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In this video tutorial, Rashid explains the zip code validation API. He found a free API that works well and provides the same results as premium APIs. The free API validates the zip code and provides information on state, country, and city. It is open-source, supports multiple countries, and is easy to integrate. The API can be accessed by sending a request and receiving information such as postal code, country, state abbreviation, and other necessary details for zip code validation.