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In this video, Rashid explains the zip code validation API. He talks about the premium APIs that are costly and mentions finding a free API that works well. The free API also provides validation for zip codes, along with state, country, and city information. The results from the free API are similar to premium APIs. The free API is open source, supports multiple countries, and is easy to integrate. Rashid provides an example of how to use the API to validate zip codes.