AWS API Gateway provides a powerful tool for creating a coherent API out of multiple disconnected remote function providers, but it introduces latency concerns that can be mitigated with proper configuration and alternative approaches. Common performance issues include cross-region function calls, resource-based versus role-based authentication, encryption/decryption of caches, and cold request starts, which can add hundreds of milliseconds to latency. Workarounds such as co-locating resources, modifying authentication, disabling cache encryption, and keeping serverless functions warm can help reduce the impact of these issues. Alternative approaches include hosting functions on EC2, containerizing serverless functions, evaluating other serverless hosts like Google Cloud Compute or Microsoft Azure Functions, and building a custom web server to bypass API Gateway translation. Ultimately, the choice between using AWS API Gateway with AWS Lambda depends on whether the latency introduced by this approach is too impactful to the user experience.