This is the third article in a series of "Getting Started with Nexmo SMS and Ruby on Rails" tutorials, building upon the previous setup to receive a Delivery Receipt for a sent message. To receive an inbound SMS, a similar webhook endpoint needs to be implemented in Ruby on Rails, utilizing a Vonage API account and virtual phone number. The process involves setting up a webhook endpoint using either the Nexmo CLI tool or the Settings page on the Nexmo Dashboard, handling the inbound SMS webhook, and processing the payload to store a new SMS record. An example controller is provided to handle the payload, sending a reply back to the sender as well, before starting the server and testing the setup with an SMS sent to the Nexmo number.