How does whatsapp make money uk

How does WhatsApp make money as it's free?

What’s up with WhatsApp? If you’re a user of this free messaging platform, then you might have found yourself wondering how WhatsApp makes ends meet.

Today, we’re going to explain exactly how WhatsApp makes money in the competitive realm of instant messaging.

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Table of Contents

What are the current revenue streams for WhatsApp?

Today, WhatsApp has a number of revenue streams that generate the company profits.

The vast majority of WhatsApp users will never pay a penny for being on the platform, so it’s important for WhatsApp that the paid elements continue to be successful.

Let’s take a closer look at each of these revenue streams to understand how they make WhatsApp money.

WhatsApp For Business API

One of the platform’s biggest revenue generation ventures is WhatsApp For Business API. The company has a separate WhatsApp Business App, which has been around for a while.

Just like the regular app, WhatsApp Business is completely free to use and allows companies to create a business messaging profile to add to their websites and social media accounts.

However, it’s the API (application programming interface) element of the Business App where WhatsApp makes money.

This tool lets businesses fully integrate their services with the WhatsApp platform. The API can be used to automatically send marketing, booking notifications, or general informational texts to their customers.

To use the API, businesses must sign up with one of WhatsApp’s official network providers. WhatsApp then takes a cut of the fees charged by the providers.

Signing up for the API can be an expensive investment for businesses that makes WhatsApp a lot of money in the long run.

In addition, WhatsApp added another money-making scheme to the process.

If businesses take more than 24 hours to respond to a message, then it will cost them a small fee to send a reply.

Not only does this encourage businesses to respond to support messages quickly, but it also drives new customers to WhatsApp who know that they will get a prompt reply to their query.

All of this might sound confusing, but the idea of WhatsApp For Business caught on quickly.

In the first few months after the launch, mega-corporations such as Uber and Netflix were already testing and using the system for their customer support networks.

WhatsApp Pay

WhatsApp Pay is a feature that is currently only available in India and Brazil. However, it’s likely that we’ll see a wider release sometime in the future.

WhatsApp Pay is a free service that lets users send payments directly from the messaging interface. The business they buy from then pays a percentage back to WhatsApp.

This payment platform is undoubtedly a powerful addition to the WhatsApp business model.

Any feature that improves the functionality for most users without making them pay extra is bound to be a lucrative hit.

How did WhatsApp make money in the past?

Before the implementation of the free-to-use model, WhatsApp relied on a paid subscription service to make money. Specifically, WhatsApp charged users £0.69 a year to use the service.

This might not sound like very much, but when you consider that WhatsApp had 250 million users prior to switching to the free model, it’s clear that they were taking a big risk by making that change.

Of course, the gamble paid off, and it’s become obvious that a free model with additional paid services is the most lucrative for the platform.

While it’s free for users, a common WhatsApp scam is to try and get people to pay or share bank details.

How does WhatsApp plan to make money in the future?

Going forward, it’s unclear if WhatsApp is planning to integrate more monetisation into its platform.

What we do know is that the platform will be continuing to support their Business API tool and will be expanding the payment system to more regions.

The payment system, in particular, could be a big future revenue driver for the company.

Being able to make payments directly from an instant messaging platform has lots of potential uses and is definitely a feature that users would embrace immediately.

It has also been rumoured that WhatsApp will start showing ads in the Status section of the app.

This would be a direct revenue stream and is probably something that the company is under pressure to implement.

WhatsApp’s business model is relatively unique, and it’s likely that investors would like to see more tried and trusted monetisation techniques on the app.

How much revenue does WhatsApp generate?

WhatsApp’s average revenue was estimated to be $5 billion per year at the last calculation.

This was after the platform ditched its $0.99-a-year approach and embraced its current free-to-use model.

However, when you consider that the vast majority of users pay nothing for the service, it’s clear that WhatsApp For Business and Pay features are performing quite well.

With this success, it’s highly unlikely that WhatsApp will ever move back to a subscription model for regular users.

And it’s not just the direct revenue that WhatsApp generates that’s important. If Facebook can get users on board with WhatsApp, then they can drive customers towards their other services too.

WhatsApp funding and valuation

When WhatsApp Inc. first launched, it instantly attracted the attention of venture capitalists and tech investors.

One of the key initial funders of the platform was Sequoia Capital, which ploughed $8 million into the brand in 2011. By 2013, Sequoia had invested a further $52 million.

