Looks like they’re funding the service through custom domain xmpp hosting:
We have decided to make conversations.im accounts free of charge. We think this will help the adoption of XMPP in general and Conversations in particular. Our domain hosting will continue to act as a source of revenue for our service.
We hope you continue to enjoy conversations.im.
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Especially after paying for the app in the google store, a surprise ongoing fee would bother people.
Is there a way to buy an app for someone who will only install off google play? For the price of a cappuccino to get a friend onto a decent app I’d rather just gift a copy to them than try to convince them to buy it, if that’s the barrier.