Netlify Functions

Deploy DodoPayments webhooks to Netlify Functions

GitHub Repository

Complete source code and setup guide

Quick Setup

1. Prerequisites

• Netlify account
• Neon database account
• DodoPayments API key from dashboard

2. Install Dependencies

npm install -g netlify-cli
netlify login
git clone https://github.com/dodopayments/cloud-functions.git
cd cloud-functions/netlify
npm install

3. Database Setup

1. Sign up for Neon
2. Create a new project
3. Open the SQL Editor
4. Copy and paste the contents of schema.sql
5. Run the query
6. Get your connection string from Neon → Connection Details

4. Set Initial Environment Variables

netlify env:set DATABASE_URL "your-neon-connection-string"
netlify env:set DODO_PAYMENTS_API_KEY "your-api-key"

Note: We’ll set DODO_PAYMENTS_WEBHOOK_KEY after deployment once you have your webhook URL.

5. Initialize & Deploy

netlify init       # Link to your site (first time only)
npm run deploy

6. Get Your Webhook URL

Your webhook URL is:

https://[your-project].netlify.app/.netlify/functions/webhook

7. Register Webhook in DodoPayments Dashboard

1. Go to DodoPayments Dashboard → Developer → Webhooks
2. Create a new webhook endpoint
3. Configure your webhook URL as the endpoint
4. Enable these subscription events:
   • subscription.active
   • subscription.cancelled
   • subscription.renewed
5. Copy the Signing Secret

8. Set Webhook Key & Redeploy

netlify env:set DODO_PAYMENTS_WEBHOOK_KEY "your-webhook-signing-key"
npm run deploy

What It Does

Processes subscription events and stores them in PostgreSQL:

• subscription.active - Creates/updates customer and subscription records
• subscription.cancelled - Marks subscription as cancelled
• subscription.renewed - Updates next billing date

Key Features

✅ Signature verification - Using the dodopayments library
✅ Idempotency - Prevents duplicate processing with webhook IDs
✅ Event logging - Complete audit trail in webhook_events table
✅ Error handling - Logged and retryable

Note: This implementation demonstrates handling three core subscription events (subscription.active, subscription.cancelled, subscription.renewed) with minimal fields. You can easily extend it to support additional event types and fields based on your requirements.

Configuration Files

package.json

{
  "name": "dodo-webhook-netlify",
  "version": "1.0.0",
  "type": "module",
  "description": "DodoPayments Webhook Handler for Netlify",
  "scripts": {
    "dev": "netlify dev",
    "deploy": "netlify deploy --prod"
  },
  "dependencies": {
    "@neondatabase/serverless": "^1.0.2",
    "dodopayments": "^2.4.1"
  },
  "devDependencies": {
    "@netlify/functions": "^5.0.0",
    "netlify-cli": "^23.9.1",
    "typescript": "^5.9.3"
  }
}

Database Schema

schema.sql

-- DodoPayments Webhook Database Schema
-- Compatible with PostgreSQL (Supabase, Neon, etc.)

-- Enable UUID extension (if not already enabled)
CREATE EXTENSION IF NOT EXISTS "uuid-ossp";

-- Customers table
CREATE TABLE IF NOT EXISTS customers (
  id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
  email TEXT NOT NULL,
  name TEXT NOT NULL,
  dodo_customer_id TEXT UNIQUE NOT NULL,
  created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
  updated_at TIMESTAMP WITH TIME ZONE DEFAULT NOW()
);

-- Subscriptions table
CREATE TABLE IF NOT EXISTS subscriptions (
  id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
  customer_id UUID NOT NULL REFERENCES customers(id) ON DELETE CASCADE,
  dodo_subscription_id TEXT UNIQUE NOT NULL,
  product_id TEXT NOT NULL,
  status TEXT NOT NULL CHECK (status IN ('pending', 'active', 'on_hold', 'cancelled', 'failed', 'expired')),
  billing_interval TEXT NOT NULL CHECK (billing_interval IN ('day', 'week', 'month', 'year')),
  amount INTEGER NOT NULL,
  currency TEXT NOT NULL,
  next_billing_date TIMESTAMP WITH TIME ZONE NOT NULL,
  cancelled_at TIMESTAMP WITH TIME ZONE,
  created_at TIMESTAMP WITH TIME ZONE NOT NULL,
  updated_at TIMESTAMP WITH TIME ZONE DEFAULT NOW()
);

