Encrypted messaging apps such as WhatsApp, Signal and Telegram dominate global communication, serving billions of people every day.
But despite their presence and popularity, their business models remain unsettled as platforms struggle to balance user privacy with the need to generate revenue.
The paradox, analysts say, is that the very feature that makes them most valuable – end-to-end encryption – also makes them hardest to monetise.
End-to-end encryption scrambles messages so that only the sender and recipient can read them, locking out the platform itself.
This protects privacy but prevents operators from scanning content for targeted advertising, the main source of income for most digital platforms.
“While message content would be highly valuable for advertising, end-to-end encryption makes this impossible,” says Michaël Bikard, associate professor of strategy at Insead Business School in Fontainebleau, France.
“Companies have had to look for alternative revenue streams.”
But if these apps cannot find sustainable ways to make money, analysts say users may face fees, new data-sharing trade-offs, or a shift towards “super-app” models that change how people use messaging altogether.
WhatsApp business services
WhatsApp has more than three billion monthly active users globally, Meta chief executive Mark Zuckerberg said during the company’s first-quarter results in May.
It has become the most advanced in monetising its scale, with analysts estimating its business application programming interface, which allows companies to communicate with customers through the app, generating more than $1 billion annually.
“Recent initiatives by WhatsApp, such as ads in its status and updates tabs and the roll-out of paid channel subscriptions, suggest its monetisation strategies are evolving beyond purely business messaging,” Mr Bikard says.
Meta has also introduced payments and commerce features in markets such as India and Brazil.
According to Mr Bikard, these moves position WhatsApp “closer to the super-app model pioneered in Asia”.
However, he noted that Meta draws on WhatsApp metadata, such as contact networks and device information, to enhance advertising across Facebook and Instagram.
This practice has been controversial. In 2021, WhatsApp faced a backlash when it announced changes to its privacy policy requiring greater data sharing with Facebook, leading to millions of users downloading rival apps such as Signal and Telegram.
Signal stays independent
Signal has taken a different approach. The platform is operated by the non-profit Signal Foundation and is funded by donations and grants, according to its official blog.
It does not sell advertising or user data and has described this model as essential to protecting privacy.
The foundation was launched in 2018 with a $50 million loan from WhatsApp co-founder Brian Acton, who serves as its executive chairman. Signal has since relied on contributions from supporters to cover operating costs.
While the model keeps the service independent of commercial pressures, industry analysts say it leaves the app dependent on donor support, unlike revenue-generating rivals.
During the 2021 WhatsApp privacy backlash, Signal surged to the top of app store charts, with Sensor Tower reporting more than 17 million downloads in a single week.
But without revenue streams, analysts say it remains constrained in its ability to scale compared with Meta’s resource-rich model for WhatsApp.
Telegram’s uncertain path
Telegram has one billion active monthly users, according to industry tracker DemandSage, and offers Premium subscriptions and sponsored posts.
In 2024, the platform also integrated the TON blockchain to support decentralised payments and introduced Stars, a virtual currency that allows users to purchase digital goods and services in-app.
These features highlight Telegram’s ambition to move beyond chat into commerce and entertainment, though adoption remains limited.
But according to a Reuters analysis, its “route to profitability looks dubious” as the platform remains loss-making despite its scale.
The report said Telegram’s ambition to become a super-app, adding payments and media services alongside messaging, could improve revenue, but that success was far from assured.
Middle East test bed
The Gulf is seen as one of the most promising regions for monetisation, as consumers there have demonstrated their willingness to spend on messaging apps.
Deloitte’s 2025 Digital Consumer Trends survey found that 73 per cent of consumers in the UAE and Saudi Arabia made a purchase through social media in the past year, compared with 52 per cent in the UK.
“The trend confirms the rising power of social commerce, customised marketing patterns, and direct reach out to consumers,” says Emmanuel Durou, partner and technology, media and telecoms leader at Deloitte Middle East.
Mr Bikard says regional dynamics give these platforms a stronger foothold than in western markets.
“The Middle East’s high rate of business adoption and cultural preference for messaging-based interaction create particularly strong revenue potential compared with regions where messaging remains largely personal and social.”
Analysts note that paid services in the region remain in early stages, but rising FinTech use and digital literacy are expected to create more willingness to pay for in-app transactions over the next few years.
Watch: The National's Dana Alomar and Alvin Cabral test Ray-Ban Meta smart glasses
Challenges of privacy
As messaging companies shift to monetisation, the key method has been using more user data – including metadata – which critics say erodes privacy protections.
Meta’s monetisation strategy, for example, has often relied on analysing metadata such as user networks, device information and usage patterns to support its broader advertising business.
This approach has drawn heightened scrutiny amid the company’s history of data controversies.
In 2018, the Cambridge Analytica revelations, first reported by The Guardian, showed that data from tens of millions of Facebook users had been harvested without consent and used for political advertising, sparking global debate over digital privacy and accountability.
The fallout continues to shape how users view Meta’s data practices today.
Privacy advocates argue this undermines the spirit of end-to-end encryption, which protects message content but not surrounding data.
A 2022 study in the International Journal of Computer Trends and Technology found that metadata can expose patterns such as who users talk to, how often and at what times, raising “security and privacy considerations” even when messages remain encrypted.
Civil society groups, including the Electronic Frontier Foundation, have also warned that metadata can still be used for profiling.
But Mr Durou suggests payments integration has a “high growth potential” due to increasing FinTech adoption in the Middle East.
Long-term bets
Despite short-term hurdles, experts argue that encrypted messaging platforms should be viewed as long-term bets rather than immediate profit engines.
“Much of the value of these platforms lies not in their current profits but in their promise, as they position themselves as future bottlenecks, or toll booths, in the digital economy,” Mr Bikard says.
He described them as “beachhead businesses: early models that generate income while enabling firms to learn, build trust, and position themselves at the centre of an emerging ecosystem”.
Meta, for instance, has continued to invest heavily in WhatsApp’s payments and commerce tools despite limited short-term returns, while Telegram has poured resources into blockchain-based services.
Analysts say these moves reflect the view that control over messaging ecosystems could unlock much larger revenue streams in the future.
The challenge remains whether WhatsApp, Signal and Telegram can translate that promise into sustainable revenue, without undermining the privacy guarantees that made them indispensable in the first place.
