A Company In China Shows How WhatsApp Could Make A Boatload Of Money

Last year, messaging app WhatsApp generated just $20 million in revenue.

So why did Facebook just buy it for $19 billion?

One reason of many: Facebook is very aware of the success Chinese company Tencent has had developing its own messaging app, WeChat (微信 in Chinese).

Barclays analysts say WeChat will generate $1.1 billion of revenue this year.

WeChat, with 270 million active users, isn't as big as WhatsApp, which has 450 million users. But WeChat is a far more developed commercial service.

For example, check out this vending machine I saw in China. At first, it looked like any vending machine:

But then I looked at how the machine takes money. Instead of feeding it cash, the snack buyer opens WeChat on their phone and points their smartphone camera at a QR code. The app then reads the QR code, and charges the WeChat user for the snack. Then the snack comes out. 

WeChat payments are accepted in locations all over China.