How does serverless architecture handle third-party API calls?

Serverless architecture handles third-party API calls by executing them within short-lived, event-triggered functions. When a serverless function (like AWS Lambda or Azure Functions) is invoked, it can send HTTP requests to external APIs using standard libraries or SDKs. The function waits for the API response, processes it if needed, and then terminates. Since serverless platforms manage infrastructure, scaling is automatic: if many requests occur, the provider spins up more function instances to handle concurrent API calls. For example, a serverless function might call a payment gateway API like Stripe to process a transaction, wait for a success/failure response, and then update a database.

However, serverless functions have execution time limits (e.g., 15 minutes on AWS Lambda), so long-running API calls require careful design. To avoid timeouts, developers often implement asynchronous patterns. For instance, a function might send an API request and offload the response handling to a message queue (e.g., Amazon SQS) or event stream (e.g., AWS EventBridge). If the third-party API supports webhooks, the function could trigger the API and let the external service send results to a predefined endpoint later. Error handling is critical: retries with exponential backoff help manage rate limits or temporary API outages. Tools like AWS Step Functions can orchestrate retries across multiple functions without manual coding.

Security and observability are key considerations. Serverless functions must securely store third-party API keys, often using environment variables encrypted with services like AWS KMS or Secrets Manager. Network configurations (e.g., VPCs) may be needed if the API requires whitelisted IPs. Logging and tracing tools (e.g., CloudWatch or X-Ray) help monitor latency and errors in API calls. For example, a weather app using serverless might call a meteorological API, log response times, and alert if latency exceeds thresholds. Developers must also validate and sanitize API responses to prevent injection attacks or data leaks, ensuring compliance with security policies.