While Authentication and Authorization protect access to the API, Encryption protects the data itself as it travels across the internet. Without encryption, anyone intercepting the traffic (on public WiFi, at the ISP level, etc.) can read your API Keys, passwords, and sensitive user data in plain text.
Do not support HTTP. Redirect all HTTP traffic to HTTPS, or better yet, use HSTS (HTTP Strict Transport Security) headers to tell the browser "Never try to talk to me over HTTP again."
For highly sensitive, internal, or B2B APIs (e.g., Open Banking), standard HTTPS isn't enough.
Standard HTTPS: Client verifies Server.
mTLS: Client verifies Server AND Server verifies Client. The client must present its own certificate. This is one of the strongest forms of authentication available.