In terms of oracle applications interface is a communication channel that allows the data to move in and out of the system.

TYPES

INBOUND INTERFACES
    The one which allows data to get into oracle application from outside is called inbound interface.

OUTBOUND INTEFACES
    The one which allows data to get data from oracle applications to other systems is called outbound interface.

TYPES OF INBOUND INTERFACE

Open interfaces  -

API  (Application Program Interface)

EDI (Electronic Data interchange) 
    Mainly used for automation transactions with third party systems

XML GATEWAY
    Mainly used for automation transactions with third party systems

WEBADI
    Used for uploading data from excel with the scope to have some validations mainly used for one time loading.

PLSQL Packages for Reading XML Data
    Use this in case of importing non standard transactions

TYPES OF OUTBOUND INTERFACE

Custom programs where we pull data to a csv file using UTL_FILE in the required format
EDI
XMLGATEWAY
PLSQL Packages for generating XML

DIFFERENCE BETWEEN OPEN INTERFACE & API

OPEN INTERFACE
In case of open interface the data is loaded in to open interface table like GL_INTERFACE or Sales Order Interface (OE_ORDER_HEADERS_IFACE_ALL).

Run the interface import program.

This will validate the data and put it into oracle applications. All the invalid records are marked as Error.

One thing is there are GUI Screens available for most of these interface where you check the error message correct it there only and resubmit the interface.

From the technical perspective there are Error tables available for each interface

API
API's are the oracle built packages where the validation logic is wrapped inside a package and the data is passed as parameters to the API.

Most of these api's use the PLSQL tables as parameters to take the advantage of bulk binding concepts for faster loading data.

They will have the two OUT parameters to throw back the error code and message in case of data validation failure

APIs are comparatively faster than open interfaces.

If a API's and open interface are available it is better to load through API's.If the records are more...