WhatsApp Business API in 2024: Definition, Benefits & Pricing
WhatsApp Business API (application programming interface) has been accessible to large and medium-sized businesses since 20181 to help them in client engagement. Given that WhatsApp is the most popular messaging program in the world, with over 2 billion active users, using it as a communication tool is advantageous for many businesses (see Figure 1).
Despite its advantages, many marketing professionals have limited information concerning WhatsApp Business API. To close the information gap, we have prepared this comprehensive guide that:
- Defines WhatsApp Business API.
- Explains which companies can benefit by using the WhatsApp API (benefits and use cases).
- Illustrates, WhatApp’s pricing with an example.
- Explains how businesses can engage with their customers by using WhatsApp API (Template messages).
- Informs executives regarding the KPI they should watch out for (phone number quality).
- Demonstrates the easiest way of creating a WhatsApp business API account for you.
- Introduces the best practices while you choose a WhatsApp Business Partner.
What is WhatsApp Business API?
WhatsApp Business API is the solution of Meta for marketing efforts of medium-sized and large enterprises. WhatsApp API helps companies to engage with their customers using WhatsApp’s interface. With the aid of WhatsApp Business API, companies may increase their online sales and customer experience by:
- Providing quick responses to thousands of people simultaneously via Whatsapp chatbots that can be deployed via API (see Figure 2).
- Providing a green check which means customers engage with an official business account not a fraud account (see Figure 2).
- Mass broadcasting, such as sending push notifications in a short duration.
- Integrating with other business tools, such as CRM, so you can send data-driven messages to your customers.
- Supporting multiple logins (More than one person can use).
- Sending customized messages to your customers (conversational commerce) regarding:
- New products,
- Shipment details,
- Payment details,
- Chart cart abandonment and more.
Figure 2: An example of WhatsApp hospitality chatbot that engages with a user.
How is it different from WhatsApp Business App?
WhatsApp business App is designed for small businesses. Therefore, it aids in smaller-scale marketing efforts for businesses. When compared to WhatsApp Business API, the primary features business apps lack are.
- The Whatsapp Business App cannot integrate with other business software/tools such as CRM. Therefore, sending messages according to the segmentation of your customers must be performed manually (see Figure 3).
- Green check. Which reduces the level of trust and the customers might end up thinking the account is a scam.
- The busşness app allows only one person to login. So, it is not suitable if more than one person should use it for marketing campaigns.
- Chat automation functions are limited in the business app.
Figure 3: WhatsApp Business API vs Business App.
Which companies can benefit from WhatsApp Business API?
Medium and large businesses can automate their communication processes with WhatsApp Business API. You may decide whether the WhatsApp Business API will be beneficial for your business based on how many chats you can complete using it. An increased number implies that API has more advantages.
Although it is mainly used for e-commerce or marketing purposes of companies. It is possible to use API for other departments’ benefits such as HR.
Here are 5 use cases of the API:
Partnering with WhatsApp can be beneficial for many retail/e-commerce firms while engaging with their customers.
For example, the tyre company CEAT uses WhatsApp chatbots to suggest items based on the user’s responses thanks to intent recognition (see Figure 4). The number of leads has increased by 542% and cost per lead dropped by 70%. as a result of the initiative.
Figure 4: Sales chatbot recommends products by understanding user intent.
It is crucial for companies in the hospitality industry to respond to their customers in a timely manner. WhatsApp API can help companies in this regard. For instance, Oyo Hotels:
- Answer customer queries including FAQs via WhatsApp chatbots (see Figure 5).
- Send payment information via WhatsApp.
- Provide an opportunity for customers to make their bookings on WhatsApp.
Figure 5: Oyo’s WhatsApp chatbot answers customer queries.
Governmental entities must inform the public to handle situations when there is misinformation. For instance, in the time of the COVID-19 pandemic, there was misinformation2 regarding:
- Impact of vaccines and more.
4. Financial services
Banks and insurance companies can also benefit from WhatsApp to better engage with their customers (conversational banking). Customers can create accounts or reach details of their balance via WhatsApp chats (see Figure 7).
Figure 7: An example of WhatsApp API’s application in financial services.
5. HR department
The main goal of HR is to manage human capital and help each person reach their maximum potential. People’s inquiries that come from operational processes such as hiring can disturb them to focus on this ultimate goal.
Thanks to the WhatsApp Business API. HR personnel can automate answering some queries (see Figure 8). Thus, you can augment your workforce to let them focus on more value added tasks.
Figure 8: WhatsApp API application for HR.
Our Top 7 WhatsApp Chatbot Examples from Different Industries and 10 Conversational Commerce Use Cases for Different Industries articles can help you to identify further WhatsApp API application areas.
What is the cost of using WhatsApp Business API?
Firms should be aware of the costs before deciding whether or not to undertake an investment. The variable cost of using WhatsApp API is the fee you need to pay per conversation.
What is the definition of a conversation according to WhatsApp?
According to WhatsApp, a conversation begins when the company or a client sends the first message. It counts as one conversation the following 24 hours after the first message. This means businesses do not pay an additional price during this 24-hour messaging session regardless of how many messages are sent or received.
After a 24-hour period, WhatsApp considers a business interaction with the same user to be a new conversation. Thus, businesses should pay for this engagement.5
Another important point is WhatsApp charges different prices for conversations that are initiated by users (customers or potential customers) and conversations that are initiated by businesses.
