At a glance:
- Xero will begin charging developers for API access from March 2026.
- The move will raise costs for developers using Xero data in their applications.
- Accountants will likely face higher subscription costs for their connected apps.
- Developers criticise the change, saying it stifles innovation and penalises customers.
Xero has announced that it will begin charging third-party software companies for access to its API, or application programming interface. The move will raise costs for many developers that use Xero data, likely forcing them to raise costs for accountants.
The API is the critical connector that shares data in one program – here, Xero – with other applications.
Accountants are widely expected to feel the impact in rising subscription costs across the app stack, from reporting apps to proposal software and expense management systems.
The change, set to take effect in March 2026, represents a fundamental shift in how Xero charges its app partners. Previously, developers paid a fee only when they acquired a new customer through Xero’s App Store.
Under the new model, fees are based on the data used by all customers, existing and future, regardless of how those customers found the app.
In effect, Xero is vastly widening the pool it charges against, moving from incremental growth to the full installed base.
The timing of the pricing change is notable: Xero has implemented a series of annual price rises since 2022. A full subscription, including multicurrency, has nearly doubled in 10 years, from $55 a month to $100 a month. Now, with API charges layered on top, the total cost of running a Xero-based tech stack is set to increase once again.
The decision has drawn strong criticism from software developers. Some of those developers built their businesses around Xero’s original promise that the API would remain free. Developers say that change will sharply increase costs and leave them little choice but to pass those on to users.
Stephen Edginton is chief product and technology officer at bookkeeping automation developer Dext. “It’s a shame there was zero discussion ahead of such abrupt changes,” he wrote on LinkedIn. “These costs will ultimately be paid by end customers as another tax – which many businesses will struggle with.” Small businesses are already required to pay to access a mounting number of SaaS apps.
Xero’s latest pricing move also raises a broader question of whether Xero has decided it has reached scale in some markets and is now shifting from growth to monetisation. That in turn raises issues for entrepreneurs and developers considering the next wave of innovation in the Xero ecosystem.
Which apps?
In a written response to questions, a Xero spokesperson said the new structure was designed to be clearer and easier to forecast as app partners scale.
A free Starter tier will be available for early-stage developers. However, that tier doesn’t give access to key parts of Xero’s database such as the journal.
Xero is exempting five key categories of apps from the new pricing model:
- custom integrations built by accountants and bookkeepers for their own practice or a single client;
- custom connections, which will remain on their existing commercial terms;
- financial services applications in banking, credit and payments, which operate under separate contracts;
- apps by conversion partners, which solely migrate data from other accounting platforms into Xero; and
- franchise apps designed specifically for use within franchise networks.
Xero did not answer a key concern raised by partners: that developers will be forced to pass on the new API charges to their customers, effectively making Xero users pay twice – once for their Xero subscription, and again through higher prices for connected apps.
Xero didn’t provide figures on how many apps currently connect to its platform via the API, or on how many are listed in the App Store (a far smaller number). This makes it difficult to gauge how widely the new fees will apply, or which parts of the ecosystem will be most affected.
Developers resist
Xero’s relationship with third-party developers has long been central to its growth strategy – and a source of tension. Founder and former CEO Rod Drury regularly encouraged developers to “ride the coattails” of Xero, promising access to a fast-growing customer base of small businesses eager for cloud-based tools. At the heart of this pitch was free access to the Xero API: developers could pull customer data into their own software to create new services.
But the promise of openness began to fray as early as 2016, when Xero allegedly asked its top 20 app partners to start paying for API access. The push was quietly abandoned after strong resistance from the ecosystem.
A second attempt came around 2020, according to Nick Houldsworth, who led Xero’s ecosystem strategy from 2017 to 2022.
“Shortly before I joined, Xero tried to introduce this model. The backlash was huge,” he says. After that, Xero shifted direction. Xero’s then-CEO and founder Rod Drury asked him to rethink the strategy.
That rethink led to the App Store model – a revenue‑share arrangement with fees paid only when Xero delivered customers to a partner. “It wasn’t perfect, but it aligned incentives,” says Houldsworth. “You don’t penalise developers for building value into your platform.”
Houldsworth is now a software developer himself, as co‑founder of accounting platform Prosaic, which integrates with Xero.
Charging for API access amounts to double‑dipping, he argues: developers will need to pass on the cost to customers. “The customer is already paying for Xero. If you then charge a developer to access that customer’s data, you’re effectively charging (the customer) twice.”
Houldsworth notes a deeper contradiction too. Xero has long argued – in open banking debates in markets such as New Zealand – that customer data belongs to the customer, and banks should provide API access without fees.
“Xero benefits from free bank APIs on that principle,” Houldsworth says. “Now it’s turning around and charging developers for access to that same customer data held in Xero.”
(When asked why Xero was charging for API access when it benefited from free transactions under open banking, Xero chose not to respond.)
Dampening enthusiasm
Houldsworth says that even if Xero rides out the discontent of its developer partners, charging for API access could harm its ability to attract younger software entrepreneurs.
Xero’s early momentum came from small, inventive software companies betting on an open platform. Metered fees on core APIs dampen that enthusiasm.
“You narrow the ecosystem. You get fewer ideas, fewer experiments,” Houldsworth says. “That’s how you lose the next wave of innovation – and that’s what built Xero in the first place.”
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