HOW WHATSAPP MAKES MONEY?

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WhatsApp, the product, has had a crazy journey, and I mean that, like literally. Started by two founders who hated advertising and were pro-privacy, WhatsApp ended in the hands of Facebook — the one big tech giant that is most certainly not revered for user security and privacy. The next big turn of events in the WhatsApp story came in January 2016 when the service was made free for everyone. In the same blog that announced WhatsApp would no longer charge money to users, the founders of WhatsApp laid out the new vision for monetizing WhatsApp, that expectedly didn’t feature ads. “Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today’s announcement means we’re introducing third-party ads. The answer is no. WhatsApp makes money through two sources — the first being WhatsApp for Business API and the second Click to WhatsApp ads. The WhatsApp Business App helps businesses serve customers on WhatsApp, with provisions to create product catalogues as well as provide customer support. While the Business App is free to use, WhatsApp monetizes the service through the WhatsApp for Business API. Only a month after the launch of the WhatsApp Business API, big tech companies like Netflix, Uber & Wish & 100 others had already started testing the service. WhatsApp makes money by charging registered businesses for slow replies. Businesses are allowed to respond to messages from users for free for up to 24 hours but are charged a fee per message for delayed responses, which varies by country. WhatsApp’s late response charge not only incentivizes companies to prioritize providing support on WhatsApp, but also makes sure customers give preference to WhatsApp while communicating with businesses because they can expect quick replies. Once business and customers get used to using WhatsApp as their medium of communication, WhatsApp can charge for messages above a certain threshold, or cut down on the free window. Apart from charging businesses for slow replies, WhatsApp also makes money through Click to WhatsApp ads, which are not ads shown on Facebook, not WhatsApp, but these ads redirect users from Facebook to WhatsApp. Since these ads are not shown in the WhatsApp app, attributing the revenue of these ads entirely to WhatsApp would be incorrect, but it is one of the ways in which Facebook leverages WhatsApp to increase revenue.

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