WhatsApp Business Model: How WhatsApp Makes Money

This post may contain affiliate links and I may receive a small commission if you make a purchase using these links – at no extra cost for you. Please read my disclaimer here.

WhatsApp may be known as the world’s most popular messaging app, but it does more than just allow you to chat with your friends and loved ones. WhatsApp is great for even forwarding files and links to playing minigames with your contacts. This popular messaging app sets the standard for new communication trends.

There are over 2 billion monthly users on WhatsApp, which proves that it’s a total game-changer when it comes to staying connected. Plus, Whatsapp’s engagement model is a must-have for entrepreneurs to take advantage of some exciting new opportunities.

How did WhatsApp start?

WhatsApp all started because one of the founders, Jan Koum, kept getting terrible phone service and missing important calls. In 2009, Jan and his friend Brian Acton came up with WhatsApp – an app that would let people message each other without all the network hassle

It wasn't smooth sailing at first – big competitors were already out there, and they needed to get people hooked. But the app was super easy to use, and people started telling their friends about it. Before you knew it, everyone with a smartphone wanted a piece of the action!

What’s great about WhatsApp is the app’s simplicity. No ads, no fancy distractions – just a great way to chat. That's what made it such a hit, and why it just kept growing.

WhatsApp Business Model: How WhatsApp Makes Money

WhatsApp’s user base

With over 2 billion people using it every month, WhatsApp is basically the king of messaging apps. WhatsApp is very user-friendly and compatible with most, if not all, devices.

WhatsApp isn't just for one age group. People of all ages use it to stay in touch, but it's especially huge with young adults: over half of everyone aged 18-34 worldwide is tapping away on WhatsApp.

If you want a messaging app with global reach and a massive user base, WhatsApp is the undisputed champion.

Other WhatsApp products

WhatsApp is more than just a regular messaging app, and it actually boasts other products best for businesses and payments. Here are some other WhatsApp products you might want to check out:

WhatsApp Business

Think of WhatsApp Business as the beefed-up version of regular WhatsApp, made especially for businesses. It's got all these extra tools to help smaller businesses look professional and give their customers a great experience.

For starters, it lets you create a proper business profile, so customers can easily find things like your address, phone number, and website.

Plus, you can set up automatic messages, so even if you're busy, people will get a quick reply and know you're on it. Most importantly, It's free to message anyone, anywhere. No more worrying about crazy international calling fees.

Businesses all over the globe are getting in on this. You've got delivery services taking orders and sending updates through WhatsApp, online stores confirming purchases and shipping details, and even doctors' offices booking appointments. 

These are just a few ways WhatsApp Business is making things easier for businesses and their customers. 

WhatsApp Business Model: How WhatsApp Makes Money: WhatsApp Pay

WhatsApp Pay

Imagine being able to pay your friends (and get paid back!) right inside WhatsApp. That's basically WhatsApp Pay. It's a way to send and receive money securely within the app.

Just link up your bank account or debit card, and poof! – you can start paying your contacts without any fuss. Plus, they really take security seriously, so your financial info stays private.

Why is WhatsApp Pay a big deal? Here's the thing:

  1. 1
    WhatsApp is huge. You could potentially reach way more people to pay and get paid from.
  2. 2
    Businesses can make it super easy for customers. Think ordering stuff or settling bills, all within a chat conversation.
  3. 3
    No extra apps needed. That means fewer things to download and keep track of.

WhatsApp Pay could change the game. That means better sales and happier customers. And for us regular folks, paying friends for dinner or splitting bills gets way easier – no more awkward "I owe you" moments!

Basically, WhatsApp Pay is a sign that we're moving even closer to that cashless future everyone's talking about.

WhatsApp business model: How WhatsApp makes money

WhatsApp's strategy for making money is unique and has evolved over time. Here's a breakdown of how they pull it off:

Targeted advertising

Think of ads on WhatsApp like hidden gems. Instead of being in your face all the time, they strategically appear within the "Status" feature. This is where users share photos, videos, and text updates that disappear after 24 hours – much like Instagram or Snapchat stories.

By placing ads here, WhatsApp ensures they reach people who are actively using the app. This makes those ads more valuable to businesses willing to pay for exposure.

WhatsApp Business API

This behind-the-scenes tool is where the big bucks come in. The API allows businesses of all sizes to integrate WhatsApp directly into their customer support, sales, and operations. Imagine the following scenarios enabled through WhatsApp chats:

  1. 1
    A clothing store helping you find the perfect outfit and taking your order
  2. 2
    A restaurant taking your reservation and confirming the details
  3. 3
    A doctor's office scheduling appointments and sending reminders

This kind of seamless customer interaction benefits both businesses and their customers. WhatsApp charges fees for this powerful service, creating a valuable and substantial revenue stream. 

The old subscription model

In its early days, WhatsApp did charge a small annual subscription fee of $0.99 after the first free year

However, they made a bold move in 2016 to ditch this model. This decision cemented their commitment to a user-friendly experience and paved the way for more creative (and potentially more lucrative) revenue streams. 