This investment paid off big time for Sequoia when Facebook bought WhatsApp in 2014. Of course, WhatsApp has not had many funding concerns since being taken under the wing of the gigantic tech company.

Coming up with an accurate valuation of WhatsApp is difficult, especially when it’s tied in so closely with other Meta services.

With that said, if WhatsApp was to go on the market today, it’s likely that it would be worth much more than $19 billion paid by Facebook, which was a staggeringly large deal at the time.

FAQs

How does WhatsApp make money without ads?

WhatsApp currently has several revenue streams that make the company money.

This revenue generation keeps ads away from the app and ensures that millions of users can access the platform free of charge.

WhatsApp’s three main revenue streams are:

– WhatsApp For Business API
– WhatsApp Payments
– Click to WhatsApp ads

In the past, it was suspected that Facebook collected WhatsApp Data to refine their advertising across other services.

However, they have since been ordered to refrain from this, and WhatsApp announced that any data they collect will only be used to better user experience on their own platform.

Does Facebook make money from WhatsApp?

Since they own the WhatsApp brand, any money that the messaging app makes goes directly to Facebook and its shareholders.

Facebook acquired Whatsapp back in 2014 for the huge sum of $19 billion. With an investment of this size, it makes sense that Facebook would want to monetise the platform as much as they could.

Facebook was already dominant in the “free-to-use” platform space, and the addition of Whatsapp improved their market standing even more.

Facebook has a history of acquiring and improving popular brands – it picked up Instagram in 2012 and has seen its user base grow dramatically since.

How much does the WhatsApp Business API cost?

WhatsApp Business is a powerful and advanced tool that comes with a paid model.

The Business API is a big revenue stream for WhatsApp, and the quality of the service has only improved over the years as more and more companies get involved.

There are a few costs associated with the API that any business owner should be considering before making the investment. Here’s a quick rundown of the main ones:

Monthly costs: To gain access to the API, you’ll have to partner up with one of the official WhatsApp providers.

There are a number of different providers available, and they range in price quite dramatically. Some charge £75 per month for the service, whereas others ask for close to £500.

Set-up cost: Depending on the provider you choose for your Business API, you may have to pay an additional set-up fee. This is usually based on how many numbers you want to add to the network.

It’s worth noting that just because a provider doesn’t charge set-up fees, it doesn’t mean that they are going to be the cheapest in the long run.

Conversation fee: In the past, WhatsApp charged business users by the number of messages that they sent to colleagues. Now, this fee is calculated per conversation.

This is a good change that means users aren’t encouraged to squeeze lots of information into a single WhatsApp message.

Does WhatsApp make a profit?

Despite being completely free for the majority of users, WhatsApp is a platform that certainly makes money.

Most of this profit comes from the paid models that WhatsApp has implemented for businesses. However, for WhatsApp’s owner Facebook, the messaging platform has a lot of power beyond direct monetisation.

For Facebook, WhatsApp is just another addition to their selection of social media platforms.

By controlling multiple websites and apps, Facebook can drive and rotate users across all of them, boosting their revenue in the long run.

With features such as end-to-end encryption and ever-reliable servers, WhatsApp will probably continue to dominate the instant messaging application market for years to come.

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How WhatsApp Makes Money For Meta Platforms: 2 Key Ways

Education
Investing

Updated: Nov. 11, 2022By: Kimberlee Leonard

Table of Сontents

WhatsApp Basics
WhatsApp Business Model
2 Ways WhatsApp Makes Money
Bottom Line

WhatsApp is a free messenger service that is used by over 2 billion people around the world. Because it’s free for consumers, it begs the question, how does WhatsApp make money? The Meta Platforms subsidiary makes money through WhatsApp for Business and WhatsApp Pay.

oatawa/iStock via Getty Images

WhatsApp Basics

WhatsApp was founded in 2009 by Brian Acton and Jan Koum. It’s a free secured messenger service that allows domestic and international communication among users on a secured network. It’s currently headquartered in Menlo Park, California with Meta Platforms, Inc. (META) as the parent company. Facebook changed their corporate name to Meta Platforms in 2021.

Facebook acquired WhatsApp in 2014, making it the largest subsidiary of the company next to Instagram and Facebook Messenger. WhatsApp does not trade independently.

Tip: As a subsidiary of Meta Platforms, investors would buy META to gain exposure to the business of WhatsApp.

