Apple relents, bows, agrees to WeChat terms on 'Tips' in China

The one-year-old controversy over WeChat's built-in tipping system has finally ended with Apple relenting on its demand for 30% cut in revenues but the exact figure at which they agreed to renew the contract is still not known.

Tips are a popular way for Chinese social network users to pay content creators. China's WeChat disabled its built-in tipping system last year after Apple demanded the popular messaging app makers in China to pay 30 percent in revenue or disable the function as per the App Store rules.

Around 963 million people worldwide use WeChat, an instant messaging platform similar to WhatsApp but with extra services, including a payment gateway. The turn-around is seen as Apple's move to try to increase revenue from in-app purchases.

Announcing the deal, WeChat creator Allen Zhang told the Wall Street Journal: "In the past, companies like Apple might have had a difficult time understanding China-specific features. We now share a mutual understanding."

However, neither Apple nor Tencent have given out any hint if Apple will still take a small cut to allow payments through WeChat for its App Store and Apple Music.

Tencent, the owner of WeChat, once exceeded Facebook in valuation and the industry people believe that WeChat has better monetization strategy than Facebook. Released in August 2013, WeChat is not merely confined to China but expanded throughout Asia in 25 countries, including Taiwan, Japan and South Korea.

Grace Yin, Director of WeChat Pay, once told Technode: "We are going to target Chinese tourists in those countries, so introducing WeChat payment there is not so different from doing it in China."

Facebook's decision to return to WeChat fold in China is expected since isolating from WeChat would amount to alienating nearer to one billion Chinese users of the "super app of China, by China and for China".

WeChat is currently providing messaging, mobile payment, e-commerce and, of course, gaming. WeChat has covered almost every aspect of the online-offline activity from collecting parking tolls to staff-less self-service supermarkets to selling collectibles on its WeStore.

Last year, it launched 'mini-program' function, which can perform app-like tasks without the apps, thus saving memory space for smartphones. It has 580,000 programs and 170 million daily users.

"Mini-program is a brand new product model which can seamlessly link the offline and the online together," said its the program director Hu Hu Renjie said. "Any industry who can understand the value of the mini-program will benefit from it a lot, especially for the offline industries like retailing." No wonder, Apple has seen a point there.