Note: This is a part of our API Security series where we solve common developer queries in detail with how-to guides, common examples, code snippets and a ready to use security checklist. Feel free to check other articles on topics such as authentication methods, rate limiting, API monitoring and more.
Authentication and authorization are fundamental concepts in API security. These methods are pivotal in safeguarding data, preventing unauthorized access, and maintaining the integrity and privacy of the information exchanged between applications and their APIs. Let’s discuss these in detail.
API Authentication
Authentication is the process of verifying the identity of a user or system trying to access an API. It ensures that the entity making the request is who they claim to be.
Strong authentication mechanisms, such as API keys or OAuth tokens, are crucial because they provide a secure way to confirm identity, reducing the risk of unauthorized access.
API Authorization
Authorization, on the other hand, comes into play after authentication and determines what actions or resources a user or system is allowed to access within the API.
This is where role-based access control and granular authorization shine.
They allow you to define fine-grained permissions, restricting access to only the necessary functions and data, minimizing potential risks.
Knit now allows role-based access control through its User Management feature where you can decide who gets access to what while ensuring managing the health of your integrations as a team via the same dashboard.
Two Factor Authentication 2FA
Two-factor authentication (2FA) adds an extra layer of security by requiring users to provide two forms of identification before gaining access, typically something they know (like a password) and something they have (like a mobile device or security token).
It significantly enhances security by thwarting unauthorized access even if login credentials are compromised.
Best API authentication protocols
API authentication protocols are the gatekeepers that ensure only authorized users and systems gain access to the valuable resources offered by these APIs.
In this article, we will explore some of the best API authentication protocols that provide both developers and users with the confidence that their data and interactions remain protected in today’s interconnected world.
There are various methods you can use to ensure secure authorization to your API, each with its own strengths and use cases. Below are some of the widely used and effective authentication protocols that you can choose from based on your use case:
P.S. We have included a comparison chart later in this post for you. Keep reading!
1. OAuth (Open Authorization)
OAuth is an industry-standard authentication protocol that allows secure access to resources on behalf of a user or application.
It is commonly used to grant third-party applications limited access to user data from other services(such as social media platforms or cloud storage) without exposing user credentials with the third party.
The core concept of OAuth is the access token. Access tokens are short-lived, temporary credentials that are issued by an OAuth authorization server. These tokens grant limited access to specific resources on the user's behalf. They are used to authenticate and authorize API requests.
It also allows for the specification of scopes, which determine the level of access granted to an application. For example, an application might request read-only access to a user's email or the ability to post on their social media feed.
2. Bearer tokens
Bearer tokens are a simple way to authenticate API requests. They serve as proof of authorization and grant access to specific resources or services. They are typically long, random strings of characters that are generated by an authorization server. They can be cryptographically signed to ensure their integrity and validity.
They are stateless, meaning the server or API that receives the token doesn't need to keep track of the token's status or maintain any session state. The token itself contains the necessary information to determine the scope of access.
A bearer token is included in the request header, and if it's valid, the request is processed without the need for further authentication. It's crucial to protect bearer tokens, as anyone with access to them can use the API.
3. API keys
API keys are often used for authentication, especially for server-to-server communication.
They are a form of secret key that must be included in the API request header to gain access. While simple to implement, they should be handled securely to prevent misuse. They should never be hard-coded into publicly accessible code or shared openly. Instead, they should be stored securely, often in environment variables or a configuration file.
API keys often come with usage limits to prevent abuse. This helps ensure fair use and protects the API server from overloading due to excessive requests from a single key.
4. JSON Web Tokens (JWT)
JWTs are a popular authentication method because of their simplicity, portability, and flexibility. It is a token-based authentication method, as it relies on the exchange of tokens for authentication rather than traditional methods like username and password.
JWTs consist of three parts: a header, a payload, and a signature. The header specifies the type of token and the signing algorithm used. The payload contains claims, which are statements about the user or application. Claims can include user identification, roles, and more. The signature is generated using the header, payload, and a secret key, ensuring the token's integrity.
