Webhooks Vs. API: A Detailed Comparison


Application programming interfaces (APIs) and webhooks have become integral parts of modern software architecture and development. Both APIs and webhooks enable different applications to communicate with each other. However, there are some key differences between these technologies that developers need to understand. This article provides an in-depth comparison of APIs and webhooks, when to use each, and examples of how they work.

What is an API?

An API (Application Programming Interface) is a set of protocols, routines, functions and tools that enables software applications to interact with each other. APIs establish a clear structure for communication between different programs.

For example, let‘s say you are building an e-commerce app. Your app needs to interface with a payment processor in order to collect money from customers. The payment processor offers an API that allows your app to securely send customer payment details and confirm whether transactions were approved or declined. The API provides all the necessary protocols and data structures for this communication to take place.

Some key characteristics of APIs:

• APIs enable applications to exchange data and functionality.
• Communication is bi-directional (two-way). The requesting app makes calls to the API, and the API responds.
• APIs use structured request-response messaging patterns. The requesting app sends a properly formatted request, and the API returns an appropriate response.
• APIs typically use HTTP/HTTPS protocols and REST architectural style. But other protocols like RPC and WebSocket are also used.
• APIs are discovered and accessed through documentation.

Overall, APIs provide a standardized way for different software programs to integrate together despite being built on different languages and platforms.

What are Webhooks?

Webhooks are user-defined HTTP callbacks. They enable applications to communicate real-time data to other applications as events occur.

For example, let‘s go back to the e-commerce app example. You could use a webhook to notify an inventory management app whenever a customer purchases a product. The e-commerce app sends a webhook payload to the URL configured for the inventory management app, which instantly processes the purchase and adjusts inventory levels.

Some key characteristics of webhooks:

• Webhooks provide uni-directional communication (one-way). The source app sends event data to the receiving app.
• Communication is triggered by events. The source app sends a webhook when something occurs, rather than waiting for a request.
• Payloads are usually JSON or XML data containing details about the event.
• Webhooks use HTTP POST requests to external URLs. The source app doesn‘t need to know anything about the receiving app beyond the URL.

In summary, webhooks allow applications to provide real-time data to other applications as certain events happen. The communication only goes one direction, and no requests are made by the receiving app.

Key Differences Between APIs and Webhooks

Now that we‘ve defined APIs and webhooks, let‘s summarize some of the key differences:

APIs	Webhooks
Bi-directional communication	Uni-directional communication
Communication uses request-response model	Communication is event-triggered
APIs are discovered through documentation	Webhooks use pre-configured URLs
Requests made to API endpoints	POSTs sent to external URLs
Uses variety of protocols (HTTP, RPC, etc)	Only uses HTTP POST
APIs return responses	Webhooks fire and forget

While APIs and webhooks can both enable communication between apps, APIs are optimized for querying data on-demand while webhooks are better for getting real-time notifications.

When to Use APIs

Querying and Modifying Data

APIs shine when it comes to querying, retrieving, updating, deleting or modifying data between applications. APIs give you full access to make changes to and control data while providing structured responses.

For example, our e-commerce app could use an API to get detailed product information from a catalog database to display on product pages. Or it could use an API to create a new order record in an order management system when a customer checks out.

Exposing Functionality and Capabilities

APIs allow apps to leverage functionality from other apps. By calling API endpoints, you can incorporate complex processes and logic into your own app.

Suppose our e-commerce app needs to calculate local sales tax on orders. Instead of building this logic from scratch, it could call a tax API that handles tax code compliance in all jurisdictions. This saves tremendous development effort.

Developing Interactive Services

Applications that require dynamic, customizable experiences controlled by user actions are great candidates for APIs. For instance, travel booking sites use flight search and booking APIs to enable users to find and book flights that match their specific travel dates/destinations. The API-driven services can provide personalized results.

Building Scalable Architectures

Because APIs decouple front-end apps from back-end services, they allow great flexibility in scaling. The app frontend can be scaled independently from the API backend, and different API microservices can scale as needed. This makes it easier to support large, complex workflows.

