WhatsApp To Increase International OTP Charges: Here's How This Affects Microsoft, Google And Amazon

WhatsApp is moving toward increasing its slice of the enterprise messaging market pie with a significant price hike for international one-time passwords (OTPs) sent to users in India.

What to know: This change, reported by The Economic Times, introduces a new message category titled “authentication-international,” priced at ₹2.3 per message, starting June 1, 2024.

The adjustment aims to boost WhatsApp’s revenue and positions the platform as a more attractive option for businesses, balancing between the high cost of traditional international SMS and the previous flat rate for OTPs.

The new pricing strategy could have a notable impact on the budgets of global giants like Amazon, Google, and Microsoft, which have leaned on WhatsApp for a cheaper authentication channel compared to the steep international SMS fees in India.

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Previously enjoying a flat rate of ₹0.11 per OTP, these companies will now navigate a more costly landscape at ₹2.3 per message, placing WhatsApp’s rates between domestic SMS charges and higher international costs.

Why it matters: This pricing pivot highlights India’s critical role in WhatsApp’s business strategy, underscoring the country’s significance in the enterprise messaging arena, currently a booming ₹7,600 crore market. Despite the growing popularity of over-the-top (OTT) messaging services, traditional SMS still claims nearly 90% of this sector, with OTP communications making up about 80% of usage.

The backdrop to this development involves ongoing debates over the definition of “international traffic” and SMS pricing between tech behemoths and Indian telecom operators. The classification of international messages and the rationale behind associated costs have been contentious, with companies and carriers divided over fair pricing mechanisms.

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