The WhatsApp Business Model: How Does Whatsapp Make Money

WhatsApp’s monetization strategy has captivated the world. WhatsApp has done a great job of making sure that its app is free to use and asks for little in return. It is easy to see why people are drawn to WhatsApp. It also has another feature that has many people curious, how does WhatsApp make money? In this blog post, we will take a look at how WhatsApp makes money.

Whatsapp is one of the most popular messaging applications globally, but how does it make money? Well, the truth is that it doesn’t. Whatsapp has always been committed to its users and has always been focused on creating a network that keeps people in touch with their messages and information. Its primary source of revenue is the money they make from users who use its voice and data plans.

How-Does-Whatsapp-Make-Money

What is WhatsApp?

Previously known as “WhatsApp Messenger,” WhatsApp is a messaging application with over 1.2 billion users worldwide. WhatsApp was developed by Brian Acton and Jan Koum in 2009. Facebook acquired it in 2014 for $19 billion. It is a cross-platform application that works on most smartphones, including Android, iPhone, and Windows Phones. It also has an application on the web and on the Apple Watch.

Yet, it has been able to grow into a billion-dollar business with a unique revenue model. It makes money from its users, and it has no ads. It has been free for users for years.

WhatsApp is also a secure messaging app. It was one of the first messaging apps to implement end-to-end encryption, which means that it is very secure. It is an important feature because it allows users to communicate securely and privately.

WhatsApp’s Monetization Strategy

Too often, messaging apps make their money by selling advertising. WhatsApp has chosen not to sell ads. Instead, it charges its users for its services. It is the primary source of revenue for most messaging apps, including Facebook Messenger, Kik, and Viber.

WhatsApp’s monetization strategy is based on its users. The company’s primary source of revenue is the money that its users pay for its services. It includes the WhatsApp voice and data plans that it offers.

After Instagram and Facebook Messenger, WhatsApp is now Meta’s second most valuable asset. WhatsApp is used to generate revenue through a subscription model. It costs $1 to download and then $1 per year.

Meta eventually dropped the $1 fee and made WhatsApp a free service, figuring that consumers would use it to communicate with businesses, and businesses would cover the cost. WhatsApp’s revenue in 2021 was $86.15 billion.

Though WhatsApp’s financial statements are not publicly available (Meta does not break down its revenue by the company), Forbes estimates that potential revenue by the first quarter of 2022 will be between $27 and $29 billion. WhatsApp had more than two billion users as of March 2022.

How Does WhatsApp Make Money?

WhatsApp does not make money from advertisements. The founders despised advertisements and designed this ad-free platform with a simple focus on user experience and interface.

They wanted to build an instant messaging platform for users rather than for large corporations to place advertisements on. They had to pay their bills at the same time. As a result, they decided to create a paid version of the application, charging users an annual fee of $1.

After the acquisition, Facebook launched some really business strategies for WhatsApp’s revenue model.

WhatsApp Business

In January 2018, WhatsApp announced a new service called WhatsApp Business. This new service was designed to make businesses more efficient and effective. WhatsApp Business includes features such as real-time tracking, messaging for groups, customer support, and payment processing.

WhatsApp Business also allows businesses to communicate with their customers. The app includes integration with Slack, allowing companies to integrate with their internal messaging app. It also allows businesses to add a business card to WhatsApp and Facebook.

Verified businesses can create a business profile with essential links to their website or Facebook page, set up autoresponders, link their landline numbers to WhatsApp, and connect the WhatsApp for Business API with their product line.

The WhatsApp Business app is currently available for free download and use by all businesses. On the other hand, WhatsApp makes money through the WhatsApp for Business API.

You also like: How Does Zoom Make Money.

WhatsApp for Business API

WhatsApp for Business API is a program that allows businesses to create a custom WhatsApp-like experience for their customers. It also will enable companies to integrate their WhatsApp business accounts with their own internal apps.

WhatsApp Business API has some exciting features. It allows businesses to send text messages, photos, and videos. It also allows businesses to send stickers, links, and phone numbers. The WhatsApp Business API is currently in beta, and it is currently only available to a few select businesses.

