What is a Webhook? Webhooks vs APIs Explained
In modern web and app development, fast communication between different systems is essential. Whether it’s a payment update, form submission, chat message, or order confirmation—applications need a way to notify each other in real time. This is where Webhooks come into play.
What is a Webhook?
A Webhook is an automated system-to-system communication method where one application sends real-time data to another application when a specific event happens.
Instead of constantly checking (polling) for updates, a webhook pushes data automatically.
Simple Example:
When someone pays via Razorpay/PayPal, they immediately send payment status to your server URL (webhook URL). This helps update order status instantly.
So, Webhook = Event happens → Data is sent automatically.
Read This: Zoho Office vs Microsoft Office: A Comprehensive Comparison for 2025
How Do Webhooks Work?
- You provide a Webhook URL to the service.
- The service stores this URL in its system.
- When a particular event occurs, like a payment or signup:
- The service sends an HTTP POST request to your Webhook URL.
- Your server processes the request and takes action.
Data Format:
Webhooks usually send data in JSON or XML format.
Why Use Webhooks?
| Benefit | Explanation |
|---|---|
| Real-time communication | Receives updates instantly without delay |
| Reduced system load | No need for continuous API polling |
| Cost efficient | Saves bandwidth and server resources |
| Automation friendly | Perfect for triggering background workflows |
| Better User Experience | Users see changes instantly |
Common Use Cases of Webhooks
| Use Case | Example |
|---|---|
| Payment Notifications | Razorpay sends payment success/failure to your webhook |
| Form Submissions | Google Forms / Typeform send responses to systems |
| Order Status Updates | Delivery partner sends tracking updates |
| Messaging/Chat Alerts | Slack, Discord notify channels automatically |
| CRM Integration | Website signup data goes directly into CRM tools |
Webhooks vs. APIs: What’s the Difference?
| Feature | Webhooks | APIs |
|---|---|---|
| Communication Type | Push (data sent automatically) | Pull (you request data manually) |
| Triggered by | Events | Client Requests |
| Data Speed | Real-time | Depends on request frequency |
| Server Load | Low | Higher due to repeated polling |
| Use Case | Instant alerts & automation | Fetching, updating, and managing data |
Example Scenario
| Scenario | Best Choice | Why |
|---|---|---|
| Need to know immediately when payment is completed | Webhook | Event-based instant update |
| Need to get user profile data anytime | API | Data must be requested manually |
In short:
- If you need constant updates automatically → Use Webhooks
- If you need to request data when needed → Use APIs
Security Considerations for Webhooks
Because webhooks send data automatically, securing them is important:
- Use HTTPS Webhook URLs
- Verify signatures (e.g., HMAC secret validation)
- Rate-limit incoming requests
- Log and monitor webhook calls
Final Thoughts
Webhooks are an efficient and powerful solution for real-time data transfer between systems. They minimize server load, improve automation, and provide instant updates, making them essential for modern applications—especially in payment processing, CRM workflow automation, messaging apps, and e-commerce.
Webhooks and APIs are not competitors—they complement each other.
Use APIs to fetch or modify data, and use Webhooks to receive real-time event alerts.
