Apple is finally cashing in on one of the largest untapped markets in its App Store ecosystem. For years, WeChat's "mini" apps and games in China bypassed the App Store entirely, leaving Apple out of the billions flowing through Tencent's platform.
That changes with a new deal between Apple and Tencent, which will allow Apple to process payments for WeChat apps and games and take a 15% cut of every purchase.
WeChat's Dominance in China
WeChat isn't just a messaging app. In fact, it's now a full ecosystem. With mini apps, games, e-commerce features, and more, the platform has become indispensable for 1.41 billion monthly active users in China. This level of engagement has historically been a challenge for Apple, as many in-app purchases happened outside the App Store, bypassing its usual 30% revenue share, per Bloomberg.
Apple Takes 15% Cut on WeChat's Transactions
It's a major compromise on Apple's usual 30% cut to 15% on WeChat's transactions. Although it's below the normal, this is obviously going to yield hundreds of millions of dollars every year, joining a market in which it hitherto earned nothing.
The deal was said to have been negotiated for over a year amid the regulatory, corporate, and user interest balance in China.
Why This Is a Win for Apple
By integrating WeChat's mini apps and games into its payment system, Apple unlocks a massive source of revenue while keeping control over the process. Even at a reduced 15% fee, the impressive scale of WeChat's user base translates to a significant boost in Apple services revenue, per GSM Arena.
For perspective, the volume of in-app purchases processed by WeChat is huge, which makes this deal potentially more lucrative than many other App Store deals put together.
Benefits for Tencent and Users
This also works in Tencent's favor, as the deal legitimizes the in-app transaction model within the Apple ecosystem, which may improve user trust and make payment processes easier. Users will enjoy seamless payments while playing games or using mini apps without needing to go to other platforms for transactions.
Last year, the Cupertino giant reportedly pressured WeChat to close the payment loophole for in-app purchases. Now, Apple got the last laugh, and all WeChat could do was comply.
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