What makes WhatsApp different

Most messaging apps rely heavily on advertising, leading to cluttered interfaces and potential annoyance for users. WhatsApp stands apart by offering valuable tools for businesses while keeping the core messaging experience clean.

This balanced approach builds trust with their massive user base and creates long-term stability.

WhatsApp Business Model: How WhatsApp Makes Money

WhatsApp's monetization strategy

WhatsApp's core challenge lies in its need to generate revenue while maintaining the trust and loyalty of its massive user base. They've struck a cautious balance, but it's a constant tightrope walk.

Advertising

WhatsApp wisely understands that bombarding users with ads would lead to frustration and potentially drive people away. By carefully placing ads within the "Status" section, they create a valuable advertising space without cluttering the core messaging experience.

Privacy and data 

It's likely that WhatsApp leverages some user data collected by their parent company, Meta, to make ads more targeted. This creates an ongoing tension between privacy and the need to deliver relevant ads.

Working with businesses

WhatsApp's focus is shifting towards becoming indispensable for businesses. As discussed earlier, the WhatsApp Business API is a core component of this strategy, offering a range of powerful features for businesses to adopt.

They understand businesses are willing to pay for tools that streamline communication and customer service

Challenges and uncertainties

WhatsApp's monetization path isn't without obstacles:

  1. 1
    Privacy vs. targeting: Finding the perfect balance between delivering relevant ads (which require some level of user data) and maintaining a strong privacy stance is an ongoing challenge.
  2. 2
    Subtle, non-intrusive ads: Ads within the app need to grab attention without feeling intrusive or disruptive. They won't be successful if users learn to ignore them completely.
WhatsApp Business Model: How WhatsApp Makes Money: Meta acquisition

Meta’s acquisition of WhatsApp

Meta’s (formerly known as Facebook) $19-billion acquisition of WhatsApp in 2014 was a massive gamble that's paying off. Here's what made it important:

  1. 1
    Popularity = profit potential: WhatsApp's huge (and growing) global user base was its core value. Meta saw this as a massive audience they could tap into for business and marketing purposes.
  2. 2
    Business communication revolution: Meta envisioned WhatsApp becoming the ultimate tool for businesses to connect with customers. This, more than anything, justified the enormous price tag.
  3. 3
    Integration pros and cons: Closer ties with Meta gave WhatsApp access to advanced targeting capabilities. But, it also led to concerns around data sharing and privacy.
  4. 4
    The need to monetize: After the acquisition, the pressure was on to make money. This has led to features like WhatsApp Business API and will likely lead to further business-focused options in the future.
Use chatbots for lead generation

Future plans for WhatsApp’s business model

It's not just about chatting anymore – WhatsApp has big plans to become a place where you can shop, pay, and handle all sorts of daily tasks.

  1. 1
    Helping businesses thrive: They're building tools for businesses to easily showcase products, handle customer questions, and even take orders right within a WhatsApp chat conversation. It'll be like having a store right inside the app!
  2. 2
    Shopping made easy: Imagine browsing clothes, finding the perfect gift, and buying it all without ever leaving WhatsApp. This is the type of shopping experience they aim for.
  3. 3
    Making payments convenient: WhatsApp Pay wants to make sending and receiving money as easy as sending a message. Think paying friends, buying stuff online, maybe even paying for coffee in person – all through WhatsApp.

These can help businesses get a huge customer base, and we get the ease of doing everything in one familiar app. WhatsApp needs to make these go smoothly, keep shopping safe, and convince everyone they can trust them with their money. 

If they pull this off, WhatsApp could replace a bunch of other apps. Imagine doing most of your daily online tasks without ever leaving your favorite chat app! 

FAQs about WhatsApp

What is WhatsApp?

WhatsApp is a free-to-use messaging app that includes features that can send text messages, voice memos, make voice and video calls, pictures, documents, and many other media files.

What is WhatsApp Business?

WhatsApp Business is a completely different app from the traditional WhatsApp. It's specifically made for small businesses to easily communicate with their customers. 

The best thing about WhatsApp Business is you can shoot off quick responses, automate messages, and use labels to keep everything organized. It's a total lifesaver - your customers will love how easy it is to chat with you!

What are the ways from which WhatsApp makes money?

Its revenue stream is mainly linked to its business features like the WhatsApp Business app and its API.

These offer companies special tools to interact with their clients. It monetizes business accounts and services, while maintaining the messaging platform free for individuals.

Furthermore, advertising is another source of revenue integrated within the Status feature to assist businesses promote their goods and services.

Is WhatsApp free to use?

Yes, WhatsApp is completely free to download and use for personal messaging.

How many people currently use WhatsApp?

As of 2024, WhatsApp has over 2 billion active users worldwide.

Is WhatsApp secure to use?

WhatsApp is end-to-end encrypted which ensures user privacy and security.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}