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

[NamE_O]

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.

Honestly though, that's rather good news for me. Apple as a company would think China is a huge market and therefore very important to them. But for me as an Apple user who doesn't hold AAPL stocks, I think Apple is focusing too much on China. Over the past few years, every major keynote like WWDC and the fall iPhone keynote involved something Chinese like English to Chinese translations, WeChat, some Chinese version of Uber, and more, like anyone besides Chinese cares. If this new tip policy affects Chinese iPhone users negatively and make people in that country move from iOS to Android, maybe Apple will realize the US market is more important and pay more attention to us.

 

[78Bandit]

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.

@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.

But in that case MR would have to write code into their app to facilitate the payment from yourself to Macduke in exchange for some kind of enjoyment, utility, or even copyright use you got from his post. Apple has consistently said they expect their 30% Apple tax for any payment related to digital content done through an app. That is why if subscriptions to services like Pandora that are initiated through the app get charged a fee, and that is also why Amazon can't even link to an ebook purchase on the web let alone have a "buy in now" button since they refuse to give apple their fee. The fact MR doesn't receive payment in your example is not really relevant since they could just as easily take a cut of the transaction after it hits they payment processor with no difference in the app coding.

My personal opinion is Apple shouldn't charge a fee for transactions that don't go through the customer's Apple account. If a developer goes to the trouble to separately enlist a third-party payment provider to handle the monetary part of the transaction then they should be free from Apple's vig. As of now, though, Apple sees it differently and as long as you are in their closed ecosystem you have to play by their rules.

 

[rizzo41999]

So Apple bowed to the Chinese's request

 

[69Mustang]

But in that case MR would have to write code into their app to facilitate the payment from yourself to Macduke in exchange for some kind of enjoyment, utility, or even copyright use you got from his post. Apple has consistently said they expect their 30% Apple tax for any payment related to digital content done through an app. That is why if subscriptions to services like Pandora that are initiated through the app get charged a fee, and that is also why Amazon can't even link to an ebook purchase on the web let alone have a "buy in now" button since they refuse to give apple their fee. The fact MR doesn't receive payment in your example is not really relevant since they could just as easily take a cut of the transaction after it hits they payment processor with no difference in the app coding.

My personal opinion is Apple shouldn't charge a fee for transactions that don't go through the customer's Apple account. If a developer goes to the trouble to separately enlist a third-party payment provider to handle the monetary part of the transaction then they should be free from Apple's vig. As of now, though, Apple sees it differently and as long as you are in their closed ecosystem you have to play by their rules.

MR writing code to facilitate payment is exactly what WeChat did. Immaterial. The supposition of MR taking a cut off the back end of the transaction is woulda shoulda coulda that introduces immaterial considerations that detract from the point of the post.

The point of my post is to illustrate my disagreement with what transpired in the simplest and most direct way by highlighting the tipping function has nothing to do with Apple or the dev receiving money. But as you say, Apple's store, Apple's rules. It just smacks of petty greed that I don't normally associate with Apple. Bad taste.

 

[Cosmosent]

This will become the catalyst for "Bikini 4K TV" ! ... and, tens of millions of women will sign up to try to get their piece of the pie !

 

[usarioclave]

Where on earth did you get those numbers?!

Well actually, they do. You can look at any CC processing fee schedule and those are correct.

 

[Naraxus]

Leave it to Apple to nickle and dime their customers with that "30%" bs. It costs Apple nothing so I can't wait to hear their "hosting" excuse.

 

[Rogifan]

Why is this surprising? When doesn't Apple take 30% of IAP (and that's how they're treating this)?

 

[jasonlasky]

Apple Pay should be developed as a decentralised crypto currency ledger and exchange built in to a secure enclave on devices. Apple credit would then have low friction micro payments and reward proof of stake as well as work (computation). Then Apple can quickly reduce transaction fees across their ecosystem and create a secure global currency and exchange. Device owners will store credit on Apple Pay for convenient exchange among users, apps, businesses etc. I'd recommend a loyalty rewards program with every Apple purchase. For goodness sake I'd like to see an easy way to donate to causes and charity, with every app and in app purchase. Apple could extend its employee donation matching scheme to all Apple Pay users and developers. Tips will then just be tips and not a business with costs to exploit.

 

[69Mustang]

Honestly though, that's rather good news for me. Apple as a company would think China is a huge market and therefore very important to them. But for me as an Apple user who doesn't hold AAPL stocks, I think Apple is focusing too much on China. Over the past few years, every major keynote like WWDC and the fall iPhone keynote involved something Chinese like English to Chinese translations, WeChat, some Chinese version of Uber, and more, like anyone besides Chinese cares. If this new tip policy affects Chinese iPhone users negatively and make people move from iOS to Android, maybe Apple will realize the US market is more important and pay more attention to us.

