An automatic notification a service sends to your app the moment something happens, such as a successful payment or shipment update.
With a normal API, your app asks the other service. A webhook works the other way: the service contacts your app automatically when an event occurs. You give it a URL on your server, and it sends messages like payment 123 succeeded or shipment delivered.
Webhooks are essential for payments in particular. A customer may close the browser before returning to the confirmation page, but the gateway's notification still reaches your server and confirms the order. Without it, paid orders can appear incomplete. Practical tip: always verify that a webhook really came from the provider using the signature it supplies, and design handling so a duplicate notification has no extra effect, such as shipping the order twice.