A user should send the initial message. Businesses have 24 hours after receiving the initial message to respond in free-form messages. Free-form messages mean that companies are not required to respond to customers using a predefined template and are free to communicate with individuals as they use their own personal WhatsApp accounts (see Figure 9).
Figure 9: An example of a user-initiated conversation.
The firm should send the initial message (see Figure 10). To be able to send an initial message, firms must use one of WhatsApp’s message templates.
Figure 10: An example of a business-initiated conversation.
- Country-specific charges: The user’s country code determines the cost of the chats. Rates for both user- and business-initiated chats differ depending on the location (see Figure 11).
Figure 11: Market specific costs of WhatsApp Business API for the top e-commerce markets.
WhatsApp Business API cost calculation example
Consider following situation:
- All the users you interact with are located in the US or Canada (so $0.0147 per business-initiated conversations and $0.0088 per user-initiated conversations).
- Within a month you initiated 9728 business-initiated conversations.
- Within a month users started 4272 conversations.
- Composition of first 1000 free conversations as follows:
- 728 business-initiated conversations.
- 272 user initiated conversations.
For such a case monthly cost of using WhatsApp Business API becomes $167.5 (see Figure 12).
Figure 12: Steps of calculating WhatsApp Business API cost.
Is there any WhatsApp Business API messaging limit?
When firms verify their Facebook Business Account, they reach tier 1 messaging capabilities. Thus, they are able to send up to 1000 messages every day. Keep in mind that this restriction only applies to business-initiated conversations. When businesses reach tier 1 limitations, WhatsApp business automatically adjusts your messaging tier. And increase your conversation limit.
4 Common WhatsApp message templates
As we mentioned before, to be able to start business-initiated conversations, firms must use WhatsApp message templates that are approved by Meta.
Facebook tend to approve the following message templates:
- Marketing related templates: These templates let firms send personalized notifications, discounts, introduce new products etc.
- Login info template: Many e-commerce custom apps or websites generate one time passwords for their customers to let them login and then determine their own passwords. This message template is designed to send one time password via WhatsApp.
- Transactions related templates: Thanks to these templates firms can inform users concerning:
- Transaction history,
- Order updates,
- Shipping information etc.
- Alerts related templates: These message templates let firms to send alerts regarding the goods/services. For instance, in Figure 10 an airline alerts its customer concerning a delay and new departure time.
Message templates’ status
Message templates are qualified within five different categories by WhatsApp (see Figure 13):
- Pending: Implies WhatsApp is assessing your template.
- Approved: When your template is ready to send to the users.
- Rejected: When your template is assessed and does not match the quality expectations of WhatsApp API workers.
- Flagged: Implies phone number quality is low.
- Disabled: A message template’s status changes to disabled when it is flagged, and its quality rating does not rise within a week. A disabled message template can neither be sent nor edited.
Figure 13: Five status of message templates.
Phone number quality rating
WhatsApp Business Platform categorizes phone number quality rankings within 3 buckets:
Through user feedback on your “business-initiated communications,” WhatsApp evaluates the phone number quality metric. For instance, if you send messages that are irrelevant to your customers, they start to block your messages. In such cases, your phone number quality decreases to medium or low.
When your rating falls low and stays there for one week, you cannot send your existing message templates anymore. Therefore, it is an important metric that marketers should watch.
What is the easiest way of creating a WhatsApp Business API account?
The easiest way of creating and having a verified WhatsApp Business API account is collaborating with WhatsApp Business Partners, which are third-party solution providers with expertise on the WhatsApp Business Platform. As of today, there are more than 50 WhatsApp Business partners that can help you in the process.10
Despite helping to create WhatsApp business accounts, WhatsApp Business partners tend to be conversational AI/chatbot or e-commerce marketing companies therefore, they can design WhatsApp chatbots or other automated messaging strategies as well as template messages for your business.
Although WhatsApp business partners take care the most of the procedures for creating a WhatsApp Business account, there are 2 steps you should handle:
- Determine a business phone number that is not registered on WhatsApp.
- Set up your Facebook Business Manager account and complete Facebook business verification. With the help of Facebook Business Manager, you can manage all of your advertising-related commercial pages and accounts in one location. You can also give your staff members full or restricted access by designating them as “Facebook Business Manager or Managers.” As a result, Meta is aware of the appropriate person to contact inside your business.
How should you pick a WhatsApp Business Partner?
The selection of a suitable WhatsApp Business Partner can be challenging. Nevertheless, there are some metrics and capabilities that help you while selecting the appropriate vendor:
- Number of language vendor’s platform support: In a global world, it is beneficial for marketers to engage with customers via their mother language. Therefore, we advise companies to check vendors’ supported languages as a metric.
- NLP capabilities: People prefer two-way interactive communication. Therefore, you might prefer an AI-driven chatbot over predetermined mass messaging capabilities that can understand user intent and send personalized recommendations.
- Omnichannel: In the future, you might decide to scale up your automated marketing to improve customer satisfaction. Therefore, it is better to collaborate with a vendor that can deploy tools on communication mediums other than WhatsApp, such as:
- Other communication applications.
- Custom mobile apps.
- Emails and SMS.
- Assess case studies: Check whether or not the vendor has experience in your industry.
- Assess the benchmarking of third parties: Third parties do data-driven benchmarking analysis which can let you eliminate some vendors.
Figure 14: Summary of our conversational commerce benchmarking.
To learn more about how you can improve your e-commerce practices with WhatsApp API, reach us:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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