Third-party APIs are the running cost nobody budgets
Development cost is a one-off. API costs are forever, they scale with success, and they are almost always missing from the original budget. A delivery app doing 40,000 map loads, 10,000 place lookups and 8,000 OTP messages a month is spending several hundred dollars before a single server is paid for.
The pattern is consistent: two or three lines account for nearly the whole bill and the rest is rounding. Find those two lines and you have found your entire optimisation budget.
The four lines that usually dominate
- SMS OTP. At roughly $0.035 per message in the UAE, 8,000 messages a month is $280. Resends and failed deliveries make it worse. Moving verification to WhatsApp or email where regulation allows cuts this dramatically.
- Places and autocomplete. At about $17 per 1,000 requests, an address field that fires on every keystroke is a genuine budget item. Debouncing input and using session tokens can cut it by 80%.
- Payment processing. At 2.9% plus a fixed fee, this scales with revenue rather than usage — which is fine, but it belongs in your margin calculation, not your infrastructure budget.
- LLM calls. Cheap per request, brutal at volume. Prompt caching and routing easy requests to a smaller model typically halve it — see the AI feature cost calculator.
How to actually reduce API spend
- Cache anything that does not change. Geocoding results for a fixed address never change. Store them once. This single change often removes an entire line item.
- Debounce user input. An autocomplete that fires per keystroke costs five times what one firing after a 300ms pause costs.
- Batch where the API allows it. Many providers charge per call rather than per record.
- Set hard budget alerts. Every major provider supports them and almost nobody configures them until after the first surprise invoice.
- Check the free tier before assuming. Several providers include thousands of free calls a month that comfortably cover a small product.
Build the full running-cost picture
API spend is one of three running costs. The others are hosting and maintenance. Price hosting with the AWS cost calculator or the Firebase pricing calculator, then feed the combined monthly figure into the ROI calculator to see what it does to your payback period.
For a product charging users monthly, divide the total by active users. If your API cost per user is more than a few percent of what you charge them, the pricing model needs work before the architecture does.