WhatsApp’s New Conversation-Based Pricing: Effective from June 2023

Starting June 1, 2023, WhatsApp will update its conversation-based pricing, affecting businesses using the WhatsApp Business API.

As a WhatsApp Business Solution Provider (BSP), ShopKey is dedicated to keeping you informed about crucial updates and modifications that could have an impact on your business. Commencing on June 1, 2023, WhatsApp will implement changes to its conversation-based pricing, which will have implications for businesses utilizing the WhatsApp Business API. Stay tuned for further details and ensure you are prepared for these upcoming adjustments to optimize your WhatsApp business operations.

In this blog:

1. What is a Conversation?
2. Types of conversations classified by WhatsApp.
3. What is a 24-hour Customer Service Window?
4. WhatsApp Business API Pricing by Use Case.
5. WhatsApp API Pricing: Choosing The Right BSP.

1. What is a Conversation?

In the past, the WhatsApp Business API used to charge businesses for each individual message sent or received from users. However, in the latest update introduced by Meta (formerly known as Facebook), they are rolling out a more convenient and transparent payment model called Conversation-Based Pricing (CBP). With this new pricing model, businesses will be billed based on the number of conversations they engage in, rather than being charged for every single message.

The conversation-based pricing (CBP) model simplifies the payment process, making it easier for businesses to manage their costs. Instead of tracking and paying for each message, businesses can now pay per conversation, streamlining their billing and optimizing their use of the WhatsApp Business API. This update aims to enhance the user experience for businesses and encourage more seamless interactions with customers on the platform.

In the WhatsApp Business API, a Conversation refers to a message thread between a business and a user. These conversations can last up to 24 hours and must be initiated either by the business or the user.

During this 24-hour window, all incoming messages from users are free for the business. The business can respond to these messages without incurring any charges. However, after the 24-hour period has elapsed, if the business initiates a message or responds to a user’s message, it becomes chargeable. Businesses will be billed for these messages based on the conversation-based pricing (CBP) model, which simplifies the payment process by charging per conversation rather than per message.

This setup encourages timely and responsive communication between businesses and users within the 24-hour timeframe, as it allows for cost-free interactions during that period. Businesses need to be mindful of this time limit to optimize their communication and manage costs effectively.

Is there anything free?

Earlier each WhatsApp Business Account (WABA) received 1,000 free conversations every month, which can be user or business-initiated conversations.

Note that effective June 1, 2023, the 1,000 free conversations will only be limited to Service Conversations i.e. User-Initiated Conversations.

If you have more than one number linked to your WABA account, 1,000 free conversations will be shared between all your numbers.

As of March 1, 2023, businesses are not charged for conversations initiated by users via click-to WhatsApp ads or Facebook Page call-to-action buttons. Additionally, the 24-hour customer service window will be extended to 72 hours when customers message you through these free entry points.

During this messaging window, all messages sent are free, including WhatsApp template messages. That said, let’s look closer at the different types of conversation.

2. Types of Conversation classified by WhatsApp

Further, a conversation is broadly classified into two categories

2.1 User-Initiated Conversation (UIC) — Service Conversations

Service conversations or user-initiated conversations are initiated by customers. However, WhatsApp only charges businesses when they reply to the message. Once a customer sends a message, a 24-hour customer service window opens and businesses can send any type of message within that window.

If businesses send message templates during this service conversation, they will be charged for business-initiated conversations. Let’s go into the details of Business-Initiated Conversation now.

2.2 Business-Initiated Conversation (BIC)

In the WhatsApp Business API, when a business initiates a conversation by sending a message to a user using a template message, it is considered a business-initiated conversation. Template messages are pre-approved message templates that businesses can use to send specific types of information to users, such as order updates, appointment reminders, shipping notifications, and more.

Messages that start a business-initiated conversation will require a message template. The approval process for message templates typically takes some time, usually ranging from 15 minutes to 3 hours. During this period, WhatsApp reviews the template to ensure that it complies with its guidelines and policies. Once approved, the business can use the template to send messages to users as part of their business-initiated conversations.

