Instant messaging service Whatsapp has announced that it will go completely free for its users across the globe permanently. The popular messaging app which is believed to have more than a billion users said it will stop charging US $1 per year as a subscription fee. It said the service won’t introduce any third-party ads for monetization and instead will monetize through selling itself as a service for companies to communicate with their customers.
“Nearly a billion people around the world today rely on WhatsApp to stay in touch with their friends and family…WhatsApp will no longer charge subscription fees,” the Facebook acquired service said on its official blog. Though the company has said it was going to experiment with new models to stay ad-free, the real intention could be something towards wider expansion.
The fact is whether you’ve been required to pay WhatsApp’s annual fee or not depends on when you joined the service, and even what country you live in. Up until July 2013, WhatsApp charged iPhone users a one-time fee of $1 to download the app. But then, the company brought iOS in line with Android and made the app free to download and use for the first year, followed by a $1 annual fee thereafter. But as a goodwill gesture to those already using WhatsApp, it gave existing users lifetime access to the service. Even if someone changed their device, as long as they kept the same mobile number, they would never have to pay another cent.
While announcing the decison, WhatsApp co-founder Jan Koum revealed another reason for ditching the $1 fee by saying that some people, particularly those in developing markets, don’t have credit cards and therefore aren’t physically able to pay the $1 fee. Also the scrapping helps explain why in the App Store description it says somewhat enigmatically that it “may” charge after the first year. Basically, some people paid and some didn’t.
By getting rid of the $1 fee, WhatsApp can explore alternative and potentially more lucrative revenue streams such as corporate partnerships and bring in consistency to its business model.