iPaaS vs. API: Which is best for your product integration strategy?

Businesses today use dozens of different software applications, making integrations table stakes for modern buyers. This is especially true in the employment sector, where HRIS and payroll systems act as the employer’s source of truth, holding valuable information that other B2B applications need to function.?

Building integrations in-house is resource-intensive and costly, so developers have begun turning to new tools like unified APIs and embedded iPaaS to quickly launch multiple integrations and outsource ongoing maintenance. So which of these tools — iPaaS vs. API — is right for your organization?

The answer is, of course, it depends. Each solution has its own pros and cons depending on your needs, resources, and budget. We’ll break down the ways each approach differs in function, implementation, maintenance, and cost and share helpful considerations when deciding which will better suit your needs.

Unified API vs. iPaaS: What’s the difference?

A unified API is a tool that aggregates and normalizes data from multiple systems or data sources, then delivers that data to a single endpoint. Unified APIs have pre-built integrations with dozens or hundreds of systems. The data is pulled from each platform to the central API, standardized, then pushed to your application. You only need to build one integration—to the provider—to unlock access to all of their supported platforms.

Key benefits of unified APIs include a single point of access, faster time to launch, normalized data formats, and a consistent, high-quality user experience—plus scalability and robust security controls. Since your team doesn’t need to build integrations to each individual system, you also benefit from a much higher ROI per integration, and your developers can focus on improving your core product, instead of investing countless hours into building 1:1 integrations.

In contrast, embedded iPaaS solutions are low-code, connector-based platforms that integrate applications and data across different systems. These platforms offer pre-built integration frameworks for various software designs and provide middleware that facilitates fast and secure data exchange. They also allow for customizable workflows and connectors.?

It’s worth noting that there are general iPaaS solutions and embedded iPaaS solutions: while the former integrates systems within a company, embedded iPaaS platforms enable developers to build and manage customer-facing integrations between their own company’s products and third-party systems.?

To put it simply, unified APIs are a means of outsourcing all the work of building and maintaining integrations with a wide array of platforms. Embedded iPaaS, on the other hand, is a marketplace tool that provides the basic rails for an integration, but it’s up to your development team to customize and complete the connection.

To decide which solution is better for your needs, you’ll need to consider the nuanced differences between the ways unified APIs and embedded iPaaS are used.??

Depth of data coverage: iPaaS vs. API

Unified APIs tend to focus coverage on commonly used data attributes. As a result, horizontal APIs often have limitations when it comes to accessing deeper or less common data points. However, verticalized APIs like Finch offer a deeper level of data granularity that is tailored to specific industries and use cases—in our case, employment technology.?

Horizontal vs. Vertical Unified APIs

Unified APIs fall into one of two categories: horizontal and vertical. Horizontal unified APIs connect systems with different core functions like GTM and Product software, while vertical unified APIs focus on a single category, like HRIS and payroll systems.

Learn more about the differences →

Embedded iPaaS solutions offer extensive coverage across a wide range of applications and data sources. But since each integration must be built separately, they require more development work and significant technical expertise.?

Bottom line: Unified APIs offer breadth and depth of coverage for standard data sets, while embedded iPaaS is better suited to providing comprehensive access to custom data fields or unique data sets.?

Data standardization: iPaaS vs. API

Data standardization refers to formatting data from disparate sources, each with their own field naming conventions, into a single, uniform standard so it’s always ingested into the end system the same way. It can save users a significant amount of time, reduce the chance of errors, and allows for automated workflows where data flows seamlessly from system to system.

Bottom line: Most unified APIs offer a single, standardized data format. This makes data handling much more straightforward because data models are always presented consistently, regardless of the data’s origin. This functionality is present in some embedded iPaaS tools, but not all.?

Further reading

?? Read our complete guide on iPaaS vs. API for a complete breakdown on:

?? Development effort required: iPaaS vs. API

?? Integration flexibility: iPaaS vs. API

?? Scalability: iPaaS vs. API

?? Integration maintenance: iPaaS vs. API

?? Data security: iPaaS vs. API

?? Use cases: iPaaS vs. API

?? Unified API vs. iPaaS: Which should you use?