Cheaper OTPs, smarter chats: WhatsApp takes aim at SMS dominance

The SMS as a tool to connect with customers might be coming to an end. Last month, WhatsApp rolled out a major change to its pricing model, shifting to per-message charges and dramatically cutting the cost of authentication traffic, a clear move that challenges A2P SMS dominance.

The new model also lets businesses respond to users within a 24-hour window with free-form or utility templates, without any additional charges. This removes a key barrier to conversational messaging.

WhatsApp is moving ahead in the authentication game. Enterprises can now send OTPs at just 15-30% of the cost of an equivalent SMS in major markets such as Brazil, India, and Indonesia. That’s a game-changer for large enterprises looking to cut messaging costs. According to The Distillery, we can expect to see more businesses routing OTPs through WhatsApp first, with SMS as a fallback only when needed.

“WhatsApp’s changes are not just about pricing they represent a strategic realignment in how business messaging will function in the future. With free responses, volume-based pricing, and a powerful marketing-focused API, Meta is signalling that WhatsApp is ready to take on both SMS and emerging players like RCS and even Email in the business space.” — MEF Advisor Nick Millward

As MEF Advisor Nick Millward, says, “WhatsApp’s changes are not just about pricing they represent a strategic realignment in how business messaging will function in the future. With free responses, volume-based pricing, and a powerful marketing-focused API, Meta is signalling that WhatsApp is ready to take on both SMS and emerging players like RCS and even Email in the business space.”

Conversational messaging is set to fast-track. Removing charges for replies during the 24-hour service window WhatsApp is opening the way to two-way conversations, not just one-way notifications. This can open the door to new use cases in customer service, post-purchase engagement, and conversational commerce.

When Artificial Intelligence enters this fray, this shift in tech will scale. As message volumes grow, businesses will increasingly rely on AI agents to automate customer interactions across WhatsApp. From handling FAQs to managing entire sales flows, AI-powered chatbots are quickly becoming a core part of the channel’s value proposition.