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WhatsApp free Service

Facebook-owned WhatsApp will not charge a fee after one year of use

The announcement also implies that the Facebook-owned WhatsApp may potentially be forfeiting hundreds of millions in annual revenue. Photo: AFP

 There is good news for WhatsApp users—the popular messaging app will not charge a fee after one year of use. “We’re happy to announce that WhatsApp will no longer charge subscription fees,” the company said on Monday in a blog post .

WhatsApp has always been free to download and use for the first year. In fact, original users of the app, who joined WhatsApp when it started out six years back, were given a free lifetime service. But in recent years, the company introduced a subscription fee of 0.99 cents after the first free year. Technology website Recode reportsthat it may be a few weeks before the payments infrastructure is completely out of all versions of the app and if you’ve already paid the 99 cents for the year then there won’t be a refund, though subscription fees will cease immediately.

The announcement also implies that the Facebook-owned WhatsApp may potentially be forfeiting hundreds of millions in annual revenue. The messenger app that allows a quick, easy and inexpensive way to send messages, photos and videos, particularly popular in Europe, parts of Asia and South America, has seen incredible growth over the past few years and is just weeks away from hitting the billion user milestone, according to figures reported by Statista . It has currently 990 million users and growing.

Although the fee is negligible, the company admits that it has harmed its growth, particularly in developing countries where access to banking services is not so good. According to a report in The Guardian , developing markets are a key focus area for Facebook and WhatsApp since Messenger, Facebook’s home grown messaging service, has a strong penetration in the western markets, particularly the US. In contrast, WhatsApp leads the way in developing nations, including Brazil, India, Indonesia and South Africa.

The blog post reiterates the same: “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.”

Does this mean then that the company will stay afloat by generating revenue via third party advertising?

“The answer is no. Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today—through text messages and phone calls—so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.”

This strategy sounds uncannily familiar to the strategy adopted by Facebook for its Messenger service—overhauling it to make it a one-stop shop to communicate with people and businesses across the world.

Interestingly, while both Messenger and WhatsApp are different in appearance, it is these differences that lend themselves to strengths that are complementary. WhatsApp relies more on the old-school SMS messaging, while Messenger is a hip, instant messaging service replete with rich media. “Messenger works better in places that have good data connectivity, while WhatsApp, by contrast, has achieved much of its success by appealing to price-sensitive consumers who want to avoid paying a fee for every text-message sent.”

It also makes perfect business sense for Facebook to roll out WhatsApp as a free service and focus on chat apps, as messaging apps account for 91% of all time spent on mobiles and desktops by US users according to a recent report byComscore.

Facebook purchased WhatsApp in 2014 for $19 billion and since then has been on a growth trajectory. Being part of the Facebook stable allows WhatsApp access to the social network’s powerful infrastructure, which includes financial and technical support that it needs to grow, while WhatsApp gives Facebook access to a nearly 1 billion user base. Together, the two can become a formidable combination.

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