WhatsApp Business Adds Hosting, Shopping & Pricing Tiers

Facebook is actively working to become a primary resource for small and medium-sized businesses that utilize the internet to connect with a broader audience, and its messaging platform, WhatsApp – currently serving approximately 50 million businesses and 175 million customers who message them, with a total user base exceeding 2 billion – is a key component of this strategy.

The company is now introducing three significant enhancements to WhatsApp to further develop this offering.

It is launching a system for businesses to showcase and facilitate payment for products and services directly within WhatsApp chats; it is directly competing with existing hosting providers with a new service called Facebook Hosting Services, designed to manage businesses’ online resources and operations; and, consistent with its evolving product line, Facebook will begin charging companies for utilizing WhatsApp for Business.

Facebook revealed this information in a concise blog post that lacked specific details. We have contacted the company to request further information regarding pricing, service availability, and whether Facebook will handle hosting directly or collaborate with third-party providers, and will update this article as we receive more information.

Update: Facebook has responded, and we have incorporated their replies below, integrated where appropriate.

Here is a summary of the current understanding:

Shopping Within Chats: Businesses are currently utilizing WhatsApp to share product details and initiate transaction discussions. Recent additions, such as QR codes and the ability to share catalog links within chats – implemented in July – have expanded this functionality. Simultaneously, Facebook has been broadening the methods through which businesses can display their offerings on Facebook and Instagram, most recently with the launch of Facebook Shop in August, following a similar rollout on Instagram.

This new feature appears to provide businesses with a way to leverage WhatsApp to connect to those Facebook-based catalogs, as well as other products, and then facilitate purchases, all while remaining within the chat environment.

Furthermore, Facebook will enable merchants to incorporate “buy” buttons in various locations that will direct customers to WhatsApp chats to finalize their purchases. “We also aim to simplify the integration of these features into businesses’ existing commerce and customer solutions,” the company stated. “This will be particularly beneficial for small businesses that have been significantly affected recently.”

While Facebook is not explicitly labeling this as WhatsApp Pay, it appears to be the next phase in the company’s efforts to integrate payments into the messaging app’s chat flow. This has been a complex process for the company, which launched WhatsApp Payments, powered by Facebook Pay, in Brazil in June, only to have it suspended by regulators due to non-compliance with their requirements. (Plans were in place to extend it to India, Indonesia, and Mexico.)

Facebook Hosting Services: These services will become available in the coming months, although a specific launch date has not been announced. “We are sharing our plans now while we collaborate with our partners to make these services accessible,” the company explained in a statement to TechCrunch.

This is not intended as a direct challenge to Amazon Web Services (AWS) – or at least, not yet. The initial focus appears to be on providing hosting services to the small and medium-sized businesses that already use Facebook and WhatsApp messaging, either those currently utilizing hosting services for their online presence or those who are now requiring them for the first time as business increasingly moves online.

“Currently, all businesses using our API rely on either on-premise solutions or third-party providers, both of which necessitate costly server maintenance,” Facebook explained. “This change will allow businesses to choose to utilize Facebook’s secure hosting infrastructure at no cost, reducing a significant expense for any company using the WhatsApp Business API, including our business service providers, and helping them all save money.” The company added that it will provide more details regarding data hosting locations closer to the launch.

This is a noteworthy development, given the fragmented nature of the SMB hosting market, with numerous companies – including GoDaddy, DreamHost, HostGator, BlueHost, and others – offering similar services. This fragmentation presents an opportunity for a large company like Facebook, with its global reach, growing connections to other online services for SMBs, and extensive network of data centers, to provide these services – a strategy similar to that employed by Amazon and AWS.

Facebook already maintains an “app store” of sorts, featuring partners that offer marketing and related services to businesses using its platform. It intends to expand this, offering hosting alongside these services, with the benefit that native hosting on Facebook will streamline overall performance.

“Providing this option will simplify the process for small and medium-sized businesses to get started, manage their products, keep their inventory current, and respond quickly to incoming messages – regardless of their employees’ locations,” the company noted.

Pricing Structure: To encourage wider adoption, Facebook has not charged for WhatsApp Business up to this point, but it has levied fees for certain WhatsApp business messages – for example, when businesses send a boarding pass or e-commerce receipt to a customer through Facebook’s systems. (A complete list of these prices is available here.) With the introduction of new services and businesses increasingly relying on their performance on Facebook’s platforms, it is logical for Facebook to transition to a paid model.

“Over the past couple of years, we’ve observed the significant value of the conversational nature of business messaging. Therefore, we may explore ways to update our charging structure for businesses to better reflect its usage,” the company informed us. It is important to note that this will pertain to how businesses send messages. “As always, it remains free for customers to message a business,” Facebook added.

Unfortunately, there is currently a lack of detail regarding which services will be subject to charges, the specific amounts, and the implementation timeline, making this more of a preliminary notice than a new requirement.

“We will charge business customers for some of the services we offer, which will enable WhatsApp to continue building a sustainable business while providing and expanding free end-to-end encrypted text, video, and voice calling for over two billion people,” the company stated.

For those concerned about increasing data collection, this move will, at least, help WhatsApp and Facebook maintain their commitment to avoiding advertising as a primary revenue model.

Strengthening Support for Small and Medium-Sized Businesses

These new offerings are being introduced as Facebook intensifies its commitment to supporting businesses, a move significantly influenced by the coronavirus pandemic. The pandemic has led many brick-and-mortar stores and other enterprises to temporarily or permanently close physical locations, prompting them to concentrate on utilizing online and mobile platforms to engage with customers and facilitate sales.

Acknowledging this shift, Sheryl Sandberg, the company’s Chief Operating Officer, recently unveiled the Facebook Business Suite. This suite consolidates all the tools Facebook has developed to enable companies to more effectively utilize their Facebook, Instagram, and WhatsApp presences for advertising, customer communication, and sales. Sandberg’s direct involvement in the announcement underscores the importance Facebook places on this initiative; the company is capitalizing on current trends while also aiming to diversify its revenue streams, as businesses establishing Pages are also potential advertisers.

Facebook has also been expanding the capabilities across both Facebook and Instagram, specifically designed to help both advanced users and businesses utilize the two platforms with greater efficiency. Integrating additional tools into WhatsApp represents a logical extension of these efforts.

It’s worth noting that, as previously discussed, despite widespread informal business use of WhatsApp globally, WhatsApp Business remains a relatively modest product, with the greatest adoption in India and Brazil. Facebook’s introduction of more tools for its use could not only expand business activity within those existing markets but also encourage greater adoption in other regions.

Facebook has long recognized the importance of smaller businesses. Prior to the pandemic, many retailers and restaurants often relied on a Facebook Page or Instagram Profile as their primary online presence, even foregoing the creation of a dedicated website. Furthermore, even businesses with standalone websites are often more inclined to share updates and promote their activities through social media channels rather than their own web addresses.

Facebook has also produced a video illustrating its vision for how these WhatsApp Business tools can be implemented, which can be viewed here: