Facebook-owned WhatsApp has announced it is dropping its $1 annual subscription fee and turning itself into a completely free service. It has pledged not to turn to ads as well.
The small charge was introduced a few years ago as a way to bring revenue to the platform without crippling it with ads. The modest $1 a year charge is designed to seem trivial to an individual user but the dollars add up when considering WhatsApp’s giant audience of over 990 million people.
WhatsApp has numerous B2B applications, such as internal communications within a B2B firm, or harnessing the app for customer service, such as using it as a helpline.
According to WhatsApp, the approach to revenue hasn’t worked out all that well though. Because a large portion of WhatsApp users live in developing parts of the world, many people don’t have a debit or credit card number to pay their contribution with, preventing them from using the service and cutting their connections to friends and family. By removing the charge, WhatsApp will become more appealing to users around the world.
The company said in a blog post:
For any years, we’ve asked some people to pay a fee for using WhatsApp after their first year. As we’ve grown, we’ve found that this approach hasn’t worked well. Many WhatsApp users don’t have a debit or credit card number and they worried they’d lose access to their friends and family after their first year. So over the next several weeks, we’ll remove fees from the different versions of our app and WhatsApp will no longer charge you for our service.
WhatsApp is now developing other ways to monetise its platform but has promised users the change won’t lead to the introduction of third-party advertisements and in-app interstitials. Instead, it says it is creating tools that will let people use WhatsApp to communicate directly with businesses and organisations, a strategy that sounds very similar to what parent company Facebook is doing with Facebook Messenger.
WhatsApp suggests its service could be used to talk directly with a bank about a potentially fraudulent transaction or discuss a delayed flight with an airline. The app could become a hub for all kinds of short communication, no longer restricted to conversation with friends and family.
Facebook Messenger already has support for this kind of functionality. Alongside offering chats with business representatives, it lets friendsexchange money at the tap of the button and includes a human-poweredvirtual assistant called ‘M’ to simplify common tasks. In 2015, Facebook expanded Messenger’s reach by turning it into a completely standalone app,eliminating the need for a Facebook account to use the service.
The company’s strategy with WhatsApp now seems to be on a similar trajectory. Already an established platform with more users than Messenger, Facebook seeks to make WhatsApp more accessible than ever while expanding its functionality and investigating new ways of making money from a service soon to claim one billion users.
Originally published on Digital Journal by James Walker. Copyright 2016.
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