-- Webhook events log
CREATE TABLE IF NOT EXISTS webhook_events (
  id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
  webhook_id TEXT UNIQUE,
  event_type TEXT NOT NULL,
  data JSONB NOT NULL,
  processed BOOLEAN DEFAULT FALSE,
  error_message TEXT,
  created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
  processed_at TIMESTAMP WITH TIME ZONE,
  attempts INTEGER DEFAULT 0
);

-- Indexes for better query performance
CREATE INDEX IF NOT EXISTS idx_customers_email ON customers(email);
CREATE INDEX IF NOT EXISTS idx_customers_dodo_id ON customers(dodo_customer_id);
CREATE INDEX IF NOT EXISTS idx_subscriptions_dodo_id ON subscriptions(dodo_subscription_id);
CREATE INDEX IF NOT EXISTS idx_subscriptions_customer_id ON subscriptions(customer_id);
CREATE INDEX IF NOT EXISTS idx_subscriptions_status ON subscriptions(status);
CREATE INDEX IF NOT EXISTS idx_webhook_events_processed ON webhook_events(processed, created_at);
CREATE INDEX IF NOT EXISTS idx_webhook_events_type ON webhook_events(event_type);
CREATE INDEX IF NOT EXISTS idx_webhook_events_created_at ON webhook_events(created_at DESC);
CREATE INDEX IF NOT EXISTS idx_webhook_events_webhook_id ON webhook_events(webhook_id);

-- Function to automatically update updated_at timestamp
CREATE OR REPLACE FUNCTION update_updated_at_column()
RETURNS TRIGGER AS $$
BEGIN
  NEW.updated_at = NOW();
  RETURN NEW;
END;
$$ LANGUAGE plpgsql;

-- Triggers to automatically update updated_at
CREATE TRIGGER update_customers_updated_at
  BEFORE UPDATE ON customers
  FOR EACH ROW
  EXECUTE FUNCTION update_updated_at_column();

CREATE TRIGGER update_subscriptions_updated_at
  BEFORE UPDATE ON subscriptions
  FOR EACH ROW
  EXECUTE FUNCTION update_updated_at_column();

-- Comments for documentation
COMMENT ON TABLE customers IS 'Stores customer information from DodoPayments';
COMMENT ON TABLE subscriptions IS 'Stores subscription data from DodoPayments';
COMMENT ON TABLE webhook_events IS 'Logs all incoming webhook events for audit and retry purposes';

COMMENT ON COLUMN customers.dodo_customer_id IS 'Unique customer ID from DodoPayments';
COMMENT ON COLUMN subscriptions.dodo_subscription_id IS 'Unique subscription ID from DodoPayments';
COMMENT ON COLUMN subscriptions.amount IS 'Amount in smallest currency unit (e.g., cents)';
COMMENT ON COLUMN subscriptions.currency IS 'Currency used for the subscription payments (e.g., USD, EUR, INR)';
COMMENT ON COLUMN webhook_events.attempts IS 'Number of processing attempts for failed webhooks';
COMMENT ON COLUMN webhook_events.data IS 'Full webhook payload as JSON';

Tables created:

• customers - Email, name, dodo_customer_id
• subscriptions - Status, amount, next_billing_date, linked to customers
• webhook_events - Event log with webhook_id for idempotency

Implementation Code

functions/webhook.ts

import { Handler, HandlerEvent, HandlerContext } from '@netlify/functions';
import { neon, NeonQueryFunction } from '@neondatabase/serverless';
import { DodoPayments } from 'dodopayments';

interface WebhookPayload {
  business_id: string;
  type: string;
  timestamp: string;
  data: {
    payload_type: "Payment" | "Subscription" | "Refund" | "Dispute" | "LicenseKey";
    subscription_id: string;
    customer: {
      customer_id: string;
      email: string;
      name: string;
    };
    product_id: string;
    status: string;
    recurring_pre_tax_amount: number;
    payment_frequency_interval: string;
    created_at: string;
    next_billing_date: string;
    cancelled_at?: string | null;
    currency: string;
  };
}

const corsHeaders = {
  'Access-Control-Allow-Origin': '*',
  'Access-Control-Allow-Headers': 'authorization, x-client-info, apikey, content-type, webhook-id, webhook-signature, webhook-timestamp',
  'Access-Control-Allow-Methods': 'POST, OPTIONS',
};

async function handleSubscriptionEvent(sql: NeonQueryFunction<false, false>, payload: WebhookPayload, status: string) {
  if (!payload.data.customer.customer_id || !payload.data.subscription_id) {
    throw new Error('Missing required fields: customer_id or subscription_id');
  }

  console.log('🔄 Processing subscription event:', JSON.stringify(payload, null, 2));

  const customer = payload.data.customer;

