Apple Officially Allows Users to Tip Content Creators With In-App Purchases

[MacRumors]

Apple updated its App Store Review Guidelines this week to indicate that developers may now sell virtual currencies in the form of in-app purchases to enable customers to "tip" content creators within apps.

Like all other in-app purchases, Apple will now receive a 30 percent cut from the virtual currencies used for tipping.

Tipping within apps is popular in China, where live-streaming apps like Yinke and Yizhibo have long allowed viewers to tip or give virtual gifts to the stars they watch as a token of gratitude, according to TechCrunch.

Last month, however, Apple reportedly told WeChat and several other Chinese social networking apps to disable their "tip" functions to comply with App Store rules, as many of the virtual currencies sidestepped Apple's 30 percent cut on purchases.

Now that Apple has formally outlined its stance on the matter, developers who previously feared repercussions from the company may be more inclined to begin offering virtual currencies for users to tip content creators with.

Beyond Apple's 30 percent cut, it's up to developers to determine how much of the tips are relayed to the content creators themselves.

Article Link: Apple Officially Allows Users to Tip Content Creators With In-App Purchases

 

[2010mini]

30% cut of a tip Apple???? Really?!??

 

[Xgm541]

30% cut of a tip Apple???? Really?!??

Yeah.. I don't like that either. Perhaps apple is trying to avoid developers using tips with 0% cut as a way to circumvent other IAP fees, but I imagine that can be fixed by a good SDK (i.e. a tip cannot unlock a feature otherwise not available).

 

[konqerror]

30% cut of a tip Apple???? Really?!??

A single card transaction costs 20-30 cents. Plus percentage fees. Plus assuming cost of fraud and support. A single chargeback eats up $10 plus the loss. Plus maintaining a PCI-compliant infrastructure. For a $1-2 tip, Apple's margins are going to be cents.

 

[macduke]

The problem with this is that, in China, these content creators will urge their users to buy Android where they get more money from their tips. What percentage decrease this will cause is unclear.

 

[lostczech]

A single credit card transaction costs 20-30 cents. Plus percentage fees. Plus assuming cost of fraud and support. A single chargeback eats up $10 plus the loss. Plus maintaining a PCI-compliant infrastructure. For a $1-2 tip, Apple's margins are going to be cents.

Where on earth did you get those numbers?! A single credit card transaction is NOWHERE NEAR 20-30 cents (otherwise, you are getting really ripped off by your payment gateway). Chargeback? In Apple's ecosystem that probably happens less than 0.1% of the time. Maintaining a PCI-compliant infrastructure, sure, but Apple has been doing that for quite some time, so that should be just a small line item in their overall expenditures. 30% is still ludicrous

Correction, I'm used to spreading transaction fees across a monthly limit, small time users could see 20-30 cents, but trust me, Apple is not in this category

 

[konqerror]

Where on earth did you get those numbers?! A single credit card transaction is NOWHERE NEAR 20-30 cents (otherwise, you are getting really ripped off by your payment gateway). Chargeback? In Apple's ecosystem that probably happens less than 0.1% of the time. Maintaining a PCI-compliant infrastructure, sure, but Apple has been doing that for quite some time, so that should be just a small line item in their overall expenditures. 30% is still ludicrous

https://usa.visa.com/content/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf
CPS/e-Commerce Basic, Debit Regulated Visa Check Card
0.05% + $0.21*
CPS/Card Not Present Visa Signature
1.95% + $0.10

Visa takes 21 cents on a debit transaction, which is the majority of US card usage. On top of that add your acquirer fees. Plus network charges.

You must be in a different country.

0.1% chargeback with $10 loss is 1 cent per transaction. Another cent gone.

 

[MICHAELSD]

I suppose the problem with "free" tipping is that developers could use it to circumvent IAP so that they could encourage tipping to support their free apps rather than being compensated through more traditional methods.

 

[sterlingindigo]

How can I send a tip to that girl?

 

[btrach144]

Whoever uses their headphones like that shouldn't be allowed to own technology.

 

[WiseAJ]

How can I send a tip to that girl?

what kind of tip?

 

[xero9]

what kind of tip?

Just the tip

 

[twinlight]

What is that cluster**** of an app? My brain hurts.

Apple taking 30%. Wow.. thats gonna sitt well with asia.

 

[samden]

I suppose the problem with "free" tipping is that developers could use it to circumvent IAP so that they could encourage tipping to support their free apps rather than being compensated through more traditional methods.

While this is a possibility, many developers depend on tips to supplement ad income which isn't quite high enough. Some API policies do not allow IAPs and so developers for apps using those API would depend upon tips for their income. If this affects all tipping and not just tip currencies for platforms such as Twitch, then this hurts developers a lot more than Apple is hurt by devs circumventing IAPs.

