In today’s digital world, I’ve sent over 100 messages through WhatsApp in just 24 hours, arranging family plans, collaborating on work projects, and chatting with friends. Despite how routine these activities might seem, each message I sent was encrypted, securely transmitted, and processed by WhatsApp’s expansive network of servers located in data centers around the globe. This infrastructure requires substantial financial investment and operational upkeep. Yet, WhatsApp, with its nearly three billion users, remains completely free for individuals like me.
The question that arises is: how does WhatsApp manage to run such an extensive, high-tech operation without charging its users? The answer lies in a sophisticated business model that capitalizes on corporate clients, supported by its parent company, Meta, the social media giant behind Facebook and Instagram.
The Core Revenue Model: WhatsApp for Business
While individual users can enjoy WhatsApp without ever paying a cent, the platform’s true revenue comes from businesses. Over the past few years, WhatsApp has evolved into a key tool for corporate customer communication. Businesses can now interact directly with their customers through WhatsApp, offering both conversational and transactional services.
Since 2022, companies have been able to set up public channels to broadcast messages to large audiences, allowing them to share news, updates, and promotions with users who opt-in. While this service is free, the real financial benefit for WhatsApp comes when companies seek personalized customer engagement. Businesses pay a premium for access to these individualized interactions, especially for managing customer service, facilitating transactions, and handling inquiries—all within a seamless messaging experience.
This is especially evident in markets like India, where WhatsApp has integrated deeply into everyday life. In cities like Bangalore, for instance, users can now purchase bus tickets and select seats entirely within a WhatsApp chat. This is part of Meta’s broader vision for WhatsApp’s future, as explained by Nikila Srinivasan, Meta’s Vice President of Business Messaging: “Our goal is to create an environment where users can complete their transactions—whether booking a flight or returning a purchase—without ever leaving the chat. Once that’s done, they can easily return to their personal conversations.”
Businesses are also tapping into another lucrative feature: the ability to link WhatsApp chats directly from online ads on Facebook or Instagram. By paying for a clickable link, companies can initiate direct conversations with potential customers, transforming advertising into an interactive experience. Srinivasan notes that this feature alone has generated several billion dollars for Meta’s overall business.
Competing Messaging Platforms: A Variety of Monetization Strategies
While WhatsApp has found success through business messaging, other platforms have developed different methods for monetization.
Signal, one of WhatsApp’s competitors known for its focus on privacy and encryption, operates as a non-profit. Instead of relying on corporate clients or charging individual users, Signal relies on donations. The platform notably received a $50 million donation from Brian Acton, one of WhatsApp’s co-founders, in 2018. Signal’s President, Meredith Whittaker, emphasizes that the company aims to eventually sustain itself through small contributions from users who value its commitment to privacy.
Discord, a messaging platform primarily used by gamers, has adopted a “freemium” model. Users can access the platform for free but must pay for premium features, such as custom emojis and high-quality video streaming. Discord also offers a subscription service called Nitro, which provides additional perks for $9.99 per month.
Snapchat, owned by Snap Inc., combines several approaches. It generates significant revenue through advertising, boasts 11 million paying subscribers, and sells hardware such as its augmented reality glasses, Snapchat Spectacles. According to Forbes, Snap also profited nearly $300 million between 2016 and 2023 from interest on its financial investments. However, advertising remains Snap’s primary revenue stream, bringing in over $4 billion annually.
Element’s Unique Approach to Secure Messaging
Another notable player in the messaging space is Element, a UK-based platform that offers a unique approach to monetization. Element focuses on secure messaging for governments and large organizations, charging these clients to use its platform on their own private servers. Co-founder Matthew Hodgson reports that Element is on the verge of profitability, with annual revenues in the “double-digit millions.”
Element’s business model is distinct from ad-driven platforms like WhatsApp, Snapchat, and Discord. Instead of relying on personal data to sell ads, Element sells its technology and allows clients to maintain full control over their own data.
The Role of Advertising in Messaging Apps
Despite the variety of business models in the messaging app market, one constant remains: advertising is a dominant source of revenue for most platforms. Even apps that prioritize user privacy can still gather a significant amount of data—such as who users talk to and when—without accessing the actual content of messages. This data can be used to create targeted ads, which are then shown to users based on their activity.
As Matthew Hodgson of Element puts it: “It’s the old adage—if you aren’t paying for the service, you are likely the product.” By using targeted advertising, platforms like WhatsApp can monetize their vast user base without directly charging individuals.