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New App Store Policies Target Chinese In-App Tipping Economy

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Apple is aiming to firmly regulate China’s tipping economy with the introduction of two new App Store policies. According to a new report from Quartz, if an iOS app allows tipping, it will have to do so as an in-app purchase, meaning that Apple gets 30 percent of all “tips” processed this way.

Apple tightly controls what iOS apps can and can’t do, but for a while, its policy towards tipping on iOS apps remained unclear. One of the new rules, listed in Apple’s App Store Review Guidelines updated this week, removes any doubt. Tipping is now considered an “in-app purchase,” and must go through Apple’s internal App Store payment system:

If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may use in-app purchase currencies to enable customers to “tip” digital content providers in the app. Apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP.

This kind of tipping has emerged as a popular way to sidestep platforms that take a cut of revenue, which usually comes in the form of ads. It’s particularly popular on many of China’s live-streaming apps and WeChat, which have embraced the feature with built in tools for stars to pull in extra donations or charge for specific types of performances.

Last month, Apple turned its attention toward in-app tips, as the feature sidestepped the 30 percent tax the company receives from in-app purchases. Developers argued that the tips were donations and not purchases, placing the feature in a gray area.

Meanwhile, Apple threatened to remove popular messaging app WeChat and other social platforms from the App Store if developers did not pay the fees or remove tips from their apps.

The move infuriated some app developers and risked inciting a standoff in one of Apple’s biggest app markets.

It may sound like a minor policy point, but tipping has become a huge moneymaker in the country. Around a tenth of WeChat’s 889 million users say they have used it, and of that group, a little less than half say they contribute five to ten yuan ($.72-$1.45 USD) per month.

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  • Dehop

    30% on tips or money transactions *between users* (i.e. not from user to the app developer) is absolute BS, it’s a way to force users to use Apple iMessage’s new P2P payment system. Apple has an almost guaranteed hit in China if they name the upcoming phone the iPhone 8, but the MBA and beancounter idiots in charge of Apple have put at risk potentially several billion dollars in revenue and years of goodwill for the next few years, in order to make a few million in extorting from tips over the same period (and maybe less, if Chinese users abandon iOS).

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