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Messaging App Line’s Virtual Currency For Sticker Gifting Falls Foul Of Apple’s App Store Rules

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Messaging app Line, which recently announced it has passed 150 million users, has withdrawn a function from its iOS app that allowed users to gift paid-for stickers to each other by paying for them with a virtual currency. The change, spotted earlier by The Next Web, was explained by the company in a blog post today, in which it wrote: “As of 15:00 today, May 10, 2013, we regret to announce that we will be withdrawing the function to send purchased stickers as gifts to friends on the iPhone version of LINE.”

Line did not go into detail as to why it is withdrawing the paid-for gifting function, saying only that Apple asked it to remove this feature. It is also removing purchases of the virtual currency used for sticker gifting. The change only affects Line’s iOS app. Users can still buy stickers for their own use, or gift free stickers.

Line said:

We received a request directly from Apple who operates the AppStore, that this sticker gifting function will have to be withdrawn from the app, and we do apologize for the disappointment this may cause to all of you who are having fun sending stickers as gifts to your friends.

The problem with Line’s process here appears to be that it was bypassing Apple’s in-app payment rules — i.e. circumventing the sanctioned in-app payment process via use of a virtual currency. That’s a pretty clear no-no, although some other apps, such as Skype or Spotify, get round this issue by allowing users to buy services outside the app and then make use of their credits within the app.

It’s unclear whether Line allowed users to buy virtual currency via its web platform and then redeem those credits in-app, which may be one workaround. Another would be for Line to let users gift stickers by making direct in-app payments — which would not cut Apple out of the transaction.

We’ve reached out to Line with questions and will update this story with any response. Line noted on its blog that free sticker gifting can continue within the iOS app, and Line users are also able to buy stickers for their own use (via an in-app purchase) — so it’s clearly the virtual currency that’s the culprit here. Line added that iPhone users will still be able to receive stickers gifted to them by Android users. Any iOS app users with remaining Line coins will be able to gift stickers to use them up.

Line, which is now operated by Line Corporation, after a corporate name change last month, reported its first set of financial results earlier this week, announcing some $58.9 million in revenues for its Q1 — around 30% of which, or some $17.67 million, came from sticker purchases. The majority of Line’s revenues (around 50%) come from game in-app purchases.

Line does not break out its sticker revenues further so it’s unclear how large an impact the iOS change will have. However if paid-for sticker gifting is a significant revenue stream the company could deploy an alternative payment mechanism to keep offering the feature on iOS.

Update: A Line spokesperson told TechCrunch the company has no plans to reinstate sticker gifting using in-app purchasing as the payment mechanism, which suggests the feature wasn’t hugely important to it from a revenue-generating point of view.