APIs vs Webhooks: what are the differences?

Both APIs and Webhooks serve the general purpose of facilitating communication between software. They enable two applications to connect with each other and share data, which is crucial for businesses to improve their services and innovate. However, APIs and Webhooks have their unique particularities and are used in different occasions. In this article, we will dive into the differences between APIs and Webhooks, their definitions and how they are used.

What is an API?

APIs, or Application Programme Interfaces, work as request-based intermediaries that enable communication between two applications. This allows companies to share data with third-parties, partners or customers. It also allows developers to work on other software and make use of its functionalities without having to actually code it.

In order to request data from other application, you need access to an API key which is given to you by the third-party. Once you have the API key, you can make an API request or call. If all details are correct, the API will push the information from the web server and bring it back to you. There are various types of API keys depending on what information and software you plan to access. Have a look at our previous article if you want to learn what are APIs and how they work in more detail, and get other real-world examples of its usages.

APIs are typically used when there are constant changes in data and you need to update your data regularly. Unlike webhooks, which only work based on events, APIs require a manual request. So, if you only need a particular result or piece of information, you would use an API to retrieve it.

What is a Webhook?

A webhook is an event-based intermediary that enable communication between two applications. As you can see, the general purpose between an API and webhook is the same: to connect applications and enable them to share information. However, webhooks are event-based so, unlike APIs, you don’t need to manually make a request. Instead, you set up an event and every time that event occurs, the webhook is triggered.

A simple example of how webhooks work can be seeing in automated email notifications. For instance, when you sign up to a website, you often get a confirmation email with all the details. The webhook was triggered by an event (signing up to a website), and the email was sent automatically. Webhooks make communication between enterprises and customers much easier. Because they are automated and respond in real-time, webhooks can also save companies time and resources. They are often used to retrieve smaller data.

Main differences between an API and a Webhook

The main difference between an API and a webhook is in how they operate. An API is request-based, and a webhook is event-based. This means that APIs are triggered by a specific request from one server, whilst webhooks are triggered by a particular event.

To use a real-life analogy, think of making an order at a restaurant. After seeing the menu, you make your order with the waiter. The waiter is responsible for communicating your order with the kitchen, and bringing back what you have ordered. In this case, the waiter represents the API, because it is the intermediator between you and the kitchen. You also had to specifically request what you wanted, so this was request-based.

Imagine now that you have been going to the same restaurant and ordering the same meal for a long time. When you come in, the waiter already knows what you want and immediately communicates your request with the kitchen. This sharing of information was event-based, and it was triggered by a specific event that occurred: you coming in the restaurant. So, in this case, the waiter represents the webhook.

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.