WhatsApp: The Operating System of African SMEs, and Why It May Be Holding Them Back

WhatsApp now has more than 3 billion monthly active users, as confirmed by Meta in its Q1 2025 earnings report. 

With that scale, we definitely can’t limit the app’s description to a tool just for messaging. For many MSMEs across Africa, WhatsApp is their business platform, the hub for sales, customer service, operations, and payments.

Across large parts of the continent, small businesses don’t run on standalone websites or dedicated point-of-sale systems. They conduct nearly all of their commerce via chat. 

The very ubiquity that makes WhatsApp powerful also creates a subtle but persistent drag on growth. 

This article focuses on how African SMEs use WhatsApp, explores the advantages it brings, examines the limitations it imposes, and argues why we must build infrastructure on top of it, before these enterprises outgrow their conversational foundation.

WhatsApp Business vs Telegram Channels: Competing for SME Communication

Two facts make WhatsApp essential to Africa’s MSME economy. First, WhatsApp’s global reach is enormous, over 3 billion people use it every month, according to Meta’s 2025 report.

Second, mobile technology is a cornerstone of Africa’s economy. According to the GSMA, in 2024, mobile technologies and services accounted for 7.7% of Africa’s GDP, driven by growing smartphone adoption and expanding mobile internet access. 

When mobile is the primary economic gateway, top messaging apps naturally become the infrastructure for business.

Together, these trends mean that WhatsApp sits at the intersection of accessibility and scale, a near-universal app accessed via the phone, the tool of choice for entrepreneurs with limited capital and moderate technical capacity.

How SMEs Use WhatsApp: Business Workflows in Chat

For many African SMEs, WhatsApp is their default workspace. Here’s how:

• Sales and discovery: Merchants use WhatsApp catalogues, broadcast lists and group chats as their storefronts. Buyers browse images and voice notes, ask questions, and place orders, all within the same chat.
• Customer service: Returns, complaints, confirmations, everything happens via chat. Because responses are usually fast and personal, buyers trust the exchange more than a faceless email or website form.
• Payments and invoicing: Sellers coordinate payments via mobile money, bank transfers or USSD. Customers share payment confirmations in chat. Some businesses then issue invoices as photos or PDFs inside WhatsApp itself.
• Operations and logistics: Orders are coordinated through group chats with delivery drivers or warehouse staff. Drivers get drop-off locations, customer photos, and verbal instructions, all in real time.
• Team coordination: Small teams manage tasks, schedules and recruitment through voice notes and chat groups, minimising friction in low-infrastructure environments.

These workflows mean that for many micro-entrepreneurs, moving off WhatsApp would slow them down and weaken the personal, trusted communication that underpins their sales.

The Upside: Why WhatsApp Triggers Growth

The benefits that come with this arrangement are real and substantial:

• Reduced entry cost: It is free to create a catalogue and share it. No need for a website or expensive digital tools.
• Trust-building: Real-time chat, voice messages and pictures create direct, human engagement. Buyers feel more secure.
• High engagement: Chat messages beat traditional outreach: responses are faster, and conversion rates are higher.
• Financial inclusion: Entrepreneurs who lack formal infrastructure can still transact, document orders and build a client base.
• Scalability: For many African SMEs, WhatsApp provides a way to scale activity without investing heavily in physical or digital infrastructure up front.

The Digital Ceiling: Limits to Scale

Despite the strengths, WhatsApp’s consumer-app roots embed limitations that become more obvious as businesses try to grow.

1. Account and device friction
   A WhatsApp account is typically tied to a single phone number and device, making collaboration difficult. Shared inboxes are awkward, unless businesses adopt the Business API, which comes with onboarding costs.
2. Absence of native data analytics
   Conversations in chat are unstructured. There is no built-in way to run analytics on customer behaviour, funnel performance or churn, unless external tools are used.
3. Limited integration with business systems
   There is no native link between WhatsApp and inventory management, accounting or fulfilment systems. Many firms must reconcile chat-based orders manually.
4. Payment reconciliation challenges
   Payments come through diverse channels, mobile money, bank transfers, USSD. Sellers rely on customers to share confirmation screenshots in chat, then manually reconcile records.
5. Platform risk
   Companies using WhatsApp face real vulnerability from outages or policy changes. The six-hour Facebook/WhatsApp outage in October 2021, and more recent API policy changes, show how a private platform can become a systemic risk.
6. Regulatory and formalisation gaps
   Transactions in chat are opaque to regulators, tax authorities and lenders. Without structured receipts or formal records, many businesses remain informal and credit-invisible.

These challenges add friction, cost and risk, particularly for businesses that want to scale beyond a single phone or a small customer base.

The Layer-2 Ecosystem: Building on What Exists

Recognising these limits, a growing ecosystem is building on top of WhatsApp. Providers include:

• Business Solution Providers (BSPs) that connect WhatsApp Business API to CRMs and customer-service dashboards.
• Chat-commerce platforms that standardise order intake and use templates to turn chat into structured data.
• Reconciliation tools that match payment confirmations to orders, reducing manual labour.
• Voice-to-text or voice-to-structure tools that convert voice notes into itemised orders.

These companies leverage WhatsApp’s reach while adding the structure, analytics and automation SMEs need to scale. But access is uneven: expenses, regional availability and ease-of-use vary, and many small merchants are still excluded.

Macro Risks and Policy Implications

The WhatsApp-first model of commerce presents bigger economic issues:

• Systemic concentration: When trade sits on a single privately-owned messaging platform, any disruption (technical or policy) carries significant economic risk.
• Tax and credit invisibility: Governments lose visibility into business transactions, making effective taxation and credit provision difficult.
• Lack of open data standards: Without a standard for business metadata inside chat (orders, receipts, invoices), each provider builds its own silo.
• Consumer protection: Disputes in private chat are hard to adjudicate. Regulators need clearer safeguards for transactions that begin and end in WhatsApp.
• Digital sovereignty: African economies must balance the benefits of low-cost communication infrastructure with the risk of over-dependence on a platform owned by a global company.

To address these risks, policymakers should incentivise interoperable messaging standards, support layer-2 tools for reconciliation and analytics, and promote subsidised digital infrastructure for SMEs.

A Founders’ and Investors’ Playbook

For entrepreneurs:

• Use structured order-forms or templates within chat.
• Invest in a Business API integration early if you anticipate growth.
• Automate payment reconciliation: match client screenshots with invoices or orders.
• Maintain fallback channels (SMS, email, USSD) to mitigate against outages.
• Record structured data from day one, it supports credit, compliance and scale.

For investors:

• Invest in SaaS firms building shared inboxes, CRMs or reconciliation tools for chat-based businesses.
• Prioritise companies that enable multi-user chat accounts or group-based order management.
• Look for voice-commerce technology: voice-to-text or structured templates that work in low-literacy markets.
• Support developers working on open messaging standards or APIs for business metadata.

WhatsApp has gone beyond being just messaging for African SMEs; it’s the bedrock of commerce for millions. It gives speed, trust, low cost, and inclusion. 

But it was not built for enterprise scale. Many businesses will hit a ceiling if they rely exclusively on conversational workflows.

We now face a choice. Do we treat WhatsApp as the final platform, or as the base layer for a richer infrastructure? 

To turn conversations into scalable economic value, we need to invest in structured data tools, open standards, and lightweight business platforms that build on and elevate what WhatsApp offers. Only then can we fully activate the possibilities of this de facto operating system.