WhatsApp announced a set of new tools today for business owners to communicate to its roughly 1.5 billion users around the world -- for a small fee. Depending on what country the user is in, prices will range from half a cent to nine cents per message, to deliver services like boarding passes, shipping confirmations, and live chats with customer support.
These prices are higher than what business pay for SMS messages, but in many regions of the world, WhatsApp has displaced SMS as the texting platform of choice (along with Facebook Messenger and iMessage), so there's less of the competition that would induce lower fees.
According to the Wall Street Journal, Uber, Singapore Airlines, and Wish are among the 100 or so companies that have already been beta-testing the new tools. Ordinarily, WhatsApp messages use end-to-end encryption so that the app maker has no access to the contents of a text, but the Journal reports that participating business may be authorized to store chat logs and to use them to build customer profiles anyway.
Advertisements are also slated to start showing up in the Status section next year, where WhatsApp users post temporary collections of pictures, videos, and messages, a feature that nearly one third of its users engage with regularly.
In the years since Facebook's $19.3 billion acquisition of WhatsApp, the latter has not been under particular pressure by its parent company to generate profits. Instead, the mantra was "grow the user base," as it was in the early days of Facebook itself.
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For the first two years of Facebook's ownership, WhatsApp charged one dollar a year to use its app, or even $1 total to obtain lifetime access. Then in January 2016, WhatsApp dropped all fees and became completely free to download and use indefinitely. At the time, it had no advertising model and no other revenue model beyond that $1 fee.
But more recently, WhatsApp's growth has slowed in the face of competitors like Snapchat and iMessage -- not to mention Facebook Messenger and the Facebook-owned Instagram. And Facebook itself has faced steady political headwinds and difficulties retaining teens and millennials. If WhatsApp has reached its saturation point, then it may be time to switch from collecting more users to collecting more dollars.
- WhatsApp announced that it will start charging business half a cent to nine cents for messages sent to its users within the app. The exact price will vary by country.
- WhatsApp will also start showing advertisements in the Status section, starting next year.
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