They can also be configured to include expiration times claims, which enhances security by limiting the token's validity and ensuring it is used only for its intended purpose.
The compact, self-contained nature and support for open standards of JWTs makes them suitable for modern microservices architectures and APIs that require decentralized identity and access control.
5. Basic authentication
Basic Authentication involves sending a username and password in the API request header in the form of Base64-encoded credentials. Base64 encoding is used to obscure the credentials during transmission, however it's not a secure encryption method, as the encoded string can be easily decoded.
To enhance security, it's crucial to use HTTPS (TLS/SSL) to encrypt the entire communication between the client and the server.
While straightforward, it is not the most secure method, especially if not used over HTTPS, as credentials can be easily intercepted.
To summarize:
Choosing the right protocol depends on your specific use case and security requirements, but it's always essential to prioritize strong authentication and granular authorization to safeguard your API effectively.
Make authentication easier
Knit, being a unified API, takes care of all your authentication needs for all integrated accounts. Here's what you can expect from Knit:
- Effortless Authentication: Say goodbye to writing and maintaining authentication code for apps in our catalog. Knit takes care of it all.
- Support for all auth mechanisms: Knit provides robust support for various authentication mechanisms such as basic authentication (username/password), OAuth authentication, API key based authentication. We also handle additional API parameters, such as tenant details and admin IDs, streamlining your integration process.
- Enhanced Token Security: Your data security is our priority. Knit employs double encryption for tokens. We encrypt data at the database level using AES256 and at the application level using AES128. Learn more
- Robust Token Management: Knit automates the refreshing of tokens, removing worries about access token expiration and access scope management.
- Parameter Handling: Knit takes care of handling extra API parameters such as tenant information and admin IDs, simplifying the integration process
- Pass-though API: For apps lacking standard APIs, Knit provides a pass-through API, seamlessly managing authentication, making it easier to work with supported applications.
If you are building multiple integration, unified APIs like Knit can dramatically free up your bandwidth by allowing 1:many connection — with just one API key, you can seamlessly integrate with 50+ application across HRIS, ATS, CRM and Accounting. With an API aggregator like this, the time you would spend building and maintaining your integrations can come down to just a few hours from few weeks or even months.
If ready to build, get started for free or talk to our team to learn more
Frequently Asked Questions
Q1: What is API authentication?
API authentication is the process of verifying the identity of a client or application before granting it access to an API's resources. It answers the question "who are you?" - establishing the caller's identity using credentials such as an API key, access token, or cryptographic certificate before any data is returned or action taken.
Authentication is the first layer of API security. Once identity is confirmed, authorisation determines what the caller is allowed to do. Without authentication, any application could call your API and access sensitive data unchecked.
When building integrations with third-party SaaS platforms, Knit handles authentication with each connected provider on behalf of your customers - managing credential exchange, token storage, and rotation so your integration code never holds raw credentials.
Q2: What is the difference between API authentication and API authorization?
Authentication verifies identity - "who is making this request?" - by checking credentials such as an API key, OAuth token, or certificate. If authentication fails, the request is rejected before any resource access occurs.
Authorisation verifies permissions - "what is this caller allowed to do?" After authentication succeeds, the API checks whether the identity holds the right permissions for the requested resource or action. A successfully authenticated caller can still be unauthorised for specific endpoints or data.
Both operate together in practice. OAuth 2.0, for example, handles both: the flow authenticates the user and issues an access token that carries authorisation scopes defining what the token holder can read or write.
Knit manages both layers per integration - authenticating to the provider's API and enforcing customer-scoped access so your product only receives data the customer has explicitly authorised.
Q3: What are the most common API authentication methods?
The five most widely used methods are:
OAuth 2.0 - the dominant standard for enterprise SaaS APIs. Enables delegated access without sharing passwords; used by Google, Microsoft, Salesforce, and most HRIS/CRM platforms.