Gradual Feature Development

When developing new features that depend on an external service, APIs allow you to iterate rapidly without needing access to the backend system upfront. By mocking the API initially, the frontend app can be built out and tested before the real integration is completed.

When to Use Webhooks

Getting Real-Time Notifications

Webhooks excel at providing instant notifications when events occur that your app needs to know about. There is no delay waiting for requests – the data is pushed directly as events happen.

For example, our e-commerce app could use a webhooks to get notified by the payment processor whenever a transaction is captured or disputed. This enables immediate order updates.

Asynchronous Communication

In a request-response model, the requesting app waits for the response before continuing. Since webhooks use fire-and-forget POSTs, the communication is asynchronous and event handling can happen in the background.

Decoupled Architecture

Webhooks promote loose coupling between apps. Apps only need to know the webhook URL – no knowledge of the endpoint app is required. This enables greater encapsulation and modularity in app design.

ChatOps and Monitoring

Webhooks are great for notifying chat platforms and monitoring tools when specific events occur. For example, our app could send error event webhooks to log aggregation tools to aid debugging.

Automating Workflows

Webhooks from one app can trigger workflows in other systems. For instance, webhook events from a CRM tool could automatically initiate workflows for order processing, support ticket creation, email campaigns, and more.

Example Using Stripe APIs and Webhooks

Stripe provides a good example of how APIs and webhooks can work together as part of a modern application stack.

Stripe offers a robust set of APIs that enable apps to securely collect payments, send payouts, manage customers, and more. Our e-commerce app could use Stripe‘s Payment Intents API to collect payment details and process transactions.

Additionally, Stripe provides webhooks to get notifications about important payment events. We could use Stripe webhooks to get notified immediately when a charge succeeds, fails, or gets disputed.

Here is how we might integrate Stripe APIs and webhooks into the order processing flow of an e-commerce app:

1. When a customer goes to checkout, the app calls Stripe‘s Payment Intents API to securely gather the payment details, sets up the payment, and returns a PaymentIntent ID.

2. The customer completes the checkout process, and the app displays an order confirmation.

3. Behind the scenes, the app calls the Payment Intents API again to finalize the approved payment and complete the charge.

4. Stripe sends a payment_intent.succeeded webhook to the configured endpoint. The app backend processes the webhook data and updates the order status.

5. The app could potentially also receive webhooks later for payment disputes which would trigger an order refund.

This demonstrates how APIs and webhooks can work together to enable key flows – APIs for proactive data exchange, webhooks for reactive notifications.

Best Practices for APIs and Webhooks

Here are some best practices to follow when leveraging APIs and webhooks in your applications:

For APIs:

• Stick to consistent API design standards and conventions
• Use versioning to avoid breaking changes
• Implement robust API security including authentication, authorization and TLS
• Provide detailed documentation and sample code
• Handle errors and edge cases gracefully
• Set usage limits to prevent abuse
• Use an API Gateway for management capabilities

For Webhooks:

• Build retries and error handling into the webhook endpoints
• Verify signatures to ensure payloads originate from valid sources
• Make webhooks endpoints idempotent so duplicate messages are handled properly
• Implement security at the endpoint using tokens or whitelisting
• Log and monitor webhooks endpoint for issues
• Provide ways to re-send missed events

Key Takeaways

• APIs enable bi-directional request-response data exchange between apps. Webhooks provide uni-directional, event-driven messaging.

• APIs are best for querying data on-demand. Webhooks are ideal for getting real-time notifications about events.

• APIs communicate via variety of protocols and expose organized endpoints. Webhooks use only HTTP POST to external URLs.

• Use APIs when you need to actively control capabilities and data from another app. Use webhooks when you need to react and process events happening in another system.

• Modern applications frequently leverage both APIs and webhooks to create robust, scalable architectures.

APIs and webhooks provide powerful options for integrating disparate applications together in a scalable, decoupled way. Evaluating their differences and use cases allows picking the right approach for the job and building flexible, maintainable systems.