  // Upsert customer (create if doesn't exist, otherwise use existing)
  const customerResult = await sql`
    INSERT INTO customers (email, name, dodo_customer_id, created_at)
    VALUES (${customer.email}, ${customer.name}, ${customer.customer_id}, ${new Date().toISOString()})
    ON CONFLICT (dodo_customer_id) 
    DO UPDATE SET 
      email = EXCLUDED.email,
      name = EXCLUDED.name,
      updated_at = ${new Date().toISOString()}
    RETURNING id
  `;

  const customerId = customerResult[0].id;
  console.log(`✅ Customer upserted with ID: ${customerId}`);

  // Upsert subscription
  await sql`
    INSERT INTO subscriptions (
      customer_id, dodo_subscription_id, product_id, status, 
      billing_interval, amount, currency, created_at, next_billing_date, cancelled_at, updated_at
    )
    VALUES (
      ${customerId}, ${payload.data.subscription_id},
      ${payload.data.product_id}, ${status},
      ${payload.data.payment_frequency_interval.toLowerCase()}, ${payload.data.recurring_pre_tax_amount},
      ${payload.data.currency}, ${payload.data.created_at}, ${payload.data.next_billing_date},
      ${payload.data.cancelled_at ?? null}, ${new Date().toISOString()}
    )
    ON CONFLICT (dodo_subscription_id) 
    DO UPDATE SET 
      customer_id = EXCLUDED.customer_id,
      product_id = EXCLUDED.product_id,
      status = EXCLUDED.status,
      billing_interval = EXCLUDED.billing_interval,
      amount = EXCLUDED.amount,
      currency = EXCLUDED.currency,
      created_at = EXCLUDED.created_at,
      next_billing_date = EXCLUDED.next_billing_date,
      cancelled_at = EXCLUDED.cancelled_at,
      updated_at = EXCLUDED.updated_at
  `;

  console.log(`✅ Subscription upserted with ${status} status`)
}

export const handler: Handler = async (event: HandlerEvent, context: HandlerContext) => {
  // Handle CORS preflight
  if (event.httpMethod === 'OPTIONS') {
    return {
      statusCode: 200,
      headers: corsHeaders,
      body: 'ok'
    };
  }

  if (event.httpMethod !== 'POST') {
    return {
      statusCode: 405,
      headers: { ...corsHeaders, 'Content-Type': 'application/json' },
      body: JSON.stringify({ error: 'Method not allowed' })
    };
  }

  try {
    const rawBody = event.body || '';
    console.log('📨 Webhook received');

    const DATABASE_URL = process.env.DATABASE_URL;
    const API_KEY = process.env.DODO_PAYMENTS_API_KEY;
    const WEBHOOK_KEY = process.env.DODO_PAYMENTS_WEBHOOK_KEY;

    if (!DATABASE_URL) {
      console.error('❌ Missing DATABASE_URL environment variable');
      return {
        statusCode: 500,
        headers: { ...corsHeaders, 'Content-Type': 'application/json' },
        body: JSON.stringify({ error: 'Server configuration error' })
      };
    }

    // Verify required environment variables
    if (!API_KEY) {
      console.error('❌ DODO_PAYMENTS_API_KEY is not configured');
      return {
        statusCode: 500,
        headers: { ...corsHeaders, 'Content-Type': 'application/json' },
        body: JSON.stringify({ error: 'API key not configured' })
      };
    }

    if (!WEBHOOK_KEY) {
      console.error('❌ DODO_PAYMENTS_WEBHOOK_KEY is not configured');
      return {
        statusCode: 500,
        headers: { ...corsHeaders, 'Content-Type': 'application/json' },
        body: JSON.stringify({ error: 'Webhook verification key not configured' })
      };
    }

    // Verify webhook signature (required for security)
    const webhookHeaders = {
      'webhook-id': event.headers['webhook-id'] || '',
      'webhook-signature': event.headers['webhook-signature'] || '',
      'webhook-timestamp': event.headers['webhook-timestamp'] || '',
    };

    try {
      const dodoPaymentsClient = new DodoPayments({
        bearerToken: API_KEY,
        webhookKey: WEBHOOK_KEY,
      });
      const unwrappedWebhook = dodoPaymentsClient.webhooks.unwrap(rawBody, { headers: webhookHeaders });
      console.log('Unwrapped webhook:', unwrappedWebhook);
      console.log('✅ Webhook signature verified');
    } catch (error) {
      console.error('❌ Webhook verification failed:', error);
      return {
        statusCode: 401,
        headers: { ...corsHeaders, 'Content-Type': 'application/json' },
        body: JSON.stringify({ error: 'Webhook verification failed' })
      };
    }

