This is how WhatsApp plans to make money
On Wednesday, WhatsApp announced the launch of its first revenue-generating product, WhatsApp Business API. While WhatsApp for Business already allowed businesses to interact with customers, provide support, and grow a relationship, WhatsApp will now charge businesses for select WhatsApp Business features. Notably, this is WhatsApp's first revenue stream since it scrapped subscription fees, and it might prove to be a gem. Here's more.
Details of the changes made to WhatsApp for Business
This update will let businesses programatically send information like shipping confirmations, boarding passes, event tickets etc. to customers. But here's a catch: It will let businesses to respond to messages from users for free for upto 24 hours, but will charge them a fixed rate after that. Additionally, businesses will also be allowed to run Facebook ads that link to their WhatsApp numbers.
The rate at which businesses will be charged
According to the BBC, messages sent by businesses to customers 24 hours after receiving a request for information will be charged at 0.5 cents to 9 cents, depending on the country a user is based in.
Reportedly, WhatsApp might start running ads on its 'Status' feature
Further, TechCrunch reports that WhatsApp, from 2019 onwards, is also looking to run ads in its Snapchat Stories clone, 'Status', which sees over 450 million daily active users. This will be an additional source of revenue. Given this user base, running ads in between statuses would allow WhatsApp to make a tonne of money, especially if they make some of these ads unskippable.
The post-24 hour charging strategy might prove to be genius
If Facebook can pitch WhatsApp Business API as an alternative to customer service call centres, it stands to gain much in the long-run. Additionally, the post-24 hour charging strategy seems genius insofar as it will incentivize businesses and create a growth feedback loop - if customers get quick replies, they might start preferring WhatsApp Business over phoning and other alternative channels of information.
Is WhatsApp Business API a potential game changer?
WhatsApp for Business already has over 3 million clients, and companies like Uber and Booking.com have already started using the new facilities. If WhatsApp Business API becomes the preferred mode of business-customer interaction, WhatsApp could soon start charging for all replies, or for replies that exceed a certain volume threshold. Apart from making millions, this would also mark a paradigm shift in business-customer interactions.
To be noted: WhatsApp claims end-to-end encryption, WSJ claims otherwise
Insofar as data security is concerned, all messages exchanged between businesses and customers will be end-to-end encrypted, according to WhatsApp's blog. However, the Wall Street Journal has also reported that businesses will be able to store copies of messages elsewhere in a decrypted state. The veracity of WSJ's claim, however, cannot be confirmed till WhatsApp issues a clarification.
