I have never used WeChat Pay or the tipping function, since they're both only available in China, but I really don't like that this article essentially says that this issue is "iPhone vs WeChat" for Chinese citizens, because it really isn't. Tips are used by about 10% of WeChat users, and a large percentage only tip a few RMB per month. This is absolutely not on the scale of the actual WeChat Pay, even if this article implies it; it does mention that WeChat processed $1.2 trillion in transactions last year, but that's not tips, and I think it's disingenuous to not directly mention that.
The removal of tips happened a few months ago, and it has definitely affected people who rely on those tips in mainland. For example, in a Quartz article about this topic[1] it mentioned that one blogger went from making 1000 RMB to 100 RMB per day from tips after this policy was put into place, because even though iPhone users make up a small percentage of total phones, they generally have a lot more disposable income (having an iPhone is a status symbol).
It's really not as cut and dry as this article makes it seem because of that. Wealthy Chinese like iPhones because of the status and don't want to give it up if they don't have to, and Tencent probably makes a cut from being the middleman of the tipping feature, so Tencent is also probably annoyed at the loss of a revenue stream as well. However, Tencent will never remove WeChat from the App Store, and neither will Apple, for various (and obvious) reasons. There are likely negotiations going on, and there may be a pseudo Apple Pay system to handle tipping like this in China.
Also, nitpick: I don't think it's fair to say that Apple Pay is an "answer" to WeChat Pay. They may do the same thing (facilitate payments to merchants) but they do it in very different ways, and I would imagine a big reason it's not bigger in China is due to the pervasiveness of WeChat Pay (which works with QR codes, not card readers).
Tencent is the 10th largest company in the world, making it larger than (eg) Samsung, and they already have their own OS as well (Tencent OS), which is an Android fork. I expect it's a matter of time before they either arm-twist Apple into compliance, or Apple becomes irrelevant in the Chinese market when better integrated and shinier alternatives leave it in the dust.
Up until now, no known Chinese companies has ever achieved any phenomenal success in developing an operating system for the mass market from scratch. Most of them have a small team to hack and maintain forks of existing open source OSes. Alibaba tried to sell their Android replacement[1] but perhaps it has not reached any tipping point yet.
There are some stellar smartphones designed and made in China. I'm certain similar things were said about their smartphone ambitions. It's only a matter of time before smart, dedicated and focused people achieve what they are after.
That's quite interesting to hear. In my anecdotal experience, it seems Alipay is more integrated than WeChat in terms of online payments as it appears to have far more sophisticated features and support across a wide variety of merchants and institutions, even if WeChat is itself unassailable as a whole and is of course primarily a communication app rather than a payment one.
For instance, after a year of wandering around, meeting merchants who did not support AliPay was a very rare occurrence but I frequently found several who did not use WeChat pay, although this is likely to change given the lightning speed at which these things seems to work in China. Even beggars on the streets have given me AliPay codes to scan.
This makes me wonder what the terms of the alliance between Apple and Alipay are. I don't use their appstore but would Apple be in trouble without it?
> Even beggars on the streets have given me AliPay codes to scan.
While I personally use either that applies, my observation is that WeChat Pay QR code is more frequently supported by grass-roots merchants like food vans etc. These WeChatPay QR codes are not for formal accounts that are supposed to receive purchase payment but personal accounts, rendering the payment a little shady, though AliPay also supports such transactions. I doubt some of these merchants do now own any AliPay accounts before they start WeChat Pay but they do have WeChat installed as it has been the dominant mobile social platform. An interesting rumor is that WeChat Pay is less ubiquitous in Hangzhou where the headquarter of Alibaba is located, and vice versa for AliPay in Shenzhen.
Because the form factor hasn't changed since the iPhone 6?
Do note however, that Apple’s customer retention rate, while significantly lower in China than in the rest of the world, is still higher that any other phone manufacturer’s in China.
The removal of tips happened a few months ago, and it has definitely affected people who rely on those tips in mainland. For example, in a Quartz article about this topic[1] it mentioned that one blogger went from making 1000 RMB to 100 RMB per day from tips after this policy was put into place, because even though iPhone users make up a small percentage of total phones, they generally have a lot more disposable income (having an iPhone is a status symbol).
It's really not as cut and dry as this article makes it seem because of that. Wealthy Chinese like iPhones because of the status and don't want to give it up if they don't have to, and Tencent probably makes a cut from being the middleman of the tipping feature, so Tencent is also probably annoyed at the loss of a revenue stream as well. However, Tencent will never remove WeChat from the App Store, and neither will Apple, for various (and obvious) reasons. There are likely negotiations going on, and there may be a pseudo Apple Pay system to handle tipping like this in China.
Also, nitpick: I don't think it's fair to say that Apple Pay is an "answer" to WeChat Pay. They may do the same thing (facilitate payments to merchants) but they do it in very different ways, and I would imagine a big reason it's not bigger in China is due to the pervasiveness of WeChat Pay (which works with QR codes, not card readers).
1: https://qz.com/973359/apple-aapl-may-be-gearing-up-for-a-gia...