricing API development and creation is tricky. There are many factors that can determine the exact costs involved in the process. Things such as the complexity involved and, therefore, the level of expertise necessary, security considerations, and the volume of data involved. In general, however, you’re looking at thousands rather than hundreds of dollars to build an API from scratch.

Yes, there are free APIs that developers can use without any charge within their projects. These are sometimes known as public or open-source APIs. Some API providers also offer free trials of APIs, such as Vonage’s Communication APIs to let prospective users experience the benefits of the APIs first hand, for no charge.

Vonage’s API pricing differs depending on the API in question, but is based on usage. Meaning, you only pay for what use you get from the API. In the case of the Voice API, for example, that means you pay per minute for the calls made and received via the API. The exact amount depends on the nature of the call; whether it’s domestic or international, PSTN or VoIP, etc.