WhatsApp API vs SMS/RCS – Which is better for business in 2024?
In today’s digital age, businesses are constantly looking for effective ways to communicate with their customers. Two popular options are the WhatsApp API and SMS/RCS (Rich Communication Services). Each has its strengths, but there are significant differences that can influence which one is the best choice for your business. In this blog post, we’ll explore the key differences, highlight the advantages of each, and discuss where WhatsApp is the dominant form of communication. We’ll also provide statistics to support our findings.
What is WhatsApp API?
WhatsApp API is a tool provided by WhatsApp that allows businesses to send messages to their customers directly without using WhatsApp or Whatsapp Business Apps. This API is designed for medium to large businesses that need to communicate with a large number of customers, integrate with other systems like e-commerce, CRM, POS etc. It supports sending text messages, images, videos, and even documents, making it a versatile tool for customer engagement.
What are SMS Gateway and RCS?
SMS Gateways act as intermediaries, connecting businesses’ systems with mobile network operators, enabling bulk messaging.
RCS (Rich Communication Services) is an advanced messaging protocol that enhances traditional SMS with features similar to instant messaging apps. RCS supports rich media, read receipts, typing indicators, and more. It aims to provide a more interactive and engaging messaging experience than SMS while still leveraging mobile carrier networks. As of 2023, RCS has been adopted by about 60 carriers worldwide, reaching approximately 390 million monthly active users.
How WhatsApp API are better than SMS Gateway for the businesses
WhatsApp API provides more modern and interactive tools for businesses to create rich interaction and seamless integration with other 3rd party systems. And it has several advantages over using traditional SMS gateways.
Rich Media Messaging
WhatsApp API supports rich media messages, enabling businesses to send images, videos, documents, and audio messages. This makes communications more engaging and interactive compared to SMS, which is limited to 160 characters of plain text. Although a lot of these limitations of SMS are addressed by the introduction of RCS, but the adoption rate and consistency across devices and OS still remains a major issue.
Whatsapp is still a far superior platform for sending rich media messages. Like think of a situation where an online retailer can share product manuals or video tutorials directly through WhatsApp.
Higher Engagement Rates
WhatsApp messages tend to have higher open and engagement rates compared to SMS and RCS. Overall, the difference in open rate is negligible, but if you remove Apple & iPhone dominated countries like the US and tightly regulated countries China, WhatsApp has a much better engagement ratio compared to SMS. However, in terms of open rate both SMS and WhatsApp perform excellent with over 90%. Also, it is worth mentioning that multiple surveys show that in terms of engagement and click rate Whatsapp performs much better compared to SMS, according to a study the conversion rate for WhatsApp is whopping 45-60% compared to traditional SMS which has around 5% conversation rate.
Cost-Effective
WhatsApp uses internet data for sending messages, which can significantly reduce costs for businesses, particularly those with a global customer base. Though it is worth noting that pricing model for SMS and WhatsApp is different as SMS providers usually charges per message, and WhatsApp charges per conversation (which includes all the message per session. The charges for both WhatsApp API and SMS also vary depending on various factors type of message, country SMS/RCS. However, in almost in all cases WhatApp is far more cost effective compared to SMS.
For example, if we talk about Twilioan outbound SMS in UK would cost around $0.04 per message sent as well as $0.007 for each message received whereas WhatsApp message would cost $0.03 per conversation.
Interactive Features
WhatsApp API offers interactive features such as quick replies, buttons, and list messages, buttons, links and a recently introduced feature like flows. While RCS also offers interactive features, its adoption is not as widespread, and it may not be supported by all carriers and devices. SMS lacks these interactive capabilities entirely. Whatsapp is more superior for a continued conversation, and also makes automated conversation much more interactive.
Security and Privacy
WhatsApp messages are end-to-end encrypted, ensuring that only the sender and recipient can read the messages. This level of security is crucial for businesses dealing with sensitive information. SMS messages are not encrypted, making them more vulnerable to interception. RCS offers improved security features over SMS but does not universally support end-to-end encryption.
Encryption is very crucial for many businesses like financial institutions sending secure transaction alters, sending OTPs, subscription keys, etc.
Consistency Across Devices and Operating Systems
WhatsApp offers a consistent user experience across various devices and operating systems. Whether a customer is using an Android phone, an iPhone, or even on a pc/computer with WhatsApp web or WhatsApp windows app, the functionality and interface remain consistent. This consistency is not always guaranteed with RCS due to varying levels of support across different carriers and devices.
WhatsApp API provides more modern and interactive tools for businesses to create rich interaction and seamless integration with other 3rd party systems. And it has several advantages over using traditional SMS gateways.
