Webhook vs API

TL;DR (Too long didn't read)

APIs and webhooks are both methods of communication between software applications. APIs allow applications to request information from each other, while webhooks are event-driven and enable one program to send data to another when a specific event occurs. Webhooks are often referred to as "reverse APIs" since the data transfer is initiated by the sending application. In an example of integrating a payment gateway in an e-commerce platform, using webhooks is preferable as it eliminates the need for constant polling, reducing resource consumption. APIs are useful for requesting information, making payments, and tracking shipments, while webhooks are ideal for receiving automated reminders and updates.

In this digital era, everyone is always interacting with some Application via the handset, website, etc. Most of you might be aware of these terms but let's know the difference between them.

API:

• API is the medium to interact with the server to request something.

• APIs open the door to back-and-forth communication between software applications via requests—App A requests information from App B, and App B decides what to do with the request.

• API is very powerful as it is used for almost 70% of use cases while interacting with Applications.

Webhook:

• A webhook can be thought of as a type of API that is driven by events rather than requests. Instead of one application requesting another to receive a response, a webhook is a service that allows one program to send data to another as soon as a particular event takes place.

• Since the application sending the data initiates the transfer, webhooks are often referred to as "reverse APIs."

Let's discuss with an example where we can compare the exact use case and the difference between both. Suppose we are building an e-commerce platform with PG(Payment Gateway) integration. Since payments are fully handled by PGs, your application won't be updated regarding payment for any order. We can only confirm the order once the payment is successful(same as Amazon).

Here we have to get the payment status from PG to confirm or deny the order. There are 2 ways to do so:

1. Ask PG to provide status API, which we will be polling with fixed or exponential intervals to get the updated status. In this case, we will be bombarding PG's system and increasing our system resource consumption by making repeated hits to the PG.

2. Configure our API as Webhook to the PG so that when any payment update is available, it will be sent to our API by PG. In this case, we would be waiting for the update from PG, but it won't have any negative impact on our system resources.

We can see this is the best use case for the Webhooks. Below are some other use cases for both: