API an an acronym for Application Programming Interface. This is a common buzzword that allows you to throw words like 'integration' around. APIs are a simple concept: if you write code, you can decide give people access points for outsiders to use your code.
Large organizations often use private, internal APIs to manage data.
Suppose an individual has a Paypal button on thier site that allows you to buy an item online. They, using paypal's API, have "plugged into Paypal." It's that simple. API means precisely what it describes: the interface for using another application. In this example, the other application is Paypal.
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