None of the above. They are actually cheaper than most alternatives. I believe their "trick" is to maintain accounts in each country such that a cross country remittance doesn't actual involve money movement which saves on fees.
SMS is very popular in the US for historical reasons. Many users in other countries (like India) moved to products like Whatsapp because their cell phone plans charged per message but US phone plans have had free SMS pricing for years so we've never had a push here. iPhone is market leader in the US so iMessageis also heavily used since its default for SMS between iOS users.