There is a saying that goes if you hang around the barbers for some time, you probably will get a haircut sooner or later. In the same context if you hang around with tech enthusiast you probably might have heard someone ask a question like How does WhatsApp make money or what is their business model?
The green app needs no introduction in Uganda and it is among the top messaging app in the world at the moment. Its growth rate is more exponential because when one person in a social group downloads and advocates using the app, many new users download the app in order to communicate with the original person. These new users then encourage other members of their other social groups to use the app.
What is WhatsApp Business Model?
Unlike other apps, WhatsApp business model is not simple, WhatsApp is a free, cross-platform and end to end encrypted instant messaging app available in almost all smartphones. Since it’s initial release there were no plans to show Ads for monetization and still, there are no ads on the app. However, there have been speculations that Facebook will roll out Ads in the Apps status featured by 2020. It’s just rumors and we shall wait to see how it unfolds.
READ ABOUT: 6 Hidden But Really Helpful WhatsApp Features
So, How Does WhatsApp make money?
Ever since buying the platform in 2014, Facebook has been trying different approaches to monetize the use of the app including the infamous subscription model i.e. by charging an annual fee of 0.99$.
Despite the struggles, the team has been able to refine the process and come up with different features and affiliate apps to generate more money for its parent company Facebook. Let’s have a look at some of them.
1.WhatsApp Business
In January 2018 WhatsApp released a standalone business app targeted at small business owners, called WhatsApp Business. The aim was to allow companies to communicate with customers who use the standard WhatsApp client.
Facebook has also introduced WhatsApp Enterprise Solution for bigger companies with global customer bases, such as airlines, e-commerce retailers and banks, who would be able to offer customer service and conversational commerce (e-commerce) via WhatsApp chat, using live agents or Chabot. WhatsApp will be providing multiple business APIs for companies to build a solution or a product for their company.
Customers might never be charged and service may remain free for life but definitely, Business will be paid to Facebook for using WhatsApp Business solution to increase their business. There are more than 3 million companies already using WhatsApp Business app and adding more companies every day.
2. WhatsApp Payment
WhatsApp Payments is a peer-to-peer money transfer feature that is currently only available in India. WhatsApp has received permission from the National Payments Corporation of India (NPCI) to enter into a partnership with multiple banks in July 2017 to allow users to make in-app payments and money transfers using the Unified Payments Interface (UPI).
Now, people will have the option to use a single app to do their daily money transfer while they chat and send media file on the same app. how cool is that? WhatsApp surely going to get their commission in return to the payment transfer facilitating and they have already launched the feature last month in India as well. We shall wait and see how people embrace the technology and the impact it will have on other channels of payments.
3. WhatsApp Cryptocurrency
WhatsApp has shown its interest in entering into the cryptocurrency business. On February 28, 2019, The New York Times reported that Facebook was developing an in-house cryptocurrency that would be incorporated into WhatsApp.
The project reportedly involves over 50 engineers under the direction of former PayPal president David Marcus. This “Facebook coin” will reportedly be a stable coin pegged to the value of a basket of different foreign currencies.
Cryptocurrency is said to be future and WhatsApp is already preparing for it. Having more than 1.5 billion active users in over 180 countries will finally going to pay off Facebook in the longer run.
What’s More In The Near Future?
$1 Subscription
Facebook has tried but very soon they recalled the yearly subscription option. However, who knows what’s coming next. There is no other app which can stand against WhatsApp at this moment. WhatsApp may charge in subscription basis and make good money. Considering its current active users Facebook can simply make over a billion per year if it ever goes paid app.
In-App Ads
Currently, there are no ads on WhatsApp and they haven’t announced their interest in Ads based revenue model like other messenger services. However, they still have the option to sell ads in the future. But the policy of WhatsApp says that it’ll be charge free and ads free forever.
