APIs vs. Webhooks: Which Is Better for Your Business?

In today’s hyperconnected market, application programming interfaces (APIs) are considered a best practice for businesses who want to achieve data visibility and quickly scale their tech stacks. That’s because APIs offer multiple benefits for companies and IT teams of all sizes. Not only are they pre-packaged, pre-built, and highly scalable, but they also allow for rapid collaboration between third-party applications, programs, and platforms, which means faster innovation and better business results.

But as third-party integrations diversify, developers have found a new way to transport and sync lightweight packets of data: webhooks. Compared to APIs, webhooks are considered to be more efficient and streamlined, which explain their fast-growing popularity amongst the API development community.

To help you gain a better understanding of webhooks, this article answers two key questions: What’s the main difference between APIs and webhooks, and more importantly, how does each affect your business and operations?

API vs. webhook: A non-technical explanation

"Ask, and you shall receive" is the basic premise underlying APIs. Think of an API as a piece of software or code that establishes a two-way, direct connection between different applications, allowing them to share and sync data.

For example, imagine you’re using communication APIs to connect your communications platform to your customer relationship management (CRM) system, such as Zendesk or Salesforce. Or perhaps you want to sync to a chat app, such as WhatsApp or Facebook Messenger, so that you can send messages to customers directly from your CRM interface.

In order to retrieve new customer messages, the API will first need to ask the chat app, “Is there any new data?” From a user experience point of view, this is usually initiated via an "Update" or "Retrieve New Messages" button or similar function. If there is new data, the chat spp will send it over via the API to your CRM platform. Simply put, APIs operate on a request basis—all forms of data exchange are only triggered when a request is made.

Webhooks, on the other hand, automatically push new data without the need for an explicit request. This is why webhooks are often recommended for removing unneeded complexity and optimizing workflows. Consider the example above. Using a webhook instead of an API will allow the chat app to periodically scan for new messages, and then proactively send them over to your CRM platform.

What triggers the data exchange is defined as an “event,” and what an event looks like must be clearly defined when setting up a webhook. There are also some instances when APIs are used and managed via event-driven API management to trigger based on events. This ensures that only the desired updates are being pushed to your system. Otherwise, you run the risk of receiving any and all new data, which may end up being counter-productive.

When to use APIs and webhooks for your business?

Here’s the not-so-secret secret: APIs and webhooks work best when used together.

At first glance, it may seem that webhooks are the superior option because they automatically push data to you without having to request it. But imagine you’re shopping at a store, and the sales person keeps coming over to ask if you need any assistance every time you pick up a product off the shelf. It could get overwhelming—not to mention annoying—pretty fast.

In truth, the API versus webhook debate is not a debate at all. The two are not in competition with each other, but are rather meant to complement each other to solve different problems.

Webhooks are great for situations when your event trigger can be clearly defined. But because webhooks are unidirectional and don't allow for flow control, you'll have to accept whatever data the provider app sends. Only using webhooks could therefore end up in disaster if the system is overwhelmed with too much information, or if the provider app encounters an error and stops sending data. Worst still is if you don’t have an avenue to send a request.

APIs, on the other hand, are bidirectional, allowing you to both send and receive data. That’s why APIs are invaluable in online payment processing systems or travel booking apps, or any system that requires a client response. Furthermore, Change Data Capture (CDC) synchronization is crucial when comparing APIs and webhooks. APIs facilitate bidirectional communication for real-time data updates, making them well-suited for CDC scenarios. Conversely, webhooks' unidirectional nature may not efficiently handle complex data synchronization.

APIs and webhooks make the perfect team

To create a system that communicates and receives the right data at the right time, it is essential to use both webhooks and APIs. Webhooks complement API-based integration to deliver more feature-rich applications, resulting in better user experiences and workflow optimization.

When choosing between using an API or a webhook in a specific scenario, it all boils down to what sort of data you’re exchanging. If you’re looking for something as simple as a status update, webhooks are a great solution, but if you need response-based functionality, then APIs are still the way to go.

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If you are keen to find out more, join us at INTERFACE by apidays to learn what you can look forward to over the next 10 years of APIs. This leading virtual conference brings together a global community of information and technology leaders to share important insights regarding the future of the API economy. We also have a speaker session at the event:

Best practices for managing webhooks at scale

Anton Shchekalov, VP of Engineering CPaaS

Watch the session on-demand now.