Apple App Store payment rules should adjust developers’ ideas and try to avoid Apple commissions

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1. The ruling result of Epic Games v. Apple opened a door for application developers to avoid Apple’s commission.
2. Payment platforms compete to develop new payment software for applications, so that application customers can pay through other channels.
3. However, it is not clear how Apple will adjust the rules of the app store, and developers have made many preparations.
Tencent technology news on October 8, since the U.S. federal judge ruled that apple must allow application developers to provide customers with other payment channels, developers are competing to develop new payment software for applications, thus bypassing Apple’s 30% payment system.
In September, a federal judge ruled that apple must allow application developers to provide customers with other payment systems. The ruling is the result of a legal lawsuit between apple and fortress night developer Epic Games.
If developers and users widely adopt new software, it may threaten Apple’s profit engine. You know, Apple’s app store is part of Apple’s service business, and Apple’s service business has sales of $53.8 billion in fiscal year 2020, with a gross profit margin of 66%, accounting for about 20% of Apple’s revenue.
It is reported that the ruling will take effect on December 7 this year. As it is not clear what new rules Apple will introduce according to the ruling, developers have made many preparations. Apple has not disclosed the details of how to adjust the plan according to the judge’s ruling.
Christian Owens, CEO of paddle, a payment platform, said the ruling is expected to allow the company to expand its customer payment business supporting Mac and windows platforms to the app store on Apple’s iPhone. Paddle has developed three different implementation schemes for purchasing products and services for iPhone platform applications, one of which is expected to be applicable to Apple’s new regulations.
Owens said: “we are happy to listen to Apple’s opinions on what is allowed and what is not allowed.
A software development kit (SDK) provided by paddle allows application developers to provide users with monthly or annual subscription services through the “upgrade now” button. This button can jump to a page hosted by paddle in Safari browser, which has several payment options such as apple pay and paypal. After payment, users will return to the application.
Paddle provides a software development kit that allows users who buy services to jump from the application to the safari browser web page
Revenuecat is a company that builds customer subscription management tools for IOS developers. Jacob eiting, CEO of the company, said that revenuecat is also developing a browser based payment system that developers can add to the application without developing it themselves.
“The real magic is that developers will get a short link, which can inform customers through advertising and marketing, or integrate into existing applications through the SDK we provide,” AITiN said in an email
“Our model assumes that developers still need to use Apple’s own payment system in their applications, but now they can also directly link to external payment channels,” AITiN said
This is what other companies think will happen.
“I think if you want to provide a non platform in app purchase method, you must also provide Apple’s in app purchase method,” Owens said
Apple’s App Store guidelines stipulate what developers can and cannot do in iPhone apps. Apple has not updated its app store guidelines since the announcement of the ruling last month. All iPhone app releases and updates go through a process called app review, in which Apple employees will reject those that do not comply with Apple’s regulations Custom applications.
The judge ruled that apple must allow consumers to leave its original system and buy virtual goods in other ways. But this does not prevent apple from adjusting its app store rules, such as developing a new method to charge fees for iPhone app transactions that occur outside the platform. Tim Cook, Apple CEO This possibility was raised in the trial.
Cook said in May this year: “if there is no in app purchase function, we must come up with another system to keep accounts. I think it will bring chaos.
Apple declined to comment on the current practice of developers. However, during the trial, it argued that the established rules of the app store ensured users’ privacy and security. Kate Adams, Apple’s general counsel, said in September that the ruling in the Epic Games case was a “huge victory”. The company welcomed the court’s ruling that apple did not monopolize the market.
Some Wall Street analysts believe that the ruling has a limited impact on apple, which may reduce Apple’s revenue by up to 4%, but it will bring a real reduction in revenue, because among the expensive software subscription fees, users pay more frequently through non platform.
AITiN said that the change in Apple’s app store policy may not have a significant financial impact on developers. He believes that even if the app can link to external web pages, if users have to visit external web pages, they will be less likely to complete their purchase. Moreover, this approach will allow users to manage subscription behavior alone, rather than within iPhone settings Can annoy users.
“I think it’s good for the system to have more competition, but I don’t think it will bring unexpected wealth to anyone,” AITiN said.
Of course, other payment systems will charge lower commission fees than apple, and can also provide developers with functions such as managing subscription behavior and analyzing sales trends.
Owens said that paddle will take 5% to 10% of its sales, lower than Apple’s 15% to 30% commission. Developers can give back the saved money to consumers.

If Apple requires applications with direct payment links to provide in app payment function at the same time, developers will have the incentive to reduce the service prices of different payment channels. For example, if a user subscribes to a music service in the app, it may be charged $9.99 per month because Apple will draw a corresponding Commission; However, if users subscribe directly through the service website link, it costs only $6.99 a month.
Owens said, “we want to develop a competitive in app payment solution. No matter how small the transaction volume is, we only charge a 10% commission, and then reduce the service price.” (compiled by Tencent technology / Jiao Han)