diff --git a/crates/common_utils/src/consts.rs b/crates/common_utils/src/consts.rs
index 59ec537769..bbb65e1afc 100644
--- a/crates/common_utils/src/consts.rs
+++ b/crates/common_utils/src/consts.rs
@@ -97,6 +97,11 @@ pub const BASE64_ENGINE: base64::engine::GeneralPurpose = base64::engine::genera
 /// URL Safe base64 engine
 pub const BASE64_ENGINE_URL_SAFE: base64::engine::GeneralPurpose =
     base64::engine::general_purpose::URL_SAFE;
+
+/// URL Safe base64 engine without padding
+pub const BASE64_ENGINE_URL_SAFE_NO_PAD: base64::engine::GeneralPurpose =
+    base64::engine::general_purpose::URL_SAFE_NO_PAD;
+
 /// Regex for matching a domain
 /// Eg -
 /// http://www.example.com
diff --git a/crates/router/src/core/errors.rs b/crates/router/src/core/errors.rs
index bf5330a932..a980bb664e 100644
--- a/crates/router/src/core/errors.rs
+++ b/crates/router/src/core/errors.rs
@@ -157,6 +157,8 @@ pub enum WebhooksFlowError {
     OutgoingWebhookRetrySchedulingFailed,
     #[error("Outgoing webhook response encoding failed")]
     OutgoingWebhookResponseEncodingFailed,
+    #[error("ID generation failed")]
+    IdGenerationFailed,
 }
 
 impl WebhooksFlowError {
@@ -174,7 +176,8 @@ impl WebhooksFlowError {
             | Self::DisputeWebhookValidationFailed
             | Self::OutgoingWebhookEncodingFailed
             | Self::OutgoingWebhookProcessTrackerTaskUpdateFailed
-            | Self::OutgoingWebhookRetrySchedulingFailed => true,
+            | Self::OutgoingWebhookRetrySchedulingFailed
+            | Self::IdGenerationFailed => true,
         }
     }
 }
diff --git a/crates/router/src/core/webhooks/outgoing.rs b/crates/router/src/core/webhooks/outgoing.rs
index 34b49c2fc8..adc54b09b9 100644
--- a/crates/router/src/core/webhooks/outgoing.rs
+++ b/crates/router/src/core/webhooks/outgoing.rs
@@ -60,7 +60,9 @@ pub(crate) async fn create_event_and_trigger_outgoing_webhook(
 ) -> CustomResult<(), errors::ApiErrorResponse> {
     let delivery_attempt = enums::WebhookDeliveryAttempt::InitialAttempt;
     let idempotent_event_id =
-        utils::get_idempotent_event_id(&primary_object_id, event_type, delivery_attempt);
+        utils::get_idempotent_event_id(&primary_object_id, event_type, delivery_attempt)
+            .change_context(errors::ApiErrorResponse::WebhookProcessingFailure)
+            .attach_printable("Failed to generate idempotent event ID")?;
     let webhook_url_result = get_webhook_url_from_business_profile(&business_profile);
 
     if !state.conf.webhooks.outgoing_enabled
diff --git a/crates/router/src/core/webhooks/outgoing_v2.rs b/crates/router/src/core/webhooks/outgoing_v2.rs
index 07758817e6..d0e0ecaa69 100644
--- a/crates/router/src/core/webhooks/outgoing_v2.rs
+++ b/crates/router/src/core/webhooks/outgoing_v2.rs
@@ -48,7 +48,9 @@ pub(crate) async fn create_event_and_trigger_outgoing_webhook(
 ) -> CustomResult<(), errors::ApiErrorResponse> {
     let delivery_attempt = enums::WebhookDeliveryAttempt::InitialAttempt;
     let idempotent_event_id =
-        utils::get_idempotent_event_id(&primary_object_id, event_type, delivery_attempt);
+        utils::get_idempotent_event_id(&primary_object_id, event_type, delivery_attempt)
+            .change_context(errors::ApiErrorResponse::WebhookProcessingFailure)
+            .attach_printable("Failed to generate idempotent event ID")?;
     let webhook_url_result = business_profile
         .get_webhook_url_from_profile()
         .change_context(errors::WebhooksFlowError::MerchantWebhookUrlNotConfigured);
diff --git a/crates/router/src/core/webhooks/utils.rs b/crates/router/src/core/webhooks/utils.rs
index 45b6c24a2e..0344d7d010 100644
--- a/crates/router/src/core/webhooks/utils.rs
+++ b/crates/router/src/core/webhooks/utils.rs
@@ -1,6 +1,12 @@
 use std::marker::PhantomData;
 
