Are you trying to add value to your API? In this post we show you how you can monetize your API using Direct and Indirect Monetization.

The Smart Way to Monetize Your API

Building an API is a tough job. I'm sure you know it. But once you build your API, you'll want to add value to it.

You may have thought about the traditional way of monetizing an API, Direct Monetization. But is there any other way?


Direct Monetization

Direct Monetization refers to charging for a certain action performed by the user. For example, phone companies charge users per SMS sent.

You can charge directly for the use of the API, or include it as a benefit of subscribing to a certain package. It can be a one-time payment or a monthly recurring fee. Plus, you choose whether you want to charge developers or users (or both).

With Direct Monetization you get to choose how much you want to earn.

So that's Direct Monetization. But what about all those free APIs? How can you monetize an API if it is free?


Indirect Monetization

With the Indirect Monetization methods, you'll be adding value to your API in an innovative way. The smart way. And you can do it for paid APIs as well as free ones!

The idea behind Indirect Monetization is to add business value to the API without directly charging the users. 

Let's see some of the most used methods of API Indirect Monetization. 


Developer Retention

The first thing that adds value to an API is the developer retention. The more these developers create around your API, the harder it will be for them to switch to a different platform.  

You should make sure the developers are happy and getting all they need to consolidate your API.


Data Collection

If you allow apps to integrate with your API, you can collect data from those apps and use it (or sell it!). 

The best example of this method is Facebook. Many apps use the Facebook API and send data about the users. Facebook can then use this data to sell ads.


Strategic Partnerships

Do you think your API can't gain value through developer retention and data collection? Then you should consider getting strategic partners.

By integrating your API with a partner, you get a wider audience and a larger use of your API.

Have you ever used PayPal or Payoneer? They are making money by merely being the middleman in a transaction between a seller and a buyer. So PayPal and Payoneer have strategic partnerships with all those sellers.



There are many different methods you can use to monetize your API. Now that you know them, it's up to you to choose the best one.

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