This post sounds like remarks from a jilted lover.

 

[sudo1996]

A single card transaction costs 20-30 cents.

Wait, this is off by like a factor of 10.
[doublepost=1497061151][/doublepost]

Honestly though, that's rather good news for me. Apple as a company would think China is a huge market and therefore very important to them. But for me as an Apple user who doesn't hold AAPL stocks, I think Apple is focusing too much on China. Over the past few years, every major keynote like WWDC and the fall iPhone keynote involved something Chinese like English to Chinese translations, WeChat, some Chinese version of Uber, and more, like anyone besides Chinese cares. If this new tip policy affects Chinese iPhone users negatively and make people in that country move from iOS to Android, maybe Apple will realize the US market is more important and pay more attention to us.

That's all good until other things start caring about Android more because it has more users.

 

[M2M]

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.

So if I buy a flight ticket in the United App is Apple asking for a 30% cut, too ? Or if i transfer money in my banking app ?

Apple is getting greedy. Without being innovative. Why don't they create iMessage on Andriod ? Then they can sell their stickers there! Why don't they implement a money transfer service platform independent? Then they can get their share from that.
[doublepost=1497061898][/doublepost]

Why is this surprising? When doesn't Apple take 30% of IAP (and that's how they're treating this)?

Every money related transaction within an app is IAP...

 

[Cloudkicker]

Just the tip

*backwards rimshot*

 

[haruhiko]

So Apple is officially in the stripper business now.

 

[UL2RA]

So Apple is officially in the stripper business now.

Yes, iStrip. It's Apple's next big thing.

 

[konqerror]

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.

What is Apple going to do? Make people mail checks in? They can't use pin debit. They have no alternative so why should Visa and the banks they represent cut them a deal? On the other hand, things like utilities and transit do have an alternative hence the favorable rates in the PDF I linked.

 

[kstotlani]

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.

So Apple has to put all new infrastructure and software for this or reuse what exists? Aren't all these calculations already done when other billing systems were created?

 

[apolloa]

Ahh so this is why, it's basically ripped of the idea that the Chinese had, banned China from doing it, and monetised the idea for the Western World and China I presume whilst ensuring they take their usual massive cut as a result.. I'm sure the Chinese will be happy with this....

 

[LovingTeddy]

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.

Android is more popular in China than iOS anyway. This move will only push developer and consumer towers Android more.

 

[tennisproha]

Perfect for cam shows.

 

[Solomani]

edited

 

[firewood]

Apple's margins are going to be cents.

We know that's not true because their cut of iTunes revenue (from a lot of 0.99 purchases) has been publically reported. And that revenue number has been way too big (since 2004) for it to represent just a very slim margin.

 

[konqerror]

We know that's not true because their cut of iTunes revenue (from a lot of 0.99 purchases) has been publically reported. And that revenue number has been way too big (since 2004) for it to represent just a very slim margin.

Nope. You made the assumption that the cost of goods sold was equal to their passthrough in IAP. Example: assume Apple buys songs wholesale at $.50 each and sells it at $.99. Now Apple charges you $.99 and passes along to the app author $.70. See how that works? You can't equate the two unless you show that Apple pays at least $.70 a song.

Plus people on iTunes buy albums, movies, books, etc. all much greater than $.99 a shot, which by the way is now $1.29 for the big sellers... a sign that people weren't making money at $.99.

 

[smirking]

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.

Apple gets some preferential rates, but the point that Apple's cut really isn't a full 30% after merchant fees is valid. Most people also aren't going to be making $1 transactions so the actual % that goes to the transaction cost will be driven lower by that fact. A lot of tipping is done by using virtual currencies that most people would purchase $5, $10, $20 at a time.

[doublepost=1497159350][/doublepost]

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

Asia. It's a big thing in a lot of Asian countries. There are people whose full time occupation is being an online personality and their fans want them to sing songs online. I'm not making this up.
[doublepost=1497159715][/doublepost]

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

The developer side of me cringes at a two tiered payment system where tips are a special class of income. I'm sure you could write an SDK that could address some abuses as you said, but I'm sure people will also come up with ever more inventive ways of shifting their revenue from official payments into tips.

That said, I also feel it to be a bit stiff to be taking a 30% cut off of tips, but I see the danger in making tips a special type of transaction.

 

[Praesto]

The girl in the screenshots is beautiful. How about we credit her with name