Rich Media Messaging
WhatsApp API supports rich media messages, enabling businesses to send images, videos, documents, and audio messages. This makes communications more engaging and interactive compared to SMS, which is limited to 160 characters of plain text. Although a lot of these limitations of SMS are addressed by the introduction of RCS, but the adoption rate and consistency across devices and OS still remains a major issue.
Whatsapp is still a far superior platform for sending rich media messages. Like think of a situation where an online retailer can share product manuals or video tutorials directly through WhatsApp.
Higher Engagement Rates
WhatsApp messages tend to have higher open and engagement rates compared to SMS and RCS. Overall, the difference in open rate is negligible, but if you remove Apple & iPhone dominated countries like the US and tightly regulated countries China, WhatsApp has a much better engagement ratio compared to SMS. However, in terms of open rate both SMS and WhatsApp perform excellent with over 90%. Also, it is worth mentioning that multiple surveys show that in terms of engagement and click rate Whatsapp performs much better compared to SMS, according to a study the conversion rate for WhatsApp is whopping 45-60% compared to traditional SMS which has around 5% conversation rate.
Areas and Countries Where WhatsApp is Dominant
WhatsApp is particularly popular in several regions around the world. In these areas, businesses can significantly benefit from using the WhatsApp API for communication.
WhatsApp is the most popular messaging app around the world with over 65% of the population using it. It is almost used as the primary form of communication in most South Asian, Latin American, European, African and Middle Eastern countries with 75 to 98% mobile users using WhatsApp. On the other hand it is gaining a lot of popularity in the US and Canada with over 45% of mobile users using WhatsApp.
Use Cases for WhatsApp API
Meta has very well bifurcated the major use cases of the whatsapp with their pricing strategy, including utilities (we can call it as customer support), transactional and of course for marketing.
Customer Support (Utilities)
WhatsApp API is an excellent tool for providing customer support. Customers can reach out to businesses directly through WhatsApp, and support teams can respond in real-time. This leads to faster resolution of issues and higher customer satisfaction.
WhatsApp API provides a lot of power like say a tech company can provide automated troubleshooting flow, guiding through step-by-step and if they still need help the customer service agent can seamlessly join the conversation.
Marketing Campaigns
Businesses can use WhatsApp API to run targeted marketing campaigns. With higher open rates a 98% to 99% and engagement, marketing messages sent through WhatsApp are more likely to be seen and acted upon by customers. Along with that WhatsApp API platform provides excellent tools for Marketing like super flexible templates, interactive buttons, and more.
You can create a broadcast list to send dynamic templates to specific customer groups, or you can integrate it with your e-commerce site or CRM to create automated retargeting campaigns.
Transactional Messages
WhatsApp API can be used to send transactional messages such as order confirmations, shipping notifications, and appointment reminders. Whatsapp API considers the transactional message different from marketing messages, and it is considerably cheaper than marketing messages
Feedback and Surveys
Businesses can use WhatsApp to collect feedback and conduct surveys, especially after the introduction of whatsapp flows and possibilities of integrating it with external systems. Using WhatsApp APIs the businesses can reach to more customers with higher possibility of getting the response.
Challenges and Considerations
Implementation Complexity
The complexity of integration for both WhatsApp API and SMS services depends on specific use cases, but generally SMS integration is slightly easier as there are large number of 3rd party services providers providing easy integration and/or readymade plugins for popular platforms like WordPress, Magento, BigCommerce, etc. For WhatsApp API initial setup can be slightly challenging, but if you plan to integrate advanced features, the APIs offers a lot more features and options to implement.
Compliance and Policies
WhatsApp has very strict policies regarding the use of its API. Every conversation incited by the business needs to be a template approved by Meta. They only provide a 24 hour window to businesses to reply to a message. If any business fails to comply with their policies they may also get banned from the platform.
SMS and RCS also have some regulations, especially regarding unsolicited messages and data privacy, a lot of them depend on service providers, carrier networks or governing countries, but in most cases these regulations are more lenient compared to WhatsApp.
Is whatsapp api a really better option then using sms/rcs?
The answers boil down to whom you want to reach. Though both WhatsApp and SMS/RCS has far better engagement rates than other means like emails or ads, WhatsApp API offers more features for the developer, and consistently across the device and OS.
On the other hand, with SMS there is no dependence on internet access, or requirement for any dedicated apps. So, all in all, if your customers and target-audience are using WhatsApp then WhatsApp API is definitely better and cheaper option then SMS/RCS, but if not then you will have to use the SMS.
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