Whatsapp is removing its annual subscription subscription fee. Founder Jan Koum said that the decision has been taken to eliminate the barriers some users faced in using the service.
“It really doesn’t work that well,” Koum said. He noted that while a buck a year might not sound like much, access to credit cards is not ubiquitous. “We just don’t want people to think at some point their communication to the world will be cut off.”
Until now, WhatsApp has been free for the first year and 99 cents for additional years. Koum stated that the company will stop charging subscription fees immediately but it will likely be a few weeks to fully take the payments infrastructure out of all versions of the app. But users who have already paid for availing the service, wont be getting their money back.
To monetize, Koum said that the company will explore ways businesses can use the service to connect with individuals, without spamming and unwanted advertisements.
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 organizations 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.
According to Koum, businesses are already finding ways to use WhatsApp to reach customers, but the company could make this a lot easier.
The reason for scrapping the fee may be more than simply moving to a different revenue model. Nonetheless, no information on this front has been disclosed yet. It’s not even clear if WhatsApp plans to charge for extra services, such as special encryption, as part of its new revenue strategy. “We haven’t written a single line of code yet,” said Koum.