WhatsApp Business Model – How Does WhatsApp Make Money?

You’re also curious, right, about WhatsApp being the most popular messaging app in the world. Not showing any ads, nor are they charging us any amount. So how does WhatsApp make money?

Today, WhatsApp is owned by Meta and is used by over 3 billion people every month. But still having so much server cost and everything around. Why is it still okay to burn money on WhatsApp and not make any money from it?

I’m Aryan Jalan – a marketing expert from India. I also like to know how every other startup is making money. So let’s find out in this article – How WhatsApp actually makes money.

How Does WhatsApp Make Money?

From the beginning, the founders of WhatsApp, Brian Acton and Jan Koum, were not in favour of running ads or introducing games.

Founders believed that ads would compromise the user experience and wanted to keep the app simple and ad-free to ensure a great user experience.

In their initial days, to cover the costs of running WhatsApp, they introduced a small subscription fee of $1 per year. In some countries, the first year was free, and the fee applied only from the second year.

Surprisingly, after charging a subscription fee, there was yet no change in its number of users, and this revenue strategy worked so well that WhatsApp became profitable within just three years.

At the peak of this business model, WhatsApp had around 700 million users and was generating roughly $700 million annually.

Why Did Facebook Spend $19 Billion On WhatsApp?

In 2014, Facebook acquired WhatsApp for $19 billion, making it one of the largest tech acquisitions at the time.

Soon after the acquisition, the subscription-based model was removed, and WhatsApp became completely free for all users.

But the main question is: Why would Facebook pay $19 billion for an app that had no direct commercial benefits, like ads or subscriptions, and was free to use?

After buying WhatsApp, Facebook (now Meta) shifted its focus to growing the user base. And in the meantime, the Meta team is finding new ways to earn money from WhatsApp. Their team came up with these ideas to make money from WhatsApp.

1. WhatsApp Business API

To understand more about WhatsApp Business API, we first need to understand the WhatsApp Business App.

In 2018, WhatsApp launched the WhatsApp Business app. The app is completely free for businesses like normal WhatsApp apps, with no subscription fee and allows businesses to create verified profiles.

Once the verified profiles are created, businesses can share their website links and Facebook pages. And can use features like auto-responders and integrate their landline numbers with WhatsApp.

But the real game-changer in WhatsApp’s business model wasn’t just helping small businesses set up their profile. But an advanced system that enables brands to automate and streamline conversations – with WhatsApp Business API

But what exactly is this WhatsApp Business API?

Think of the automated messages you receive from companies like Jio, BookMyShow, or clothing brands. Those businesses pay WhatsApp to send automated messages to their large customer base.

These messages could be about: new offers, order updates, customer service or even direct links to their website. Example shown below

This WhatsApp integration also helps businesses in handling customer queries automatically using chatbots and improving overall customer engagement.

While normal messaging is free for users, WhatsApp charges businesses for using its API. This fee depends on the type of conversation and the country where the messages are sent. You can check the pricing details with this link: https://business.whatsapp.com/products/platform-pricing

Note: WhatsApp mainly charges for business-initiated chats. This means companies pay for the messages they send to customers, not the ones they receive.

WhatsApp also charges businesses for slow responses. If a business replies within 24 hours, it’s free. If the reply comes after 24 hours, WhatsApp charges a fee per message.

2. WhatsApp Payments (WhatsApp Pay)

Today, most people prefer online payments and rely on various apps for their transactions. Recognising this trend, WhatsApp entered the space and introduced its own payment system, WhatsApp Pay, in 2020.

WhatsApp Pay allows users to send and receive peer-to-peer (P2P) payments directly within chats.

However, this service is currently available only in India and Brazil, not worldwide.

In India, WhatsApp Pay works through UPI and is free for users. It supports only domestic INR transactions, no international transfers. Users just need to link their bank account and verify their mobile number to start sending and receiving money.

WhatsApp earns money by charging businesses a transactional fee for processing payments. They also earn a commission on each business-related transaction.

In Brazil, WhatsApp supports P2P payments through Meta Pay, in partnership with local payment institutions.

Note: WhatsApp Payments is also available in Singapore, but only for paying local businesses, not for P2P transfers.