The template approval process is put in place to maintain the quality of messages sent by businesses and to prevent spam and misuse of the platform. Businesses must follow WhatsApp’s guidelines for message templates and ensure that their communications are relevant, valuable, and compliant with WhatsApp’s policies.

Business-initiated conversations, including those with template messages, are typically used for important updates and transactional messages. These messages are initiated by the business and are charged based on the conversation-based pricing (CBP) model, which is the pay-as-you-use model introduced by WhatsApp.

Indeed, once a customer responds to a business’s template message, it opens up the opportunity for the business to continue the conversation and send any type of message to the customer, regardless of whether it is a template message or not. These subsequent messages will be considered part of the same conversation thread and will be charged accordingly by Meta (formerly known as Facebook).

Once the initial conversation is established, businesses can use it to provide further information, address customer inquiries, offer support, or engage in any other relevant communication. This flexibility encourages businesses to maintain ongoing and meaningful interactions with their customers through WhatsApp.

The three business-initiated conversation categories are:

• Marketing conversations: Send promotional offers, product announcements, and more to increase awareness and engagement. Any BIC that does not qualify as an authentication or utility conversation would also fall under this category.
• Utility conversations: Keep customers updated with important information like account and order updates, and transactions, including post-purchase notifications and recurring billing statements to customers who have opted in.
• Authentication conversations: Facilitate secure account access by sending customers verification codes or one-time passwords at multiple steps during the login process, such as account registration, account recovery, and integrity challenges.

3. What is a 24-hour Customer Service Window?

All conversations are measured in fixed 24-hour sessions. A conversation starts when the first business message in a conversation is delivered, either initiated by the business or in reply to a user message. Businesses and users can exchange any number of messages, including template messages, within a 24-hour conversation session without incurring additional charges. Each 24-hour conversation session results in a single charge.

Important points to remember –

• The rates for conversation-based pricing vary depending on the region and the country code of the user. In Indonesia, WhatsApp charges an average of $ 0.030/ BIC & $ 0.019/ UIC.
• The charges will be different, depending on who initiated the conversation. (The business or the end-user). Check the rate chart further in this blog.

4. WhatsApp Business API Pricing by Use Case

Conversation charges differ based on the message template category. When a template is delivered, a new conversation of that category is opened and businesses are charged according to that category.

If a business sends message templates from different categories within an ongoing business-initiated conversation, they will be charged two separate pricing based on the conversation categories involved. However, sending multiple templates of the same category will not result in additional charges.

If a business sends a template message in an ongoing service conversation or replies to a customer with a template message, a new conversation based on the template category will be initiated. Note that this does not apply when replying to messages that come from the free entry points discussed earlier.

Country-wise Cost per Conversation in USD:

You can find the Country-wise cost per conversation in different currencies on Meta’s official website.

As a business, paying conversation charges to WhatsApp for chatting with customers is inevitable. However, you can avoid additional fees imposed by some WhatsApp BSPs. Unlike other providers, ShopKey does not charge any markup per message or conversation. This makes ShopKey the most economical and Business Friendly Broadcasting Platform.

4.1 User initiates the Conversation —CBP for Support Teams

Support teams are responsible for responding to inquiries quickly. Since they mostly reply to inbound conversations, they will benefit from service conversation pricing.

Because WhatsApp only charges businesses for one message in a Service Conversation if they reply within 24 hours, support teams can use this window to solve customer inquiries without worrying about the number of messages sent and received.

If resolutions go beyond the 24-hour window, WhatsApp will charge additional user or business-initiated conversation charges.

Example 1 — When a User initiates the Conversation

A user initiates a conversation at 10 AM, Monday, thereby opening a 24-hour session window.

The business texts back at 5 AM, Tuesday. Since the business replies within the 24-hour session window, they will pay only for one User-initiated conversation beginning at 5 AM, Tuesday.

Now, let’s suppose the business once again messages the user at 4 PM, Tuesday. Notice that the business texts within 24 hours of the UIC that started at 5 AM Tuesday. So, the business won’t be paying anything for this message.

Now, the user responds at 3 PM, Wednesday. This time notice that the user replies to the message after the 24-hour conversation period ends.

