WhatsApp, the messaging service that Facebook bought in 2014, charges a $1 annual subscription fee after your first year of using the app. The idea here was to charge a small fee in lieu of serving up ads.
Apparently, it hasn’t worked out as well as the company hoped: On Monday, the company announced that it was dropping the annual fee and would become a completely free service for end users.
“For many years, we’ve asked some people to pay a fee for using WhatsApp after their first year,” a blog post published to the WhatsApp website reads in part. “As we’ve grown, we’ve found that this approach hasn’t worked well[…]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.”
The company cited the fact that many of its users don’t have credit or debit cards as a rationale for the change. WhatsApp is going free starting today, though it says that it may take a few weeks to phase out the fee payment system in its apps.
As for current subscribers, WhatsApp won’t offer subscription fee refunds, according to ReCode.
Although it’s becoming an entirely free service, you won’t see WhatsApp fill its app with banner ads any time soon: The company says that it’s working on “tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from.” ReCode suggests that the reworked WhatsApp will be similar to Facebook Messenger where you can chat with businesses or even make payments through the app.
Why this matters: Free is probably the way to go for a messaging app—particularly one that draws from a wide range of users of all different age groups and backgrounds. It’s not entirely clear how WhatsApp plans to make money this way, but it’s easy to see how it could: The company could charge businesses a small fee for joining WhatsApp, for example. Either way, we’ll have to wait and see how things pan out from here.