3. Click-to-WhatsApp Ads

WhatsApp later introduced Click-to-WhatsApp ads, which let businesses run ads that open directly into a WhatsApp chat. When a brand boosts a post on Instagram or Facebook, they can add a “Message on WhatsApp” button.

If someone taps it, the conversation starts immediately inside WhatsApp instead of sending them to a website or form.

This direct jump into a chat makes it much easier for businesses to answer questions, handle enquiries and close sales without delay.

Companies pay Meta to run these ads, and because they push users straight into WhatsApp, they have quickly become one of the platform’s fastest-growing revenue sources.

Click to WhatsApp ads are growing rapidly:

• About 60% year-on-year revenue growth in quarter 3, 2025
• A $10 billion yearly revenue run-rate in 2024

This feature works well because it cuts out extra steps. Customers don’t need to open a website. They can start chatting on WhatsApp instantly.

4. Channels (Future Predictions)

Another recent feature is Channels, which lets users receive updates from businesses or creators in a one-way broadcast. While Channels aren’t monetised yet, Meta sees big growth potential there as well.

Also, WhatsApp might soon start showing ads in its Status section, similar to Instagram Stories. Right now, you can already run ads for Facebook and Instagram directly through the WhatsApp Business app.

5. Indirect Revenue Through Data

WhatsApp has over 2 billion users, and its parent company, Meta, uses this data to help target ads on its other platforms, such as Facebook and Instagram.

This doesn’t mean WhatsApp sells your data. Instead, it uses the information to understand how you interact with Meta’s ecosystem and training their LLM models.

Using this data, Meta shows you personalised ads based on your interests and activity, improving its ad targeting.

WhatsApp Funding Rounds

WhatsApp has raised $58.2 million across three funding rounds. It is backed by two major investors, Sequoia Capital and Dragon Gateway.

Date	Funding Amount	Round	Investors
October, 2009	$250k	Seed	–
April, 2011	$8M	Series A	Sequoia Capital
June, 2013	$50M	Series C	Sequoia Capital

Source

Services Offered By WhatsApp

Here’s a list of critical services provided by WhatsApp:

1. Messaging

Users can send text, photos, videos, documents, and voice messages to individuals or groups.

2. Voice and Video Calls

WhatsApp allows users to make free voice and video calls to other WhatsApp users globally over an internet connection.

3. End-to-End Encryption

WhatsApp employs end-to-end encryption, ensuring only the sender and receiver can read the messages, enhancing privacy and security.

4. Status Updates

Users can post brief updates in photos, videos, or text that disappear after 24 hours, similar to Stories on other platforms.

5. Group Chats

Users can create groups to chat with multiple contacts simultaneously, sharing messages, media, and documents.

6. Location Sharing

Users can share their real-time location with friends or in group chats, allowing others to track their movements for a set period.

7. WhatsApp Web/Desktop

 It offers a web-based and desktop application allowing users to access their WhatsApp account on a computer browser or app.

8. Payments (in selected regions)

WhatsApp allows users in some countries (India and Brazil) to send and receive money using WhatsApp Pay.

9. WhatsApp Business

WhatsApp Business offers extra features for small businesses, like business profiles and automated messages. It also has quick replies and catalogue sharing.

10. Smart Assistant (AI-powered)

In April 2024, WhatsApp introduced a “Smart Assistant” that users can chat with to ask questions or create content, such as images. It uses Meta’s LLaMA 3 model and is also available on Facebook and Instagram.

11. Meta AI

In September 2024, WhatsApp expanded Meta AI support, allowing users to send text and photos to Meta AI for tasks like identifying objects, translating text, answering questions, or editing images.

Whatsapp Competitors

1. Telegram 

2. Discord

3. Signal

4. WeChat

5. Slack

Interesting Facts About WhatsApp

1. On average, users spend more than 30 minutes a day on the app, making it the third most-used app globally, just behind YouTube and Facebook.

2. WhatsApp supports more than 60 languages, catering to a diverse user base in various regions worldwide.

3. The number of WhatsApp users in India is projected to reach 795.67 million users by 2025.

4. WhatsApp ranked 2nd globally in total downloads in December 2024.

5. WhatsApp’s new broadcast channels feature is now available in 150 countries.

6)- More than 150 million messages are exchanged on WhatsApp every single day.

Frequently Asked Questions Of WhatsApp

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