Apple demands cut of Chinese app 'tips'

Posted June 16, 2017

Appealing to app developers and content creators, Apple will now let people "tip" them in virtual currency.

Apple has released a new revenue stream that could unleash a new community of digital content creators, which is already thriving in China. For video streaming platforms, developers may decide to take a 20 percent cut to pass on 50 percent of the tips to content creators, which will open up a new and legal path for monetizing videos.

It is important to note that Apple cracked down on unofficial tipping, which was a way around the 30 percent fee on in-app purchases by highlighting how the tips were donations rather than actual purchases.

Developers will only be allowed to ping users for ratings three times a year, and once the app has been reviewed, it can't show the message again for another year, even after major updates.

Previously, there was no formal rule from Apple about how tipping was classified.

The app review prompts will no more annoy the users as Apple have come up with a solution.

This means developers can add tipping features without fearing repercussions from Apple, as long as they're willing to give the giant 30%. If app makers don't comply, they'll be removed from the App Store.

Notably, the App Store saw downloads increase by more than 70% over the past year, according to Philip Schiller, Apple's SVP of worldwide marketing. Now, Apple has instituted a legitimate way to tip. In fact, both Facebook Live and Periscope do not offer tipping.

If you've used iOS apps before, there's a good chance that you have been prompted to rate and the review the app.