As a messenger service, WhatsApp is robust. Users can send text messages, voice messages, make both voice and video calls, share images and documents, and share one’s location. Essentially, anything a user needs to communicate with another is available via WhatsApp.

Users like the platform because it is free with no ads and offers end-to-end encryption, with the company stating that it is not able to read or capture messages.

WhatsApp Business Model

The product of WhatsApp is simple: a robust personal messaging service. How it makes money is a little different than many others in the arena. WhatsApp started as a 'freemium' service, where users were able to send messages for free for the first year and then renew at an annual $0.99 fee. They have shifted from this business model and stayed away from in-app advertising. Instead, they make money through WhatsApp for Business and WhatsApp Pay.

There are a number of competitors in the market, all who have different business models for revenue generation. Some of the top competitors are LINE, Kakao, Kik, and Skype.

LINE makes money from in-game purchases and other services such as stickers.
Kakao generates revenues from advertising.
Kik gives users rewards for watching advertisements.
Skype is a subscription service for worldwide calling.

Note: Both Acton and Koum have left WhatsApp after disagreements with Facebook over the way the app would be monetized.

2 Ways WhatsApp Makes Money

1. WhatsApp for Businesses

While the service is free for consumers to use, businesses can sign up for WhatsApp for Business to use the platform for sales and support. The WhatsApp Business API is used by major brands such as Netflix, Uber, and Wish. It originally encouraged businesses to use the platform and provide quick responses. WhatsApp would charge businesses for delayed responses. So while the business could respond for free within 24 hours, it would be charged a fee for responses later than that.

The new business API for WhatsApp for Business applies charges based on a messaging tier. The charges are:

First 250,000 messages: $0.0085 per message
Next 750,000 messages: $0.0083 per message
Next 2 million messages: $0.0080 per message
Next 3 million messages: $0.0073 per message
Next 4 million messages: $0.0065 per message
Above 10 million messages: $0.0058 per message

Essentially, the more messages a company sends, the cheaper the rate is.

2. WhatsApp Pay

WhatsApp Pay is a payment feature similar to PayPal. Users can send money to friends, family, and businesses for free. The party receiving the money is charged 3.99% per transaction.

Like other money sending services, this app connects to a linked bank account where the funds are taken from or deposited. This service is currently only available in India and Brazil on specific devices.

Tip: Look for WhatsApp to expand WhatsApp Pay in the near future.

You can’t invest in WhatsApp on its own but you can understand how the messenger giant makes money for its parent company, Facebook. WhatsApp is becoming a larger revenue source as it competes to maintain its market share on secure messenger services.

This article was written by

Kimberlee Leonard

244 Followers

Kimberlee brings professional experience to her writing. She started as a FINRA Series 7 broker and later transitioned her career into owning an insurance agency and preparing taxes.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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What is a comfortable salary in the UK?

It is not difficult to determine the standard of living based on how much you earn and what area you live in. Are you thinking about what a comfortable salary is in the UK? Read on to find out more about comfortable wages in the UK. The word "comfortable" varies from person to person. Whenever this happens […]

Filed for work by Elites February 23, 2023

What interesting jobs pay well in the UK?

What is an interesting job that pays well in the UK? You can still choose a job that is fulfilling and enjoyable depending on your hobbies. This post will tell you about fun jobs that will pay well in the UK. Multiple jobs are satisfying, generating a secure and secure income and rewarding professional experience. Are they in […]

Filed for work by Elites February 23, 2023

What professions are in demand in England?

Demanded vacancies simply speak of those professions that are really lacking in the labor market. There are disadvantages in these professions. So, in England, what jobs are in demand? As the job market continues to evolve, it's important to keep abreast of the latest trends in what jobs are in demand in England. […]

Filed for work by Elites as of February 23, 2023

What is the best paid unskilled job in the UK?

What is the best paid unskilled job in the UK? Well, there are a few of these jobs that you can get even if you don't have the skills, but still earn the best sums. Fortunately, many well-paid professions do not require experience. In some cases, you can learn on the job as part of an apprenticeship […]

Filed in Job by Elites as of February 22, 2023

Can I get a job after studying in the UK?

Can I get a job after studying in the UK? Yes you can. However, there are certain requirements that you must meet and qualifications that you must have. Many international students intend to stay in the UK after their studies because the country's employment rate is over 75%. UK returned […]

Filed for work by Elites as of February 22, 2023

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