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What's weird is that Apple has a lovely, convenient system for in-app payments called Apple Pay that has a great pricing model that everyone is happy with (usua

by abalone 10y ago

What's weird is that Apple has a lovely, convenient system for in-app payments called Apple Pay that has a great pricing model that everyone is happy with (usually 2-3%). They just don't allow it to be used for subscriptions. Why? What is their goal here? Let's survey the possibilities... 1. To make a ton of money by extracting revenue from developers and content providers. This is the "obvious" goal everything immediately thinks of, but I think it's actually unlikely. Apple makes MUCH more money from device sales. It makes more financial sense to have a robust offering of content and apps. They are making good margins on their own services, but their business model in terms of the app/music stores is to run them just above break even. 2. Convenient payment. Not the reason, because Apple Pay would do that at a lower price. 3. Customer service. Since Apple is technically the merchant here reselling a digital good, they can also provide refunds and customer service. But I doubt they need a 15-30% margin for this. They could just contractually require that developers refund in-app Apple Pay transactions under certain conditions. 4. Privacy. Now here's a real reason. To offer a 2-3% fee, payment processors need to control for fraud. One way they do this is by verifying contact info. Now, for physical goods there is no way around asking for the billing address, so Apple Pay supports that. But it's not necessary for digital goods. Apple would not be able to offer Apple Pay for subscriptions without degrading user privacy.

MBCook 10y ago
Apples and oranges. Apple Pay has no fee to the user or the company receiving the money, it's paid by the bank and is EXTREMELY small. Normal credit card fees still apply, but those don't go to Apple. For all intents and purposes it is a single bank transaction almost like any other. Apple has almost no part in it except helping verify security. In-app purchases are different. Apple takes a cut because Apple provides a real service. They host the app, they do the billing, they do the collections, they do the license tracking. They handle taxes in all sorts of countries in different states. They make sure their store complies with all local laws. They handle security and try to stop piracy. In short, they're providing a lot of services.
- abalone 10y ago
  > Apple takes a cut because Apple provides a real service. They host the app, they do the billing... Those benefits are irrelevant to subscription content. Apple does not host Spotify's content. Spotify does not need Apple to handle monthly billing. If Apple merely wanted to offer a convenient worldwide billing service, they could make it opt-in for smaller developers, and Spotify would happily handle their own billing, tax calculations, etc. No, the goal here must be something more.
- hrbrtglm 10y ago
  > They handle taxes in all sorts of countries in different states. And they handle it so poorly that you have to write them to get a proper invoice in order to recover your VAT. If your customer buy your application through the app store, they ask "you" an invoice with VAT, and you have to tell them to contact Apple, that's so unprofessional. For a 30% cut, they could clearly put a download link or include a PDF in the sent email.

by abalone 10y ago

MBCook 10y ago

Apples and oranges. Apple Pay has no fee to the user or the company receiving the money, it's paid by the bank and is EXTREMELY small. Normal credit card fees still apply, but those don't go to Apple. For all intents and purposes it is a single bank transaction almost like any other. Apple has almost no part in it except helping verify security. In-app purchases are different. Apple takes a cut because Apple provides a real service. They host the app, they do the billing, they do the collections, they do the license tracking. They handle taxes in all sorts of countries in different states. They make sure their store complies with all local laws. They handle security and try to stop piracy. In short, they're providing a lot of services.

abalone 10y ago
> Apple takes a cut because Apple provides a real service. They host the app, they do the billing... Those benefits are irrelevant to subscription content. Apple does not host Spotify's content. Spotify does not need Apple to handle monthly billing. If Apple merely wanted to offer a convenient worldwide billing service, they could make it opt-in for smaller developers, and Spotify would happily handle their own billing, tax calculations, etc. No, the goal here must be something more.
hrbrtglm 10y ago
> They handle taxes in all sorts of countries in different states. And they handle it so poorly that you have to write them to get a proper invoice in order to recover your VAT. If your customer buy your application through the app store, they ask "you" an invoice with VAT, and you have to tell them to contact Apple, that's so unprofessional. For a 30% cut, they could clearly put a download link or include a PDF in the sent email.