Apple and Tencent Reach WeChat Payments Agreement

Apple reportedly reached a payments agreement with Chinese tech giant Tencent.

The new arrangement will see Apple handle payments and take a 15% cut of purchases of mini games and apps from Tencent’s WeChat social media platform, Bloomberg reported Thursday (Nov. 13), citing unnamed sources.

The two sides had been negotiating the issue for more than a year, according to the report. The arrangement gives Apple a new revenue stream and relieves pressure on Tencent. Apple had pushed the company to eliminate a loophole that let app creators send users to outside payment systems to get around the standard 30% iPhone commission.

Developers who wish to qualify will need to agree to Apple software requirements, like one to help parents share their child’s age range, the report said.

Neither Apple nor Tencent replied to PYMNTS’ request for comment.

While the 15% agreement means Apple is halving its standard fee charged to developers for in-app purchases, the report said this is a sign of the company’s progress within the Chinese entertainment sector. More than 1 billion people use WeChat, and the mini games drove $4.5 billion in revenue for Tencent in its latest quarter.

The company said last year it was in discussions with Apple about a revenue-sharing agreement related to the games.

The apparent agreement came weeks after Apple was sued in China over its policies around app distribution and payments.

The complaint came from a group of 55 Chinese iPhone and iPad users who alleged that Apple abuses its dominant market position by requiring that iOS apps be distributed and payments be made on its platform and by charging commissions of as much as 30%.

The attorney who filed the suit, Wang Qiongfei, leveled a similar case against Apple in 2021. That action was dismissed last year and is now under appeal before China’s Supreme People’s Court.

Apple’s app store policies have been the target of antitrust cases around the world, with the payments it receives representing a major source of revenue.

“In another example of how big this business is, Apple said that App Store developer billings were $1.1 trillion in 2022, and said that more than 90% of that accrued to the developers ‘without any commission paid to Apple,’” PYMNTS reported in May.

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