Webhook vs. API: Differences, Uses, and Benefits

The extent to which most business software applications rely on application programming interfaces (APIs) and webhooks is hard to overstate. They’re in play when getting the latest stock updates or determining how much a competitor charges for similar products. How different are they from one another, and when should you choose one over the other?.

Webhooks and APIs 101

Developers often rely on webhooks and APIs when building websites or mobile apps. They both make digital communication possible and help devices share data. Both are essential in facilitating various applications and web functions. There are multiple repositories housing already-built APIs and webhooks.

Even though they have many similarities, webhooks and APIs operate differently. Avoid thinking of a webhook as a reverse API, because they're more than that. Understanding their differences is critical to determining which to use.

What Are Webhooks?

Webhooks are event-based systems that help applications send data to another system or website to respond to events or triggers. That helps them provide real-time data transfers and communications when they receive a request. When a customer signs up for one of your services, the platform may deliver a welcome notification or email congratulating them for signing up. That’s an example of a webhook.

What Are APIs?

An API lets applications talk to each other. It comprises a library of protocols and definitions that provide an accessible way to share data within a company, across an organization, and to external systems. If you’ve ever adjusted your smart thermometer using your phone, that’s an example of API-based application integration.

Key Differences Between Webhooks and APIs

It can be hard to distinguish the functionality of a webhook versus an API. Let’s look at how both operate to help clear up some of the confusion.

Definition and Functionality

Webhooks are typically used by one application, which operates as a sender, to automatically transmit data or notifications to another application, the recipient. That happens when something occurs that tells the webhook to respond. For example, if a client makes a payment, a webhook can trigger a webhook notification to your company’s system of the account update.

APIs provide a streamlined way for developers to initiate an interaction. They also specify rules and protocols outlining making specific data requests, initiating certain actions, and structuring responses.

Communication Flow

Webhooks use the Hypertext Transfer Protocol (HTTP) to exchange requests and responses. First, an event, such as a comment submitted to a website, occurs in a sender application. The recipient application provides a publicly accessible URL endpoint, the webhook URL.

Requests from the sender application include a webhook payload containing data and all relevant headers. From there, the recipient application responds to a request by providing data through the endpoint. Webhooks can respond with JavaScript Object Notation (JSON) or Extensible Markup Language (XML).

The recipient application takes specific actions based on the event. Examples include updating a database or initiating a workflow. Responses from the receiving application usually have status codes or other information defining the outcome of the communication.

API Communications

Like webhooks, APIs use HTTP for communication. They use a client-server model where clients, or senders, request specific information or data from another application, the server. That receiver then exposes its functionality through an API. Methods used to define actions include:

• GET — Retrieve data from a server
• POST — Send data to a server to create or update information
• PUT — Used to update existing server data
• DELETE — Used to remove information from a server

Client API requests include headers containing information, such as authentication tokens and content type. They may also have parameters or information in the request body, like JSON data containing record details.

After the server receives the HTTP request from a client, it processes it based on the endpoint and defined method, then generates an HTTP response. It usually contains status codes regarding the outcome of the request and relevant data in the desired format.

Trigger Mechanisms

Webhooks listen for specific external actions or events to determine what type of response to provide. They prompt the sender application to generate and send data to a webhook URL, which notifies the recipient about the event.

API triggers are conditions that cause an application or system to make an API request for functions like retrieving data, making an update, or interacting with an external application. Developers can schedule triggers at specific times, cause them to happen based on user actions, or respond to external events like receiving a message or email.

Data Handling

Webhooks can send data even if they don’t receive a request. All they need is an event that provokes a response. However, that makes them more limited in functionality because they only send information one way. APIs require a specific data request before generating a response. They are more versatile than webhooks and capable of two-way communication with other applications.

Use Cases for Webhooks

Now that we understand how webhooks, let’s explore some cases when you might use one or the other.

Real-Time Notifications

Webhooks are suitable for scenarios that call for timely communication between two applications. Companies use webhooks to update inventory systems if a customer sends a payment through an e-commerce platform. They also inform fulfillment centers about new orders and note successful payments to ensure prompt order processing and shipping.

Many social media platforms use webhooks to inform external analytics about user interactions, allowing businesses to perform real-time tracking of user engagement metrics.

Automation and Workflows

Webhooks facilitate workflows around lead captures from web forms. If a prospect fills out a form on a company site, webhooks can automate capturing that information and saving it to a CRM. Other triggers can set off automated marketing campaigns that appeal to the user.

Businesses often use webhooks to send user notifications in response to new messages or system updates. Webhooks facilitate the automatic publication of social media updates based on specific events or scheduled times.

Event-Driven Applications

Companies can use webhooks within chat applications to provide updates about user actions. They also integrate with other applications and trigger actions based on device events.

Webhooks help make websites more interactive by reacting to user actions. Webhooks can monitor system metrics and alert administrators when anything unusual happens or the system exceeds previously defined thresholds.

Use Cases for APIs

APIs are sometimes used instead of webhooks. Below are some common use cases for APIs.

Data Retrieval and Integration

Many e-commerce platforms use APIs to integrate with popular payment gateways. They also use them to work with inventory management systems and shipping providers. APIs can retrieve information from multiple sources. They can aggregate data further to use in analysis and reporting.

Organizations use APIs to interact with third-party applications to enhance an app’s capabilities. APIs help content systems retrieve information from databases for display on websites. Many business intelligence applications retrieve data through APIs from different organizational systems and departments. They use the information to gain insights and set up reporting for decision-makers.

Third-Party Custom Integrations

Video conferencing tools use APIs to enable virtual meetings and other collaborative features, allowing organizations to provide employees with a hybrid work environment. Companies can also use APIs to integrate with external SMS gateways to send alerts to business users. Third-party document services use APIs to enable electronic signatures and document management capabilities.

Creating Custom Applications

System engineers often use APIs to enhance custom applications being developed for an organization. They make integrating with other sources like databases or IoT devices easier. That makes it possible to give users a comprehensive view of data within that application. Other examples of integrating APIs into a custom application include:

• Using geolocation services
• Authenticating users
• Integrating with social media applications
• Performing analytics and reporting
• Centralizing customer data through CRM APIs

Key Takeaways: Are Webhooks or APIs Right for You?

When to use webhooks vs. APIs depends on your specific business scenario. If real-time information is your goal, then consider a webhook. However, if two-way communication is essential, look for an API that accommodates your needs. Make sure your choice is a fit for application integration. Factors that might influence your choice include:

• Whether you need to work with mobile applications
• If you need to interact with external systems
• The importance of real-time updates
• Whether you’re working with chat applications
• How your software interface operates

You may need to invest in developing custom APIs or webhooks. Many developers use webhook integrations as an essential complement to APIs. They can handle more straightforward functions, while you can use pre-built or custom APIs for other purposes. You can have different pieces of software using the same webhooks and APIs. Make sure you document how often they’re used and for what purpose.

Save Hours During Critical Times With the Right Incident Communication Tool

Both APIs and webhooks can help organizations handle incident responses promptly. StatusPal relies on both to help companies save time and money. Learn more about how we can make incident response seamless by signing up for a free trial.