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In this video tutorial, Rashid explains the Zip Code Validation API. He mentions that there are many premium API options available, but he found a working free API after much effort. This free API can validate zip codes and provide information such as state, country, and city. The results from the free API are similar to the premium ones. The API is open source, supports multiple countries, and is easy to integrate. By sending a request, you can receive information like postal code, country, state abbreviation, and more.