Difference Between Callbacks and Webhooks

If you’ve ever worked on integrating payment systems into your website or app, you’ve likely come across the terms “callback” and “webhook.” Although they might sound similar, they serve very different purposes. Knowing when to use each can save you a lot of time and make your system run much more efficiently. Let’s break it down with relatable examples so you can get a clear picture.

What Exactly is a Callback?

Imagine you run an e-commerce website selling shoes. A customer decides to buy a pair and clicks the "Pay Now" button. Once the payment gateway processes the transaction, it needs to let your website know the result so you can confirm the order. This is where a callback comes in.

In this case, your website provides the payment gateway with a callback URL. When the transaction is complete, the gateway redirects the customer to this URL and sends details about the payment, such as whether it succeeded or failed. Your website then uses this information to show the customer a “Thank You” page or inform them of an issue.

Callbacks happen immediately after a task is completed, like processing a payment or verifying a user. They’re perfect for situations where you need an instant, direct response to a specific action.

What About Webhooks?

Now, let’s say you’re running a logistics business where you need to track payments made to virtual accounts for delivery services. Customers make payments at different times, and you want to update your system as soon as a deposit hits the account. Constantly checking for new payments every few minutes (called polling) is inefficient. Webhooks solve this problem.

With a webhook, you tell the Instant Pay, "Whenever someone deposits money into a virtual account, send me the details." Once set up, the webhook sends real-time notifications to your system whenever a payment happens. For example, if a customer pays for delivery, the webhook might send a message containing the customer’s name, the amount paid, and the time of payment. Your system then automatically updates the delivery status or informs your driver to proceed.

Webhooks work in the background without involving users directly. They’re like a helpful assistant who keeps an eye on things and notifies you whenever there’s an update.

Key Differences Between Callbacks and Webhooks

Although callbacks and webhooks might sound similar, they serve different purposes and work in distinct ways. To make it easier to understand, here are five key differences explained with real-world examples:

1. Trigger Mechanism

Callbacks are triggered after a specific event completes. Think about a food delivery app where the customer makes a payment. The callback URL ensures the app is notified immediately after the payment is processed, letting the customer proceed to the next step, like selecting a delivery address.

Webhooks, on the other hand, notify you when something happens, even if no specific action was initiated by your app. For example, an airline may use webhooks to get real-time updates on payments for ticket bookings made through bank transfers.

2. Timing of Data Delivery

Callbacks deliver data instantly and only once, right after a task finishes. For example, when a customer pays for car insurance, the payment gateway uses a callback to confirm the payment and redirect the customer back to your site.

Webhooks deliver data whenever the subscribed event occurs, even multiple times. In the insurance example, a webhook could notify your system every time a virtual account receives a payment, ensuring you always have the latest record of incoming premiums.

3. User Interaction Dependency

Callbacks often involve user interaction. For instance, when an e-commerce website redirects customers to a payment page, the callback ensures they land back on your site with the payment status.

Webhooks work silently in the background. They’re great for updates that don’t require the customer to be involved, like notifying a logistics company about payments for parcel deliveries.

4. Setup and Configuration

Callbacks need to be specified each time a task is performed. If a customer buys a pair of shoes, the e-commerce site provides the payment gateway with a unique callback URL for that transaction.

Webhooks are set up just once during integration. For example, a food delivery service might configure a webhook to receive notifications for all payments made via bank transfers, without needing to set it up for every order.

5. Best Use Cases

Callbacks are ideal for completing one-off tasks, such as processing a payment or verifying a user. In contrast, webhooks are better for ongoing updates, like monitoring payments into a virtual account or tracking multiple deposits in real time.

To decide which one to use, think about the nature of the event and how often it occurs. Callbacks work best when you need an immediate response to a single action. For example, when a customer pays for their meal through an app, the callback instantly confirms whether the payment was successful.

Webhooks are better for events that happen continuously or at random times. For instance, a logistics company could use webhooks to get notified whenever a customer pays for a delivery, updating their system automatically without needing to constantly check for new payments.

Finally, both callbacks and webhooks are very useful for automating communication between systems. Callbacks are great for single, immediate tasks that involve user interaction, while webhooks shine when you need ongoing, real-time updates in the background. Whether you’re running an e-commerce store, managing deliveries, or tracking insurance payments, understanding the difference can help you build a smoother and more efficient system. It’s all about picking the right tool for the job.