If the business wants to continue the conversation, they’ll have to pay for….if you guessed UIC, you’re right. Notice here that the session window stays open 24 hours from the user’s last message. That’s why it will be UIC.

4.2 Business Initiates the Conversation — CBP for Operational Technical Implementors

Operational technical implementors are engineers that monitor and process operational data. They use WhatsApp to send transactional notifications such as One-Time Password (OTP) to confirm payments, reset passwords, and more. All such messages will be considered and charged as per Authentication Conversations.

4.3 Business Initiates the Conversation — CBP for Marketing Teams

Marketing teams use WhatsApp to broadcast promotional messages to their audiences. Each message sent by a marketing team counts as a business-initiated conversation. For this reason, sending messages in masses can become quite pricey with the current WhatsApp Business pricing model.

While there is no additional cost to send subsequent messages after the first business-initiated message, WhatsApp’s Business Policy is strict about businesses using the platform for spam.

Since business-initiated conversations can be expensive, marketing teams should try to save on costs by choosing a BSP that doesn’t charge a markup fee per message sent.

Example 2 — When Business initiates the conversation

Let’s consider that a business initiates the conversation at 10 AM Monday with a pre-approved template message. Here, the conversation begins as soon as the business sends the message to the user and the business will pay for one BIC.

Now, the user responds at 10:30 AM, on the same day. Will the business pay for another conversation?

No!

Since the user responded within 24-hours of the beginning of the conversation, there will be no extra charges.

The business now responds at 10:30 A.M. Tuesday.

Now, it’s been 24-hours since the business initiated the conversation. So, for which conversation do you think the business would pay for now? The business would now pay for a user-initiated conversation.

Why didn’t the business pay for business-initiated conversation? This is because the session window which started at 10;30 AM, the previous day was still active.

Thus, the business overall paid for two conversation this time, one business-initiated and another user-initiated conversation.

4.4 User initiates the Conversation — CBP for After-Sales Teams

After-Sales Team often start a conversation once they get have to resolve a customer query either for warranty claims or after-sale operational issues. These conversations are usually user-initiated.

Example 3- Example including Two User-initiated Conversations

A user initiates a conversation at 10 AM, Monday, thereby opening a 24-hour session window.

The business texts back at 5 AM, Tuesday. Since the business replies to the user’s message within the 24-hour session window, the business will pay for one User-initiated conversation beginning at 5 AM, Tuesday.

Now, let’s suppose the business once again messages the user at 4 PM, Tuesday. Notice that the business texts within 24-hours of the UIC that started at 5 AM Tuesday. So, the business won’t be paying anything for this message.

Now, the user responds at 3 PM, Wednesday. This time notice that the user replies to the message after the 24-hour conversation period ends.

If the business wants to continue the conversation, they’ll have to pay for…?

If you guessed UIC, you’re right. Notice here that the session window stays open 24 hours from the user’s last message. That’s why it will be UIC.

The business texts back at 6 PM, thus beginning another User-initiated Conversation, charged separately.

Thus, the business overall paid for two user-initiated conversation this time.

5. WhatsApp API Pricing: Choosing The Right BSP

As a business using the WhatsApp Business API to communicate with customers, you will indeed incur conversation charges from WhatsApp based on their conversation-based pricing (CBP) model. However, additional fees imposed by WhatsApp Business Solution Providers (BSPs) can vary depending on the service provider you choose.

ShopKey distinguishes itself from other providers by offering a fee structure that is transparent and customer-friendly. Unlike some other BSPs, ShopKey does not charge any setup fees, hosting fees, or markups per message or conversation.

This means that with ShopKey, you can enjoy the benefits of WhatsApp Business API communication without worrying about any hidden or extra charges beyond WhatsApp’s standard conversation charges.

Choosing a WhatsApp BSP like ShopKey which provides a straightforward pricing model can help businesses manage their costs more effectively and ensure a hassle-free experience while engaging with customers on the WhatsApp platform. With ShopKey you can enjoy all of WhatsApp’s features like sending broadcasts, setting up interactive messages, and streamlining business processes with advanced automation.

Further Reading

That’s all you need to know about the WhatsApp API cost for businesses. If found this reading interesting, check out the following articles:

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