How WhatsApp makes money 2020

How WhatsApp makes money 2020

WhatsApp is the world’s most popular and most used messaging app as at October 2020. It is Facebook’s second biggest property. At inception, the texting and video app was free to use for everyone as long as one has internet.

So, is WhatsApp free for you as an individual? Most people think they don’t pay anything for the use of the app. However, without internet you cannot use it, which means you have to pay an internet service provider first before using the app. Unless you are using free WiFi.

However, none of such payments reach the owner of WhatsApp, Facebook. The parent company has been mulling over ways to make the messaging app profitable and self-sustainable. There are two most popular ways majority of apps found on Play Store and AppStore make money:

  • through advertisements
  • through subscription services.

Currently, WhatsApp does not use either of these methods, or any other. Before 2016 though, the company used the subscription model where a download of the app cost USD 1, with users paying USD 1 for every year. The company later abandoned this model, probably due to competition from emerging free instant messaging apps.

Why does WhatsApp never use advertisements?

Advertisements are a distraction and hamper user experience. Simple. However, since it was acquired by Facebook for USD 19 billion in 2014, use of advertisements has been a subject of controversy by the app.

Jan Koum one of the cofounders of WhatsApp (the other is Brian Acton) left Facebook in April 2014 in what media reports attributed to his disagreement on the introduction of adverts as well as Facebook’s use of customer data on the app. Until today, it seems he use of adverts has been shelved.

WhatsApp Business API

The company introduced WhatsApp Business to leverage on the needs of companies and entrepreneurs to ease instant communication with their customers. This was also a free to use communication tool, at least for a while.

The main aim of its introduction was monetise WhatsApp in the future after evaluating customer feedback. By October 2020, more than 175 million people message a WhatsApp Business account every day, according to the company.

WhatsApp then released a statement to confirm that indeed, WhatsApp would no longer be free for everyone. “We’ve provided the WhatsApp Business app and WhatsApp Business API to help businesses of all sizes manage their chats. We’ve listened to feedback on what’s worked and believe WhatsApp can help make messaging the best way for consumers and businesses to connect,” the company said.

The app has taken the decision to start charging business customers for some of the services, with plans to expand free end-to-end encrypted text, video and voice calling for the more than two billion people currently using WhatsApp.

WhatsApp Business advantages include provision of a host of tools to businesses to access company insights and metrics.

It remains to be seen how businesses will pick up the paid model. The COVID-19 pandemic has shown how important instant messaging and video conferencing are to a changing world.