How does WhatsApp make money? It’s free – with some tricks

In the last 24 hours, I sent over 100 WhatsApp messages. Most of them were mundane—planning with family, discussing work, and chatting with friends. However, they all benefited from WhatsApp’s strong security features. Each message was encrypted by default and processed through powerful servers worldwide.

This operation isn’t cheap, yet neither I nor my contacts paid to use the service. WhatsApp has nearly three billion users globally. So, how does it make money?

WhatsApp is owned by Meta, which also owns Facebook and Instagram. Personal accounts are free, but WhatsApp generates revenue from businesses that want to communicate with users like me.

Since last year, companies can create free channels on WhatsApp. This allows them to send messages to subscribers. However, businesses pay a premium to interact with individual customers for conversations and transactions. For example, in Bangalore, India, users can book bus tickets and choose seats through WhatsApp.

“Our vision is to streamline tasks in a chat thread,” says Nikila Srinivasan, Meta’s VP of business messaging. “Booking tickets or making payments should be easy and seamless.”

Businesses can also pay for features that link WhatsApp chats from ads on Facebook or Instagram. This is reportedly worth “several billions of dollars” to Meta.

Other messaging apps use different models. Signal, known for its security, is a non-profit that relies on donations. It received a $50 million boost from Brian Acton, a WhatsApp co-founder. Its president, Meredith Whittaker, aims to rely on small donor contributions.

Discord, popular among gamers, uses a freemium model. Basic features are free, while advanced options, like a $9.99 Nitro subscription, come at a cost.

Snap, which owns Snapchat, combines several revenue streams: ads, subscriptions (with 11 million paying users), and product sales like augmented reality glasses. Snap has made nearly $300 million in interest from its finances since 2016. Yet, advertising remains its main revenue source, generating over $4 billion annually.

The UK-based firm Element charges governments and large organizations for access to its secure messaging system. Clients run the service on their private servers. Co-founder Matthew Hodgson says Element is close to profitability with “double-digit million” revenue.

Hodgson believes advertising is still the dominant model for messaging apps. Many platforms track user behavior and interactions, targeting them with personalized ads. This means that even with encryption, apps can learn a lot about users without accessing message content. As Hodgson states, “If you’re not paying for the service, you’re likely the product.”