How WhatsApp makes money:

WhatsApp’s primary offering is a compelling personal messaging service. Its method of making money differs slightly from that of many competitors in the market. When WhatsApp was launched, it was a “freemium” service that allowed users to send messages for free for the first year before paying $0.99 per year to continue using it. They have abandoned this business strategy and refrained from using in-app advertising. Instead, they profit

1. WhatsApp Pay
2. WhatsApp for Business

Competitors to WhatsApp: Line, Kakao, Kik, and Skype.

WhatsApp Business model and revenue stream




















It is clear that for WhatsApp to grow it is very critical to focus on WhatsApp Pay as it is the main revenue stream for WhatsApp in coming years.

Let us, deep dive, into the UPI market in India and check where WhatsApp pay is standing:

In India, the clear market leader in terms of Volume and Value is Phone Pe with a whopping 45%plus market share. It is clear that WhatsApp pay has not rooted its presence in India till now. As it contributes to just 0.1% of the market share by volume and by value.





















So it is very clear that in India Whatsapp pay has to improve because India has the highest number of users on WhatsApp worldwide with more than 480 million plus users.

Why WhatsApp Pay is not being used as expected in India

If we look at the user journey and the pain points the biggest of all is the lack of awareness. No one knows that Whatsapp has a payment option. It is neither clear from the landing page nor it has made attempt to make it clear.

If we look at below user journey and its pain points it is very clear that Awareness and Daily usage are the things that need to be improved.





















Let us have a look on which user persona WhatsApp pay can focus to make the most. From the below user persona bifurcation we can see that what are the Needs of different users and what are the pain points they face.




















What are the problems faced by users when we summaries journey and persona:
1. WhatsApp pay is not visible even on landing page
2. User find it difficult to pay on the same app where they chat which makes them insecure
3. Users find it difficult to track the expenses on WhatsApp
4. For daily activities such as buying vegetables or dairy or any item which they buy from near by kirana they are using WhatsApp for ordering and for paying google pay
5. College student find it difficult to consolidate the discounts & offer
6. For local business owner they have to track customer order and service on WhatsApp business like app but for payment and follow up they have to use a different payment app.

Why WhatsApp has a chance to at least get a fair enough share in UPI market in India
1. WhatsApp has a huge user base on WhatsApp for Business. With 15million vendors in India itself
2. WhatsApp has users base of 480 million plus users in India alone.

With such a huge penetration it is clear that WhatsApp can leverage its business with WhatsApp pay. What it can do to leverage it.

Firstly they need to fix some of the problems mentioned above on priority.

Following is the list which I think can help to pritotize and which can have maximum impact:
1. Need to change the landing page
2. Payment we can have a different page rather that included in chat
3. Integrating ordering and payment for users as well as business

What are the solution WhatsApp pay can look into:

1. Landing page




















2. Payment to be on separate page than chat




















3. Integrating orders and payment for users as well as business

1. WhatsApp for business already has such a huge user base it can leverage it for WhatsApp pay
2. User will order daily usage items on whatsapp for business account.
3. It can be through list, hand written list image or even through audio
4. Now it can use Razor blade business model to leverage whatsapp for business as blade and whatsapp pay as blade.
5. Transaction cost for business can be lowered as minimum as 1% or less. Which will help onboard more and more business.
6. For users and business whatsapp can become a one stop solution for ordering the daily items and also tracking payments and along with tracking expense.
7. It can show how much you have spend, show how much you have saved and also can set target for saving which will help to increase the stickiness.

What are the lessons we can learn:
1. There is always difference in what we think user want and how actually the user is using the product. The best way to test is through build-test-learn model.
2. It is very important to make hypothesis then test it and either cancel it out and make a new one or prove it and make a new one on the same line
3. Fragmenting business into verticals can increase revenue streams but in the process the leverage of one business vertical to other can be compromised.