SFTP vs. API Integrations: Which is Best?

Choosing between SFTP and API integrations can have far-reaching effects on the performance of your application, the efficiency of your operations, and the security of your data.

SFTP (Secure File Transfer Protocol) integration lets you securely and efficiently configure systems to send or receive data files, typically in formats like CSV or flat files. On the other hand, APIs are sets of rules that allow software applications to communicate and interact with each other, and an API integration lets you exchange data following these predefined rules.

This article will help you know which integration method is best for you by comparing SFTP and API integrations on the following parameters:

• Real-time data: the immediacy of data updates between systems
• Openness to human errors: the potential for errors due to manual intervention
• Data coverage: the scope and volume of data that can be transferred
• Integration type: the nature of the integration, whether direct (between two systems) or indirect (involving intermediate systems)
• Data verification: the ability to validate the accuracy and integrity of the transferred data
• Ways to integrate: creating custom integrations or leveraging prebuilt tools such as Apache Camel for SFTP or various API integration tools

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Overview on SFTP Integrations

As an encrypted network protocol, SFTP allows you to access, transfer, and manage files over a secure connection. It's best for you when dealing with large volumes of data that you need to move between systems.

Here's a basic depiction of how an SFTP integration works:

In this architecture, the client (data sender) initiates a secure connection with the server (data receiver) over the SFTP protocol. It then sends the data (often in a CSV or flat file) over this secure connection, and the server receives and processes it.

You have two options for implementing SFTP integrations: building custom integrations or using a prebuilt tool or library that supports SFTP (e.g. Apache Camel). The former gives you the most flexibility in meeting specific requirements, but it also requires the most time, effort, and expertise; while the latter can simplify the integration process and handle many technical details, but they might not offer the same level of flexibility as a custom-built solution.

Related: Comparing unified API platforms with embedded iPaaS solutions

Advantages of SFTP Integrations

SFTP shines in its ability to transfer large volumes of data in one go. This batch processing can be particularly useful when you need to move large amounts of data at once, such as nightly backups or monthly reports.

SFTP integrations typically involve direct, point-to-point data transfers, so it's simple and straightforward. It also provides strong security for your data transfer by using the underlying SSH protocol to ensure that the data you transfer is encrypted and cannot be intercepted or modified during transit.

Disadvantages of SFTP Integrations

However, as mentioned, SFTP also has some downsides.

SFTP integrations are not well suited for real-time data because SFTP operates in a batch-oriented manner, meaning that data files are transferred from one system to another at set intervals, like every hour or once a day.

Suppose your application requires continuous updates, for instance, in applications where the state of data can change rapidly (like stock prices or live sports scores). In that case, SFTP might not meet those needs.

SFTP is also open to human error. It often involves manual tasks, such as creating, formatting, and uploading data files, which can introduce incorrect data entry or improper formatting. If a network failure occurs during transfer, it might also require manual intervention to resume or restart the process, introducing further room for errors.

Furthermore, the data format in SFTP transfers is usually restricted to flat files or CSVs, which might not be ideal if your data has complex structures. In addition, these transfers introduce the additional overhead of file processing. Once the data files are transferred, you need a way to extract and process the data from them, which can add complexity and resource requirements to your data integration pipeline.

While SFTP is simple and straightforward, its one-to-one method can become complex and difficult to manage if you scale and add more systems into the mix. You then typically need to set up and maintain separate SFTP connections for each system pair, which can be cumbersome. Also, while the underlying SSH protocol ensures SFTP is secure, it doesn’t provide any mechanism to verify the actual content of data. If the data file you created has errors or inconsistencies, SFTP cannot detect or rectify them.

Related: What is a flat file integration?‍

Overview on API Integrations

APIs are sets of rules and protocols that dictate how different software applications interact. API integrations connect two or more applications via their APIs, letting them communicate and share data. By providing a structured way for applications to exchange data in real time, APIs open the door to creating dynamic, interconnected systems.

Here's a basic representation of API integration architecture:

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The client sends an API request to the server, which processes the request and sends back an API response. This response is typically structured according to the API specifications, and it can be easily parsed and used by the client application.

API integrations can be direct (one to one) or indirect (one to many). Direct integrations are straightforward but may lack scalability as your application grows. Indirect integrations allow your application to communicate with multiple other systems and promote modularity and scalability. This is especially useful in microservice architectures where each service interacts with others through APIs.

API integrations can be custom-built, where you code the client and server's interactions per the API specifications. While this approach provides flexibility, it can be time-consuming and complex. Alternatively, you can use various prebuilt tools to simplify API integration. For instance, SDKs and API client libraries offer prewritten code to interact with APIs, and platforms like Merge provide unified APIs for easy integration with multiple services.

Related: What you need to know about unified APIs

Advantages of API Integrations

The request-response model that APIs typically follow makes them excellent for handling real-time data—that is, for exchanging data instantaneously or near instantaneously.

When a client application requires certain data, it sends a specific request to the server application. The server processes this request and responds immediately with the corresponding data, ensuring that the client application always operates with the most current data from the server. While the "real-timeliness" of the data depends on some factors—such as the server's ability to process requests swiftly, the network latency, and server load—, applications that require frequently-updated data, like a live weather app or a real-time dashboard, benefit significantly from this characteristic of API integrations.

Since API integrations generally involve automated data transfers in structured formats, like JSON or XML, they have less room for error than the manual processes SFTP relies on.

APIs also have the advantage of fine-grained data access, allowing clients to request specific data they need instead of receiving a full data dump. For example, suppose your application needs only a user's email address from a user database. In that case, you can design the API to fetch just that information.

Lastly, in API integrations, not only is the data kept secure during transit, which is similar to SFTP, but there's also an added layer of validation for incoming data. The server can verify the integrity, accuracy, and adherence of the data to a predefined structure, such as a JSON or XML schema, ensuring that the data your application receives and processes are correct and meaningful. This extra level of validation is a critical benefit that SFTP, which primarily ensures data is not tampered with during transit, doesn't inherently provide.

Related: The top benefits of unified APIs

Disadvantages of API Integrations

While APIs offer many advantages over SFTP, it's not to say that it's always better.

If you must transfer massive volumes of data simultaneously, APIs will likely require more computational resources and bandwidth than SFTP, making the process slower and more resource-intensive. In that case, SFTP will be the better option.

APIs also highly rely on HTTP(S) for communication, which means they need a reliable internet connection. In contrast, SFTP can work in more constrained network environments and can recover more gracefully from network interruptions.

Finally, it can be complex to set up and maintain API integrations in-house. APIs are usually specific to each software application and may require detailed knowledge of the application's functionality and the API's structure.

Final thoughts

SFTP integrations offer a robust and secure method for batch-based data transfers, making them a popular choice when transferring large data files regularly. However, they are complex to scale, susceptible to human errors, and not great for real-time data updates.

In contrast, API integrations excel in facilitating real-time data exchange, offering fine-grained data access, automating data verification, and reducing the likelihood of human errors. Additionally, their high scalability makes them a preferred choice for applications that need to interact with numerous 3rd-party systems dynamically.

If you want to simplify and accelerate your API integration process—in the context of product integrations—, consider Merge. Its unified API allows you to bypass the challenges of integrating multiple disparate APIs with your product, saving precious time and resources and allowing you to concentrate on developing your core product. You can sign up for free to try it out.

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