Meta's WhatsApp hikes international OTP charges; to affect Amazon, Google, Microsoft

Meta-owned WhatsApp has updated its pricing strategy for international one-time passwords (OTPs) to increase revenue from its enterprise services. 

The platform has launched a new category named 'authentication-international' messages, with a revised price of Rs 2.3 per message in India and Indonesia, effective from June 1. This adjustment represents a 20-fold increase from its previous charges but still positions WhatsApp's rates as more economical compared to traditional SMS costs for enterprises.

Affecting global companies' communication budget 

The pricing overhaul will affect the communication budgets of global corporations such as Amazon, Google, and Microsoft. These companies have previously leveraged WhatsApp as a cost-effective alternative for authentication purposes amidst the high costs associated with international SMS in India.

With the introduction of this new pricing category, these international businesses will now face a significant increase in costs for sending OTPs via WhatsApp.

Why is this important?

The move highlights WhatsApp's strategic interest in the Indian market, showing the importance of the country in the enterprise messaging sector, which is currently valued at over Rs 7,600 crore.

Despite the rising popularity of over-the-top (OTT) messaging platforms, traditional SMS still dominates nearly 90% of this market. OTP verifications, crucial for various digital transactions and services, account for approximately 80% of all enterprise messaging traffic.

What's the background?

The decision comes amid ongoing debates between tech giants and Indian telecom operators over the definition of "international traffic" and the associated SMS pricing.

The contention revolves around the classification of messages and the fairness of pricing mechanisms, with no clear consensus on what constitutes international traffic. This has led to disputes over whether companies, especially those with data servers overseas but registered in India, should be subject to higher international SMS rates.