    // Initialize Neon client
    const sql = neon(DATABASE_URL);

    const payload: WebhookPayload = JSON.parse(rawBody);
    const eventType = payload.type;
    const eventData = payload.data;
    const webhookId = event.headers['webhook-id'] || '';

    console.log(`📋 Webhook payload:`, JSON.stringify(payload, null, 2));

    // Check for duplicate webhook-id (idempotency)
    if (webhookId) {
      const existingEvent = await sql`
        SELECT id FROM webhook_events WHERE webhook_id = ${webhookId}
      `;

      if (existingEvent.length > 0) {
        console.log(`⚠️ Webhook ${webhookId} already processed, skipping (idempotency)`);
        return {
          statusCode: 200,
          headers: { ...corsHeaders, 'Content-Type': 'application/json' },
          body: JSON.stringify({ success: true, message: 'Webhook already processed' })
        };
      }
    }

    // Log webhook event with webhook_id for idempotency
    const logResult = await sql`
      INSERT INTO webhook_events (webhook_id, event_type, data, processed, created_at)
      VALUES (${webhookId || null}, ${eventType}, ${JSON.stringify(eventData)}, ${false}, ${new Date().toISOString()})
      RETURNING id
    `;

    const loggedEventId = logResult[0].id;
    console.log('📝 Webhook event logged with ID:', loggedEventId);

    console.log(`🔄 Processing: ${eventType} (${eventData.payload_type || 'unknown payload type'})`);

    try {
      switch (eventType) {
        case 'subscription.active':
          await handleSubscriptionEvent(sql, payload, 'active');
          break;
        case 'subscription.cancelled':
          await handleSubscriptionEvent(sql, payload, 'cancelled');
          break;
        case 'subscription.renewed':
          console.log('🔄 Subscription renewed - keeping active status and updating billing date');
          await handleSubscriptionEvent(sql, payload, 'active');
          break;
        default:
          console.log(`ℹ️ Event ${eventType} logged but not processed (no handler available)`);
      }

      await sql`
        UPDATE webhook_events 
        SET processed = ${true}, processed_at = ${new Date().toISOString()}
        WHERE id = ${loggedEventId}
      `;

      console.log('✅ Webhook marked as processed');
    } catch (processingError) {
      console.error('❌ Error processing webhook event:', processingError);

      await sql`
        UPDATE webhook_events 
        SET processed = ${false}, 
            error_message = ${processingError instanceof Error ? processingError.message : 'Unknown error'},
            processed_at = ${new Date().toISOString()}
        WHERE id = ${loggedEventId}
      `;

      throw processingError;
    }

    console.log('✅ Webhook processed successfully');

    return {
      statusCode: 200,
      headers: { ...corsHeaders, 'Content-Type': 'application/json' },
      body: JSON.stringify({
        success: true,
        event_type: eventType,
        event_id: loggedEventId
      })
    };

  } catch (error) {
    console.error('❌ Webhook processing failed:', error);
    return {
      statusCode: 500,
      headers: { ...corsHeaders, 'Content-Type': 'application/json' },
      body: JSON.stringify({
        error: 'Webhook processing failed',
        details: error instanceof Error ? error.message : 'Unknown error'
      })
    };
  }
};

How It Works

The webhook handler:

1. Verifies the signature - Ensures the request is from DodoPayments using HMAC-SHA256
2. Checks for duplicates - Uses webhook ID to prevent processing the same event twice
3. Logs the event - Stores raw webhook in webhook_events table for audit trail
4. Processes the event - Creates or updates customers and subscriptions in Neon
5. Handles errors - Logs failures and marks event as unprocessed for retry

Testing

Local development:

npm run dev  # Available at http://localhost:8888/.netlify/functions/webhook

View logs in Netlify Dashboard:

1. Select your site → Functions tab
2. Click on the webhook function
3. View real-time logs and invocation history

Configure in DodoPayments Dashboard:

1. Go to Developers → Webhooks
2. Add endpoint with your Netlify Functions URL
3. Enable: subscription.active, subscription.cancelled, subscription.renewed

Common Issues

Issue	Solution
Verification failed	Check webhook key is correct from DodoPayments dashboard
Database connection error	Verify Neon connection string and use pooled connection
Function not found (404)	Run netlify init and npm run deploy again
Env vars not available	Set variables in CLI or dashboard, then redeploy

Resources

• Netlify Functions Docs
• Netlify CLI
• Neon Docs
• Webhook Events Guide
• GitHub Repo