-use common_utils::{errors::CustomResult, ext_traits::ValueExt};
+use base64::Engine;
+use common_utils::{
+    consts,
+    crypto::{self, GenerateDigest},
+    errors::CustomResult,
+    ext_traits::ValueExt,
+};
 use error_stack::{Report, ResultExt};
 use redis_interface as redis;
 use router_env::tracing;
@@ -146,18 +152,28 @@ pub(crate) fn get_idempotent_event_id(
     primary_object_id: &str,
     event_type: types::storage::enums::EventType,
     delivery_attempt: types::storage::enums::WebhookDeliveryAttempt,
-) -> String {
+) -> Result<String, Report<errors::WebhooksFlowError>> {
     use crate::types::storage::enums::WebhookDeliveryAttempt;
 
     const EVENT_ID_SUFFIX_LENGTH: usize = 8;
 
     let common_prefix = format!("{primary_object_id}_{event_type}");
-    match delivery_attempt {
-        WebhookDeliveryAttempt::InitialAttempt => common_prefix,
+
+    // Hash the common prefix with SHA256 and encode with URL-safe base64 without padding
+    let digest = crypto::Sha256
+        .generate_digest(common_prefix.as_bytes())
+        .change_context(errors::WebhooksFlowError::IdGenerationFailed)
+        .attach_printable("Failed to generate idempotent event ID")?;
+    let base_encoded = consts::BASE64_ENGINE_URL_SAFE_NO_PAD.encode(digest);
+
+    let result = match delivery_attempt {
+        WebhookDeliveryAttempt::InitialAttempt => base_encoded,
         WebhookDeliveryAttempt::AutomaticRetry | WebhookDeliveryAttempt::ManualRetry => {
-            common_utils::generate_id(EVENT_ID_SUFFIX_LENGTH, &common_prefix)
+            common_utils::generate_id(EVENT_ID_SUFFIX_LENGTH, &base_encoded)
         }
-    }
+    };
+
+    Ok(result)
 }
 
 #[inline]
diff --git a/crates/router/src/core/webhooks/webhook_events.rs b/crates/router/src/core/webhooks/webhook_events.rs
index 44ce4fdd51..700295af0e 100644
--- a/crates/router/src/core/webhooks/webhook_events.rs
+++ b/crates/router/src/core/webhooks/webhook_events.rs
@@ -287,7 +287,9 @@ pub async fn retry_delivery_attempt(
         &event_to_retry.primary_object_id,
         event_to_retry.event_type,
         delivery_attempt,
-    );
+    )
+    .change_context(errors::ApiErrorResponse::WebhookProcessingFailure)
+    .attach_printable("Failed to generate idempotent event ID")?;
 
     let now = common_utils::date_time::now();
     let new_event = domain::Event {
diff --git a/crates/router/src/workflows/outgoing_webhook_retry.rs b/crates/router/src/workflows/outgoing_webhook_retry.rs
index 559f62b1a4..d84f0b26dc 100644
--- a/crates/router/src/workflows/outgoing_webhook_retry.rs
+++ b/crates/router/src/workflows/outgoing_webhook_retry.rs
@@ -72,7 +72,9 @@ impl ProcessTrackerWorkflow<SessionState> for OutgoingWebhookRetryWorkflow {
             &tracking_data.primary_object_id,
             tracking_data.event_type,
             delivery_attempt,
-        );
+        )
+        .change_context(errors::ApiErrorResponse::WebhookProcessingFailure)
+        .attach_printable("Failed to generate idempotent event ID")?;
 
         let initial_event = match &tracking_data.initial_attempt_id {
             Some(initial_attempt_id) => {