The company limited the ability to send messages to prevent ad spam. Businesses can only send messages to people who have first contacted them. Still, the API will allow them to send shipping confirmations, appointment reminders, and event tickets to their customers programmatically. Clients such as Booking.com, Wish, and others have already benefited from the company’s efforts. But how does WhatsApp make money through API?

Charge for Slow-Replies:

It means that businesses will be able to respond to user messages for free for the first 24 hours but will be charged for every message sent after that. The fee is set, but it varies depending on the country. 

Everything after the 24-hour mark will cost anywhere from $0.05 to $0.90 per message replied.WhatsApp also collaborates with other companies to deliver its API, such as the cloud communication platform Twilio.

Also read this: How Does Signal Make Money.

Payment Monetization Channels:

WhatsApp is currently experimenting with two different payment channels:

Direct Payment:

Direct payment allows businesses to add money to their accounts. Businesses can use this to add money to their WhatsApp account, send money to a WhatsApp account, or pay for in-app purchases.

WhatsApp Payments:

WhatsApp Payments allow businesses to accept payments directly through WhatsApp. It will enable businesses to add money to their accounts, add money to a WhatsApp account, or pay for in-app purchases.

Since 2018, WhatsApp has been working on a payment solution. It finally launched a payment service in Brazil in June 2020, allowing users to pay each other and other businesses on the platform (similar to Venmo and Zelle).

Unfortunately, Brazil’s central bank halted the launch around ten days later, which stated that it wanted to “maintain an adequate competitive environment” in the payment processing industry.

In the coming months, business payments, in which WhatsApp receives a percentage of the order value, are expected. It will enable P2P payments in India, the company’s largest market by user count, in November 2020. Brazil also lifted its payment ban in May 2021, adding another country to the mix.

Instead of advertisements pointing to a website (as they do on Messenger), ads would be aimed at existing WhatsApp Business accounts that sell products and services that a user may require.

Furthermore, Meta has decided not to disclose any revenue generated by WhatsApp. Instead, any revenue figures are rolled into the company’s overall profit.

Frequently Asked Questions

How is WhatsApp’s money made?

WhatsApp does not disclose how much money it makes, but it has reported that it had $20 billion in revenue in 2018. It is expected to be one of the largest companies in the world by revenue in 2020.

How much does WhatsApp charge for Business API?

Businesses can send text messages, photos, and videos for free for the first 24 hours. After that, they will be charged $0.05 to $0.90 per message.

What is the WhatsApp Business API?

The WhatsApp Business API is a platform that allows businesses to create a custom WhatsApp-like experience for their customers. It also will enable businesses to integrate their WhatsApp business accounts with their own internal apps.

Is WhatsApp Business API free?

WhatsApp Business API is free. However, businesses will have to pay to send messages.

How much does WhatsApp Business API cost?

WhatsApp Business API is free.

Is WhatsApp Business API safe?

WhatsApp Business API is safe.

What are the limitations of WhatsApp Business API?

WhatsApp Business API has a few limitations. WhatsApp is currently experimenting with a few different options, including a “full access” option, which would allow a company to read all WhatsApp messages sent to and from its customers.

Final Verdict

We hope you enjoyed our article on how does WhatsApp make money. It is a question that many business owners ask. When you start your own business, you want to make sure you’re focused on making your business successful, not the things that seem like they will. We know that many people love WhatsApp because it is a free alternative to texting. But did you know that WhatsApp also has a revenue model? As you might already know, WhatsApp is a free app, and it is estimated that it will continue to be a free app. But they also offer premium features. We hope that this article helps you understand the business behind WhatsApp. Thank you for reading!

Christian
Christian Thomas is a die-hard business enthusiast who loves to share his ideas and experiences with other people. He writes for many websites including Christianthut.com, Entrepreneur Business Blog, and How To Start A Small Business. His passion for writing and his ability to analyze the current trends in the business industry have made him a sought-after expert. In brief, he's a marketing expert, a writer, and a small business consultant. He is working for over 10 years in the field of marketing and business development and has helped hundreds of people start their own businesses.