 

[Breaking Good]

In the United States, PayPal's transaction fee is 2.9% + $0.30 which is charged to the seller. So from a seller's perspective 30% doesn't seem that far off.

I've see iTunes gift cards for 15% occasionally. I have to believe that the discount comes out of Apple's cut.

I'm not saying that Apple isn't earning a nice margin off of its app store. But I don't believe it is as obscene as people believe.

 

[firewood]

Visa takes 21 cents on a debit transaction, which is the majority of US card usage. On top of that add your acquirer fees. Plus network charges.

That's for small fry doing low volume transactions. Try offering Visa a few Billion $$$ in transactions, and they will negotiate a far better deal.

 

[69Mustang]

So let me get this right...
If I'm in the, let's say, Youtube app watching a video of Nonstop Scott freestyling, and I like it enough to tip Scott (not Youtube, but Scott) a dollar, Apple is supposed to get 30 cents of that? Why? That was the same argument a lot of posters (including me) misunderstood about the WeChat kerfuffle.

 

[Jeremy1026]

Umm, are we ignoring how she has rigged up her headphones?

 

[fold]

Umm, are we ignoring how she has rigged up her headphones?

No, you're just not reading where someone posted that an hour ago.

 

[Glassed Silver]

A single card transaction costs 20-30 cents. Plus percentage fees. Plus assuming cost of fraud and support. A single chargeback eats up $10 plus the loss. Plus maintaining a PCI-compliant infrastructure. For a $1-2 tip, Apple's margins are going to be cents.

I'd just tell them to use Safari.

I hope this policy crashes and burns.

Glassed Silver:ios

 

[AppleFan91]

I see both sides.

Should apple get 30% on something that is for good service or a good experience from the entertainer?

Keep in mind, this way developers can't circumvent the IAP 30% by hiding behind the "tips" excuse. Also, while these guys are getting tips, they are reaching a HUGE platform of customers thanks to Apple, that wouldn't be possible without Apple, so I lean toward more of it being acceptable. That being said, on this site, this is another reason why Apple is terrible.

 

[samden]

So let me get this right...
If I'm in the, let's say, Youtube app watching a video of Nonstop Scott freestyling, and I like it enough to tip Scott (not Youtube, but Scott) a dollar, Apple is supposed to get 30 cents of that? Why? That was the same argument a lot of posters (including me) misunderstood about the WeChat kerfuffle.

It sounds like if you buy a tip currency (Cheer for Twitch), say $10 worth of said currency, then Apple get's $3. But the act of a user tipping a content creator will not be affected so your $1 to Scott will not have a fee attached. However, this will probably mean platforms will either invoke a fee on content creators or increase existing fees to offset the Apple tax.

As for why, Apple knows there is money flowing through their platform and they want as much of a cut as they can possibly get.

Umm, are we ignoring how she has rigged up her headphones?

No, someone has already mentioned it.

 

[Kaibelf]

That's for small fry doing low volume transactions. Try offering Visa a few Billion $$$ in transactions, and they will negotiate a far better deal.

Because people are giving billions of dollars just in tips to these phone app personalities? In what universe?

 

[69Mustang]

I suppose the problem with "free" tipping is that developers could use it to circumvent IAP so that they could encourage tipping to support their free apps rather than being compensated through more traditional methods.

What you're describing is not tipping. If I give a dev $1 and I receive 100 gold coins or diamond armor, that's not a tip. That's quid pro quo, a transaction, an attempted circumvention. A tip would be me liking this quote so much that I gave macduke a dollar for making it.

The problem with this is that, in China, these content creators will urge their users to buy Android where they get more money from their tips. What percentage decrease this will cause is unclear.

@macduke - Thanks for letting me use your quote as an example.

In that instance, MR is the app developer who has the relationship with Apple and they receive nothing. Macduke is the content creator, who has no relationship with Apple, and he receives the tip. That's what WeChat did, and that's why I have difficulty seeing where Apple warrants a 30% cut of Macduke's tip.

 

[patrickbarnes]

A single card transaction costs 20-30 cents. Plus percentage fees. Plus assuming cost of fraud and support. A single chargeback eats up $10 plus the loss. Plus maintaining a PCI-compliant infrastructure. For a $1-2 tip, Apple's margins are going to be cents.

Apple is not processing current tips for any platform.

They're doing nothing for a 30% cut. CC processing at Apple volumes is ~2%.

Apple should provide this at the same fee as Stripe/PayPal/Square/Braintree. 2.5-3%.