WhatsApp Ends its Conversational Pricing Experiment: How Will this Affect its Business Messaging Market?

November 2024

Conversational Commerce

Alex Webb

Senior Research Analyst

WhatsApp reports to have more than two billion users around the world and is the largest OTT (Over the Top) messaging app in countries such as Brazil, Mexico, India, and Indonesia. WhatsApp is also one of the largest channels for OTT business messaging, with a large international market presence not offered by competing messaging apps, such as WeChat, LINE, KakaoTalk, and Zalo.

With the evolution of the messaging landscape, WhatsApp has once again updated its pricing model for business messaging, with Meta seeking to make its business messaging offering more competitive against both SMS and the emerging RCS (Rich Communication Services) platform.

Unlike SMS and RCS, WhatsApp distinguishes between different types of messages in its pricing, rather than having a single price for all messages. This is achieved by dividing its messages into different templates, which are:

• Marketing: Enterprise-initiated conversations to market a product or service to consumers, such as relevant offers to customers who have opted in. This also includes any enterprise-initiated conversation which does not qualify as an authentication or utility conversation.
• Utility: Enterprise-initiated conversations relating to a transaction, including post-purchase notifications, and recurring billing statements to customers who have opted in.
• Authentication: Enterprise-initiated conversations that enable enterprises to authenticate users with OTPs (One-time Passwords) at multiple steps during the login process, such as account registration, and account recovery.
• Service: This covers any user-initiated conversation such as a customer enquiry.

The table below outlines the recent pricing changes announced by WhatsApp at present.

Table – Recent and Upcoming Changes to WhatsApp Business Messaging, November 2024 to April 2025

Source: WhatsApp

On the 1st of November 2024, WhatsApp made service conversations free, with utility templates in the 24-hour customer service window also becoming free from the 1st of April 2025. Notably, WhatsApp will also move to charging per message for template messages, instead of per conversation, on the 1st of April 2025.

Juniper Research also notes that WhatsApp has continued to expand its use of international rates for authentication, with international rates being introduced for Egypt, Malaysia, Nigeria, Pakistan, Saudi Arabia, South Africa, and the United Arab Emirates. These prices will also be adjusted to the price per message model, instead of per conversation, on the 1st of April 2025.

Why the Return to Price Per Message Is a Welcome One

At present, WhatsApp charges enterprises per conversation, rather than per message. A conversation includes all messages delivered within a 24-hour period, with the conversation starting when the first business message is delivered and concluding 24 hours later. This approach to messaging pricing has complicated the adoption of WhatsApp Business for many enterprises. Enterprises have struggled to gauge the value they receive per conversation and have questioned why they are paying for an entire conversation in scenarios where only one message is used, such as in marketing or authentication messages. This is particularly true for those enterprises who typically use messaging channels such as SMS, where paying per message is the norm.

As a result, we expect that WhatsApp’s return to price per message will allow enterprises to more easily adopt WhatsApp business messaging, with a simplified pricing model. However, enterprises will still need to understand the different prices for each messaging template, as well as international authentication rates.

Juniper Research recommends that messaging vendors make it easier for enterprises to estimate their business messaging costs, by providing modelling tools based on historical consumer behaviour data and WhatsApp’s pricing. This will allow enterprises to easily account for unexpected costs, such as when consumers respond outside of the 24-hour customer service window, without needing significant technical expertise.

How Will the Expansion to Free Messaging Affect Enterprises’ Use of WhatsApp?

WhatsApp’s introduction of free messaging for service messaging in 2024 will be followed by free utility messages in the 24-hour customer service window in 2025. Juniper Research expects that this will provide a significant boost to enterprise adoption of OTT business messaging, especially in areas such as customer service where users will initiate conversations with the enterprise.

Moreover, the introduction of free messaging will result in a more innovative environment for WhatsApp business development. Enterprises will be able to take increased risks and experiment more with their approach to WhatsApp business messaging, with free messaging supporting the development of new use cases and services over WhatsApp.

Juniper Research also expects that the introduction of free messaging will support growth in WhatsApp’s monetisable messaging templates, such as marketing and authentication. Enterprises will be able to become comfortable using WhatsApp for their business messaging needs at low, or no, costs. Moreover, usage of the platform will also highlight the benefits of WhatsApp, such as high open rates and rich features; making it more likely enterprises will add WhatsApp as part of their wider strategy.