API keys - unique strings passed in headers or query parameters. Simple to implement; suitable for server-to-server calls from a single trusted application.
JWT (JSON Web Tokens) - signed, self-contained tokens encoding claims. Stateless and efficient; commonly used as the token format within OAuth 2.0 flows.
Basic authentication - Base64-encoded username:password in the Authorization header. Simplest method; should only be used over HTTPS for internal or legacy APIs.
Bearer tokens - HTTP authorisation scheme where an access token is passed as a header value; used as the delivery mechanism for OAuth and JWT tokens.
Most modern enterprise platforms use OAuth 2.0. Knit handles OAuth flows for all supported integrations, so your application never manages token exchange or refresh directly.
Q4: Which authentication method is most commonly used for APIs?
OAuth 2.0 is the most widely adopted API authentication and authorisation protocol. It powers access to Google, Microsoft 365, Salesforce, Workday, HubSpot, and most enterprise SaaS platforms — wherever a user must grant a third-party application access to their account without sharing their password.
For simpler cases - internal services, developer tooling, read-only pipelines — API keys remain common due to ease of implementation. However, API keys don't support user-level scoping, making them unsuitable for customer-facing integrations where different users need different permissions.
JWT is frequently used alongside OAuth 2.0 as the access token format. Basic auth is generally limited to legacy or development environments. For customer-facing SaaS integrations where your product connects to your users' third-party accounts, OAuth 2.0 is the standard.
Q5: How does OAuth 2.0 work for API authentication?
OAuth 2.0 (defined in RFC 6749) is an authorisation framework allowing users to grant a third-party application access to their account - on a service like Google or Workday - without sharing their password.
The Authorization Code flow works as follows:
Your app redirects the user to the API provider's authorisation server.
The user authenticates and approves the requested permission scopes.
The authorisation server returns an authorisation code to your redirect URI.
Your app exchanges the code for an access token (and typically a refresh token).
The access token is included as a Bearer token in subsequent API requests.
Access tokens are time-limited (typically 1 hour). Refresh tokens allow your app to obtain a new access token without user interaction when the original expires.
Knit handles the complete OAuth 2.0 flow for all supported platforms — token exchange, storage, and automatic refresh — so your integration calls Knit's unified API rather than managing each provider's OAuth endpoint separately.
Q6: What is JWT and how is it used for API authentication?
A JSON Web Token (JWT), defined in RFC 7519, is a compact, signed token that encodes claims — such as user ID, expiry time, and authorisation scopes - in a Base64URL-encoded JSON payload.
A JWT has three parts: header (algorithm and token type), payload (the claims), and signature (generated with the issuer's private key or shared secret), joined as header.payload.signature.
In API authentication, a server issues a JWT after verifying credentials. The client includes it in the Authorization header (as a Bearer token) on subsequent requests. The API validates the JWT by verifying the signature - no database lookup required - making JWTs well-suited for stateless, distributed architectures.
JWTs are commonly used as the access token format within OAuth 2.0 flows. Security considerations: set short expiry (exp claim), use asymmetric signing (RS256 or ES256) in production, and avoid storing sensitive data in the payload since it is encoded, not encrypted.
Q7: When should you use API keys vs OAuth 2.0 for API authentication?
The choice depends on whether your integration acts on behalf of a specific user or operates as a trusted server-to-server call.
Use API keys when:
All requests originate from your own server with a single identity
You're integrating with developer tools, analytics APIs, or internal services
The API provider doesn't offer OAuth (common with simpler or legacy APIs)
Use OAuth 2.0 when:
Your integration accesses data on behalf of individual users (customer-facing integrations)
The API requires user-level permission scoping
You're connecting to enterprise SaaS platforms - Salesforce, Google, Microsoft, Workday, HubSpot all require OAuth for customer-facing access
Most HRIS, CRM, ATS, and accounting APIs in B2B SaaS integrations require OAuth 2.0. Knit handles OAuth flows for all supported platforms, removing the need to implement per-provider OAuth logic in your codebase.
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