How to Calculate API Development Costs?

Before we explore the cost factors, let’s briefly discuss what API development involves. An API acts as a connector between […]

Before we explore the cost factors, let’s briefly discuss what API development involves. An API acts as a connector between various software applications, enabling them to communicate and share data. When you use a mobile app, it connects to the internet, sends your data to a server, carries out required tasks, and then returns the processed data to you. APIs make this entire process possible.

Creating an API in India provides a cost-effective solution for businesses because of the competitive salaries of software developers, a robust technological infrastructure, and the availability of skilled developers. The lower development and operational costs and the favorable regulatory environment make India an attractive destination for API development.

Table of Contents

  • API Development Cost
  • Cost Factors of the API Development cost
  • Factors that affect the API development cost.
  • Business benefits of developing API
  • Benefits of investing in API development for your software

API Development Cost

The cost of developing an API can vary depending on the complexity of the project, but it usually falls within the range of $10,000 to $50,000. Several factors can influence the cost of API development, including the number of endpoints, data volume, and security requirements. APIs can offer a number of benefits for businesses, including increased efficiency, reduced costs, and improved customer experience.

Cost Factors of the API Development cost Developers cost

  • Designing Cost — 08K To 10K
  • Outsource Software Cost — $15K To 20K
  • Deployment Cost — $10K
  • Integration Cost — $09k
  • Maintenance Cost — $1500 To $4000
  • Project Manager Hourly Cost — $25–49/ Hour

Quality Assurance Team And Testers cost — $5000-$8,000

The largest expense will be the developer’s cost. However, the expertise of developers will also be taken into account; for example, a developer with experience and profound knowledge of programming languages may cost more.

Development procedure

The development procedure compromises the following steps, which are essential to developing a reliable API.

  • Research User
  • Designing Database.
  • Prototyping the Application
  • Launching MVP
  • Examining Traffic
  • Documenting
  • Maintenance Cost.
  • Marketing

Let’s discuss briefly about the factors that affect the cost

Research User

For building any application, research is one of the very essential parts. Many considerations go into designing API. Who will be the audience? What data should be included? These decisions will determine the essentials for your API. These factors influence the team’s research period. Research area where the application will be a success

Designing Database

The Database plays a vital role in API Development. Building a compatible, structured, and symmetrical database will result in API costs. Designing it takes 10 to 15 days.

Prototyping the Application

Once security and data structures are in their final condition, it is time to run the experiment. this step is held before the meeting and MVP.

Launching MVP

The MVP (Minimum Viable Product) is a fundamental product. Launching an MVP of an API excluding additional features is an excellent strategy.

Examining Traffic

Establishing an oversight of an API is necessary. Examine how user traffic impacts the application’s ecosystem. Monitoring traffic’s impact strengthens the solution to any problem.


It is mandatory to ensure that direction and use cases are arranged appropriately. These documents can justify the technicalities of API.

Maintenance Cost

When Building an API, Problems arise due to external attacks, high traffic density, and server breakdown. These problems are generally handled by in-house DevOps engineers.

The factor that affects the API development cost

Many factors affect the cost of developing APIs, such as location, complexity level, region, and many others. Let’s discuss briefly those factors.

Google Maps API

  • Usage: Provides mapping, geolocation, and geospatial data services.
  • Costing: Free tier includes $200 monthly credit. Prices for additional usage:
  • Dynamic Maps: $7 per 1000 requests.
  • Static Maps: $2 per 1000 requests.
  • Directions: $5 per 1000 requests.

Twilio API

  • Usage: Enables SMS, voice, and messaging services.
  • Costing: Pay-as-you-go pricing.
  • SMS: $0.0075 per message sent or received.
  • Voice: $0.013 per minute for incoming calls, $0.02 per minute for outgoing calls.

Stripe API

  • Usage: Facilitates online payment processing.
  • Costing: Transaction-based pricing.
  • 2.9% + 30¢ per successful card charge.
  • International cards: +1% fee.

Amazon S3 API

  • Usage: Provides scalable storage solutions.
  • Costing: Pay-as-you-go pricing.
  • Standard Storage: $0.023 per GB for the first 50 TB/month.
  • Data Transfer: $0.09 per GB for the first 10 TB/month.

SendGrid API

  • Usage: Email delivery and marketing services.
  • Costing: Tiered pricing.
  • Free Tier: Up to 100 emails/day.
  • Essentials Plan: Starts at $15/month for up to 50,000 emails.

OpenWeatherMap API

  • Usage: Provides weather data services.
  • Costing: Tiered pricing.
  • Free Tier: Up to 60 calls per minute.
  • Startup Plan: $40/month for up to 150,000 calls per month.

Firebase API

  • Usage: Backend-as-a-service for app development.
  • Costing: Tiered pricing.
  • Free Tier: Spark plan.
  • Blaze Plan: Pay-as-you-go with prices based on usage (e.g., $0.026/GB for database storage).

Microsoft Azure Cognitive Services API

  • Usage: Provides AI and machine learning services.
  • Costing: Varies by service.
  • Text Analytics: $1 per 1000 text records.
  • Face API: $1 per 1000 transactions.

IBM Watson API

  • Usage: Offers AI and machine learning capabilities.
  • Costing: Tiered pricing.
  • Lite Plan: Free for up to 10,000 API calls per month.
  • Standard Plan: $0.0025 per API call for up to 1 million calls.


  • Usage: Marketplace for various APIs.
  • Costing: Varies by API.
  • Free Tier: Depends on the API.
  • Paid Plans: Prices start at $5/month for certain APIs and scale based on usage.

