WhatsApp kills $1 subscription fee

The messaging app is waving goodbye to its subscription, and has promised not to replace it with third-party ads.

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WhatsApp CEO Jan Koum at Mobile World Congress in Barcelona in 2014.

Albert Gea/Reuters/Corbis

If a dollar saved is a dollar earned, WhatsApp users can make themselves a quick buck in 2016.

The popular messaging app on Monday killed its $1 subscription fee, which converts to 70p or AU$1.45, making its service free to all users globally. In the past WhatsApp has been free to use for the first year, following which the nominal fee has been charged on annual basis. But no more.

"As we've grown, we've found that this approach hasn't worked well," the company explained in a blog post. "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."

WhatsApp is one of several messaging apps, along with the likes of Viber, WeChat and Line, that flourished in the wake of 3G Internet access becoming almost ubiquitous. After it was bought by Facebook in 2014 for $19 billion, the service continued to grow, and with 900 million users worldwide it currently leads the pack.

Its next challenge will be to keep up with its competitors, which are starting to integrate third-party services into their apps, particularly banking and money transfer. This could ultimately open up new revenue streams for WhatsApp, although these third-party business partnerships are uncharted territory for messaging apps.

The company categorically said it will not be replacing the subscription fee with third-party ads, a common method used to make free apps profitable. Instead, it says, it will introduce new ways for you to communicate with businesses and organisations that you want to hear from. These interactions could be with your bank about recent transactions, or with an airline about a delayed flight.

It's the same approach parent company Facebook is using with its own Facebook Messenger application, which in December started letting users book an Uber directly through the app.

WhatsApp said it will be testing tools to this effect later this year, although speaking at DLD in Munich, the company's CEO and founder Jan Koum admitted "we haven't written a single line of code yet," Re/code reports.

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