WeChat tips = Apple’s In-App Purchase?

Real stories behind two sides of the equation

What happened?

Here is a scenario: Imagine you are paying a bill in a restaurant for food and drink you’ve consumed and you would want to tip the waiting staff for their excellent service. A council official walks in and asks the restaurant to pay 30% of all revenue as the fee for being allowed to do business, but also wants to take 30% of all tips given. The restaurant’s manager is horrified and starts to explain that he never touches any of the waiting staff’s tips and is incensed that the official is asking the waiting staff to hand over 30% of everything they earn from tips. The council official responds ‘those are the rules, and the council gets 30% any earnings from any business activities taking place in this district.’ The waiter has no choice because the restaurant has no choice. He must either hand over 30% of his tips or leave.

Let’s see who is who in this scenario when you look at it from the perspective of the WeChat platform:

The council official = Apple

The district = Apple App store

The restaurant = WeChat

The waiter = WeChat’s official account content creator

On April 19, 2017, Apple asked WeChat to disable its tipping function, by means of which WeChat users can tip WeChat official account content creators and emoji designers AFTER they have read the content creator’s articles or after using the designer’s emojis. Tipping is a way of indicating that users think the content creators and emoji designers have done a good job or of showing that they agree with the content creator’s opinion. It’s also a way to encourage content creators to write more good articles in future. Overnight, WeChat updated its iOS version and revised the tip function so that instead of direct tipping, users can scan a QR code and transfer funds to content creators and emoji designers directly. Apple’s response? Very shortly after that Apple replied that the scan and transfer functionality still constitute a violation of its App store’s guidelines. In the early morning of April 20th, WeChat announced that it would completely disable the tipping function on iOS versions of its app.

A month later, Apple contacted WeChat and many other social app providers instructing them to either disable all tipping functions or change them to IAP (In-App Purchases). The implications of this is that if any app providers would like to enable tipping functions, they have to do so via the IAP channel and Apply Pay, from which Apple will charge a 30% transaction fee. Any app providers that refuse to comply run the risk of having their apps taken down from Apple’s App store.

Is this really an argument about whether tipping should be treated the same as an IAP?

So what are Apple’s terms? Is this ‘industry standard’ for all App stores?

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