An API is an interface through which two programs talk to each other directly, without a person clicking in between. The abbreviation stands for application programming interface. With AI, it means that instead of you typing into a chat window, a piece of software sends its question to the model and gets the answer back, billed by usage.
My fourteen AI employees run on Claude Team, some also on open models or through the API. One of them works directly on the API of my bookkeeping software. More basics on AI in day-to-day business are collected on my AI Basics page.
What an API is
Picture a restaurant. You don't walk into the kitchen yourself, you order from the waiter. The waiter knows the menu, takes your order to the kitchen and brings the food back. An API is that waiter between two programs: one program orders, the other delivers, and both stick to the same menu.
Four things are always part of it:
- The request. One program asks for something, for example "give me all invoices from October" or "answer this customer email".
- The response. The other program sends back the result, usually in a fixed format that machines can read easily.
- The rules. The provider describes in its documentation exactly which requests are allowed and what they must look like. That is the menu.
- The key. So that not just anyone can order, the requesting program identifies itself with an API key. More on that below.
"Interface" is the general term for any point where two systems exchange data. The API is the interface for programs.
Everyday examples
You probably use APIs already without noticing:
- Bank and bookkeeping. In Lexware Office, the German bookkeeping tool, transactions and balances arrive through your bank's XS2A interface. You only enter your online banking access, the programs do the rest. I describe the different routes in Lexoffice Integration: The Main Routes.
- Shop and payment. An online shop asks the payment service whether a payment went through and then shows "order confirmed".
- Appointment and calendar. A booking tool puts an appointment straight into your calendar.
- AI. A program sends a text to a language model and gets a summary back, without anyone opening a chat window.
In my business, Anton, my AI employee for quotes and invoices, does exactly this kind of job: through the Lexware Office API he creates the contact, quote and invoice, but only as a draft. Approving and sending is up to me.
App or API: the difference with AI
Many beginners trip over this point: an AI subscription and the same company's API are two different ways in.
At Anthropic, the company behind Claude, the API lives in the Claude Console, a separate area next to the chat app. Anthropic's documentation lists prices per million tokens. A token is a small piece of text for an AI, sometimes a word, sometimes only a syllable. Since 7 October 2026, the Max and Team plans include a monthly credit for the API; Free, Pro and Enterprise do not. The details are in Claude API Key: Setup, Pricing, First Call.
What an API key is and why it stays secret
An API key is a long password for programs. Whoever has it is indistinguishable from you as far as the provider is concerned. Anthropic compares it to a credit card number: whoever uses the key runs up charges on your bill.
A few rules follow from that:
- Never in a chat, an email or a shared document. Anthropic says the key should never be included directly in code or configuration files.
- Store it safely right away. The Claude Console shows a new key exactly once. If you lose it, you create a new one.
- Only the permissions it needs. Where the provider allows it, each key gets only the permissions for its one job. Lexware Office offers individually set permissions for this.
- Revoke it if in doubt. A revoked key is a small nuisance, a misused one can get expensive.
In my setup, API keys are stored encrypted and only decrypted during setup. How exactly is described in my article on the Claude API.
What MCP has to do with it
You may have come across the abbreviation MCP. According to its own description, the Model Context Protocol is an open-source standard for connecting AI applications to external systems. Its makers compare it to a USB-C port for AI applications. An MCP server connects the AI to one particular service. For you, that means the AI can look things up in your calendar or bookkeeping itself, instead of you copying everything into the chat. How to set that up is in Set Up a Claude MCP Server.
Do you need an API as a beginner?
Usually not. For texts, summaries and research, the chat app is enough. An API becomes interesting when
- you want to build a small program of your own or a fixed routine that runs without you,
- a tool explicitly asks you for an API key, such as an automation service,
- you want to build AI into software that your customers use.
What to watch out for
- Set a spending cap. With usage-based billing, a loop in a program can get expensive quickly. For your own projects I recommend a separate area with a spending limit.
- Read the provider's documentation. It tells you what is allowed, what it costs and which permissions a key gets.
- Think about the data. Whatever goes through the API ends up with the provider. Customer data belongs only in tools where the contract and data protection are settled.
- Let important steps run as drafts. If a program creates invoices through an API, you check them yourself before they go out.
Frequently asked questions
What does API mean, in simple terms?
API stands for application programming interface. It is the agreed way in which one program can ask another for something and get an answer, without a person clicking in between.
What is an API key?
A long, secret password that a program uses to identify itself to an API. Whoever has the key can send requests in your name and run up costs. That is why it belongs in a secure store, never in a chat or an email.
Is an API the same as an interface?
Almost. Interface is the general term for any connection between two systems, including something like a file export. An API is the interface through which programs talk to each other directly.
Does an API cost money?
That depends on the provider. AI APIs such as Anthropic's bill by usage. With other services, API access is tied to a particular plan; at sevDesk, for example, to the Buchhaltung Pro plan, as I describe in sevDesk Interfaces: API and Integrations.
Do I need programming skills for an API?
To work with an API directly, usually a little. Many tools take that off your hands, though: you just enter the key, and the tool talks to the API.
Where to go from here
Look in a tool you already use for the keyword "integrations" or "API". There you can see which programs it already talks to. Which routines are suited to this in the first place is in What Is a Workflow? Simply Explained. If you want to build small programs yourself with AI, read next what vibe coding is about. If you want to start with Claude Code right away, the key commands are in Claude Code Commands: The 15 You Need. You will find every AI term explained briefly in my AI glossary. How others connect their tools is what we discuss in my community Claude Practitioners.
