ConnexionApple Reaches Deal to Take Billions of Dollars in China's WeChat
Apple has reached a new agreement with Tencent that will allow the company to process payments and collect a 15% commission on purchases made inside WeChat mini games and mini apps on the iPhone, establishing a major new revenue stream in China after over a year of negotiations, according to Bloomberg.
Under the arrangement, Apple will begin handling in-app payment processing for qualifying mini apps and mini games distributed inside WeChat, China's dominant all-purpose mobile platform. Developers participating in the system will need to adopt specific Apple software requirements, including a feature that allows parents to share a child's age range.
Unlike users in the rest of the world, most Chinese iPhone users do not access services by downloading separate apps from the App Store. Instead, they use WeChat as a single interface for services, utilities, and entertainment. These functions are powered by a vast network of mini apps contained entirely within WeChat.
Purchases made through these mini apps have historically not generated App Store commission because many developers direct users to external payment systems. As a result, Apple's new agreement gives the company a foothold in a major segment of Chinese mobile payments from which it previously received no revenue.
While the new 15% commission is half of Apple's standard 30% rate for many App Store transactions, Bloomberg estimates that the size of the WeChat ecosystem makes the agreement potentially worth billions of dollars to Apple. The agreement is expected to be disclosed publicly by the companies at a later date.
This article, "Apple Reaches Deal to Take Billions of Dollars in China's WeChat" first appeared on MacRumors.com
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Under the arrangement, Apple will begin handling in-app payment processing for qualifying mini apps and mini games distributed inside WeChat, China's dominant all-purpose mobile platform. Developers participating in the system will need to adopt specific Apple software requirements, including a feature that allows parents to share a child's age range.
Unlike users in the rest of the world, most Chinese iPhone users do not access services by downloading separate apps from the App Store. Instead, they use WeChat as a single interface for services, utilities, and entertainment. These functions are powered by a vast network of mini apps contained entirely within WeChat.
Purchases made through these mini apps have historically not generated App Store commission because many developers direct users to external payment systems. As a result, Apple's new agreement gives the company a foothold in a major segment of Chinese mobile payments from which it previously received no revenue.
While the new 15% commission is half of Apple's standard 30% rate for many App Store transactions, Bloomberg estimates that the size of the WeChat ecosystem makes the agreement potentially worth billions of dollars to Apple. The agreement is expected to be disclosed publicly by the companies at a later date.
This article, "Apple Reaches Deal to Take Billions of Dollars in China's WeChat" first appeared on MacRumors.com
Discuss this article in our forums
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