WhatsApp plans to go free and ditch subscription as it approaches 1bn users

19 Jan 2016

It's a free world as WhatsApp decides to ditch subscription

Facebook-owned WhatsApp is approaching 1bn users and has revealed it plan to drop its annual 99 cents (US) subscription fee.

The company also confirmed it has no intention of adding third-party ads.

The company’s CEO Jan Koum also told the DLD conference in Munich that the company is testing a new B2C service that would allow businesses, such as Bank of America, for example, to communicate directly with their customers.

Such a move could interlock with its parent company Facebook’s plans to use Messenger as a conduit for e-commerce, and enabling brands to communicate via WhatsApp could create a trusted way for brands to talk with consumers since email is no longer trusted thanks to phishing attacks.

WhatsApp traditionally applied the 99 cents fee after a year of free use.

Koum confirmed the decision to drop the subscription fee in the WhatsApp blog.

He also confirmed that WhatsApp has no plans to introduce third-party ads.

“For many years, we’ve asked some people to pay a fee for using WhatsApp after their first year,” Koum said.

“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.

“Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today’s announcement means we’re introducing third-party ads. The answer is no.

“Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organisations 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.”

The $19bn man

Facebook agreed to acquire Whatsapp in 2014 for an estimated $19bn. Koum founded WhatsApp with Brian Acton, whom he got to know when they both worked at Yahoo.

Koum came to the US with his mother when he was 16 to escape a tense political and anti-Semite environment in his native Ukraine and initially survived through odd jobs, from babysitting to sweeping the floors of grocery stores.

At the age of 38, when Facebook acquired WhatsApp for $19bn, he signed the agreement on the door of his old welfare office in California.

WhatsApp image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years