API monetization models
There are various options when it comes to monetizing your APIs. Enterprises may choose one or more options, depending on their business strategy.
The most widely used monetization options are depicted in the following image:
Let's review each option in more detail.
Free
One of the most common ways to get developers to start using your APIs is to offer a free tier. There are zero charges to be paid by the consumers while using your APIs. This model is suitable when the API made available is a low-value asset or a shared service, and you can rely on other mechanisms to generate revenue.
For example, application developers can integrate with identity providers such as Microsoft, Facebook, or Google to implement OAuth-based authentication within their apps for free. While these APIs are free to use, the providers can attract many users to register with their platform. This gives...