Here are the basic costing details for Amazon API Gateway:

AWS Pricing Calculator

Free Tier:

  • 1 million API calls for REST APIs, HTTP APIs, and WebSocket APIs.
  • 750,000 connection minutes for WebSocket APIs.
  • Free for up to 12 months for new customers.


  • $1.00 per million API calls for the first 300 million.
  • $0.90 per million API calls for the next 300 million.
  • $0.80 per million API calls beyond 600 million.


  • $3.50 per million API calls.
  • Data transfer out charges apply.

WebSocket APIs:

  • $1.00 per million messages.
  • $0.25 per million connection minutes.

Private APIs:

  • $3.50 per million API calls.
  • VPC endpoint charges: $0.01 per hour and $0.01 per GB of data processing.

Additional Charges:

  • Data transfer out rates.
  • AWS service integration costs (e.g., Lambda, CloudWatch).

For detailed information, visit the Amazon API Gateway Pricing page.

Cost calculation as per company Size

Company size is also the major factor affecting the calculation of API development costs.

Small-Size Company

Manpower: 50–200

Approx Cost:$20,000 to $ 45,000

Medium-Size Company

Manpower: 200–500

Approx Cost: $50,000 to $1,00,000

Large-Size Company

Manpower: 1000+

Approx Cost: $100,000 to $1,500,000

Due to its size and reputation, the development process may be more expensive in a large company than in smaller software development companies. Small organizations are generally more agile and flexible. For instance, they can offer to build a minimum viable product (MVP) first and assess its success before proceeding.

Cost calculation as per company Location

The development company’s location also impacts the development cost of mobile banking applications. According to the lifestyle of each region, the development cost of the application varies:

  • North America hourly cost — $25-$75/hr
  • Europe hourly cost — $50-$100/hr
  • Gulf Countries hourly cost — $70-$120/hr
  • Asia hourly cost — $25-$49/hr

Cost calculator as per Complexity Level

The level of complexity is determined based on the duties, the degree of self-government, and the scope of responsibilities.

  • Low-Level Complexity — $20,000 To $40,000
  • Medium-Level Complexity — $40,000-$60,000
  • High-Level Complexity — $60,000 To $100,000

The cost of building a web application depends on its functionality and complexity. To provide a rough estimate, a simple web app with basic features can cost between $20,000 and $40,000, while a medium web app with more advanced features can range from $60,000 to $100,000.

Business benefits of Developing the API

The primary advantage of utilizing an API is accessing and utilizing data and services from numerous independent sources. This allows organizations of all sizes to access these functionalities without having to develop their own specialized applications.

Ease of integration

An API is a component that enables various platforms, applications, and systems to connect and exchange information with each other to perform different types of tasks. For example, software can be used within another software or integrated with other tools to streamline specific processes.

Better integration

APIs simplify and facilitate integration, allowing different software to reorganize their interrelationships according to your business’s specific needs. By doing so, your company can achieve better results while reducing development costs. Externally, you can integrate your applications with third parties to optimize their functionality and improve usability.

Automating tasks

The integration of applications is crucial for many automation strategies, making APIs indispensable. Integrations automate manual tasks, enabling a seamless transition between connected applications. Automation and process integration can help your business save costs, time, and effort.

Improved services

APIs simplify the implementation of new applications, business models, and digital products and allow for effective integration with third-party products or services, thereby improving their development. For this reason, many developers and entrepreneurs are willing to pay for their use.


APIs play a critical role in digital transformation and the creation of innovative business models. They form the foundation of application economics, enabling faster, better, and more cost-effective development.

Benefits of investing in API development for your software

By investing in API development for your software, you can also generate high income and revenue from your business. Let’s discuss briefly how API is beneficial for investing in it


Investing in API development offers the benefit of improving the functionality and user experience of your software. APIs allow your software to interact with other services and programs, enabling it to access new features and functionalities.

Scalability and Flexibility

Software development benefits from the flexibility and scalability of APIs. Instead of having to rebuild or redesign the entire system, you can easily expand your software by adding new features and capabilities as needed. This means that you can grow your software over time without incurring large development costs, and you can also modify it to meet changing business requirements and user requests.


A standardized interface, provided via APIs, can be used across multiple platforms and computer languages. This allows developers to access the same data or functionality using the same API, regardless of the underlying technologies and systems. This standardization makes it easier to maintain and upgrade software over time, ensuring consistency across various platforms and applications.


APIs can greatly improve efficiency and productivity by allowing developers to reuse code and functionality in new applications. By using APIs to create a standard interface that can be used across multiple platforms and applications, developers can save time and effort. This means they can reuse existing code and functionality instead of creating new code for each new application or platform, ultimately saving time and reducing the potential for errors.


Developing APIs can give you a competitive edge in the market, which is one of the key advantages. You can connect your software with other applications and online services through APIs, providing users with access to new features that set it apart from competing products. For example, if you create a social media management tool, you can utilize APIs from various social media networks to provide a more comprehensive solution than other products.


In today’s digital landscape, APIs (Application Programming Interfaces) play a crucial role in software development. You need to save money, deploy projects faster, and spend more time developing application experiences that enthrall users. Developing APIs can help you acquire a competitive edge in the market, which is one of the key advantages.

With proper planning and execution, APIs can be powerful tools that enhance software applications and drive business growth. If you are also looking to develop an API, consider partnering with reliable API development companies that can provide the expertise and support needed to bring your vision to life.

Scroll to Top