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Visa charges you 3% but doesn’t have an online store that I can find your app on, and don’t run security checks against your app to check for malicious apps, et

by MR4D 5y ago

Visa charges you 3% but doesn’t have an online store that I can find your app on, and don’t run security checks against your app to check for malicious apps, etc. So I think we can agree that a realistic number for Apple is definitely above 3% for the service they provide. We can argue about 30%, and that’s a good discussion, but 3% is no way comparable.

thekyle 5y ago
I think most credit card processors charge something like 30 cents + 2.9%. On large purchases that's about 3%, but on smaller transactions (like those usually used in mobile apps) that 30 cents dominates and could end up being about 30%. So from that perspective Apple's 30% cut could be a good deal in some cases.
- GeneralTspoon 5y ago
  It's not a "good deal" in any case.... The minimum purchase price on iOS is $0.99, so at worst you'd be paying basically the same rate (~30%). But most payment processors offer separate pricing for micro-transactions (e.g. Paypal is 5% + $0.05 IIRC). Which works out at around 10% for a $0.99 transaction. And actually - Adyen offer much better pricing than the "Stripe rate" of $0.30 + 2.9% in the first place.
  - anonymouse008 5y ago
    A few years ago when making a micro transaction app, PayPal only allowed one type of fee structure — either the 5% or the 2.9%. Meaning you couldn’t segregate low tickets from high tickets and get the most optimal fee - your whole merchant account was one fee or the other. ‘Twas quite a PITA
    - GeneralTspoon 5y ago
      Yeah this is still the case AFAIK - very annoying. I believe their recommended workaround was to have 2 separate merchant accounts with different fee structures and group your products accordingly.
- deleted 5y ago
  [deleted]
deergomoo 5y ago
The 12% that Epic and now Microsoft charge seems about right IMO
- Someone 5y ago
  Based on what arguments? If Apple’s cut were 12% and Epic and Microsoft now charged 6%, would you claim “The 12% that Apple charges seems about right IMO”?
  - reader_mode 5y ago
    Yep, if someone is able to maintain above market level profits for so long it's usually a sign of monopolistic pricing. That's not necessarily bad, but in Apples case it's just double dipping on their monopolistic position and is clearly a drain on the market with no benefit. They have the same incentives to invest in R&D and support the ecosystem on the insane HW margins alone, I'd be willing to bet their dev budget doesn't change at all if this change in rate was made.
    - Someone 5y ago
      But how do you know 12% is about right, and not 10%, 2%, … Also, Apple will claim they have a better product that warrants higher margins. Data from independent parties shows that they attract more users willing to pay for apps, and developers aren’t leaving en masse for Android.
      - reader_mode 5y ago
        >Also, Apple will claim they have a better product that warrants higher margins. And this argument is fine in the hardware market because they have competition, it's efficiency monopoly - that's why I said it's not always bad. However their app store controlls access to 50% of US market (even more by revenue) simply because it comes as the only option and the consumers can't unbundle it. If they had competition on the platform (different stores/distribution methods) - you wouldn't have to say what % is right, the market would decide the value added by their app store/payment methods.
vishnugupta 5y ago
For some even 3% could be too high let alone 30%. For instance, Kindle iOS app doesn’t let you purchase books. It’s a read-only version, so to speak.
- dehrmann 5y ago
  Most credit card processors charge around 3%, so it's rarely an issue. The number I usually throw out that Apple could charge and no one would be mad over is 5%. It's more than a credit card processor, but not that much, and it would likely help conversion rates enough that app developers would be happy.
robertlagrant 5y ago
They also don't curate a language and IDE for you to make your stuff with as well, nor offer logins or ways to find past transactions.
- pessimizer 5y ago
  > curate a language and IDE for you to make your stuff with as well That's an odd way to put it. Approximately 0.001% of developers would complain if instead they were allowed to use the language and IDE they prefer.
  - robertlagrant 5y ago
    They can use their IDE, at least. And given every phone platform I know of has restricted language support, I can't imagine it's a simple problem to solve.
lossolo 5y ago
Apple had 72.3 billion revenue from App Store in 2020. I can assure you that I can provide you with online store that I can find your app on, and run security checks against your app to check for malicious apps, etc. for 2.1 billion $ per year (3%).
- anonymouse008 5y ago
  Ah yes, and I’ll have that feature done in 2 weeks, max! How hard could it be?
  - pessimizer 5y ago
    The excuse is hardship? Are you saying that Apple's app store profit margin is low, or comparing $2.1 billion to 2 weeks?
  - lossolo 5y ago
    I never said it would be done in two weeks but I think you underestimate what can be achieved with 2.1 billion dollars per year. For 200-250$ mil you will have ~1000 software engineers/project managers/other staff and you are left with 1.9 billion, costs for infrastructure + bandwidth not more than 400 mil, you are left with 1.5 billion.

by MR4D 5y ago

thekyle 5y ago

I think most credit card processors charge something like 30 cents + 2.9%. On large purchases that's about 3%, but on smaller transactions (like those usually used in mobile apps) that 30 cents dominates and could end up being about 30%. So from that perspective Apple's 30% cut could be a good deal in some cases.

GeneralTspoon 5y ago
It's not a "good deal" in any case.... The minimum purchase price on iOS is $0.99, so at worst you'd be paying basically the same rate (~30%). But most payment processors offer separate pricing for micro-transactions (e.g. Paypal is 5% + $0.05 IIRC). Which works out at around 10% for a $0.99 transaction. And actually - Adyen offer much better pricing than the "Stripe rate" of $0.30 + 2.9% in the first place.
- anonymouse008 5y ago
  A few years ago when making a micro transaction app, PayPal only allowed one type of fee structure — either the 5% or the 2.9%. Meaning you couldn’t segregate low tickets from high tickets and get the most optimal fee - your whole merchant account was one fee or the other. ‘Twas quite a PITA
  - GeneralTspoon 5y ago
    Yeah this is still the case AFAIK - very annoying. I believe their recommended workaround was to have 2 separate merchant accounts with different fee structures and group your products accordingly.
deleted 5y ago
[deleted]

deergomoo 5y ago

The 12% that Epic and now Microsoft charge seems about right IMO

Someone 5y ago
Based on what arguments? If Apple’s cut were 12% and Epic and Microsoft now charged 6%, would you claim “The 12% that Apple charges seems about right IMO”?
- reader_mode 5y ago
  Yep, if someone is able to maintain above market level profits for so long it's usually a sign of monopolistic pricing. That's not necessarily bad, but in Apples case it's just double dipping on their monopolistic position and is clearly a drain on the market with no benefit. They have the same incentives to invest in R&D and support the ecosystem on the insane HW margins alone, I'd be willing to bet their dev budget doesn't change at all if this change in rate was made.
  - Someone 5y ago
    But how do you know 12% is about right, and not 10%, 2%, … Also, Apple will claim they have a better product that warrants higher margins. Data from independent parties shows that they attract more users willing to pay for apps, and developers aren’t leaving en masse for Android.
    - reader_mode 5y ago
      >Also, Apple will claim they have a better product that warrants higher margins. And this argument is fine in the hardware market because they have competition, it's efficiency monopoly - that's why I said it's not always bad. However their app store controlls access to 50% of US market (even more by revenue) simply because it comes as the only option and the consumers can't unbundle it. If they had competition on the platform (different stores/distribution methods) - you wouldn't have to say what % is right, the market would decide the value added by their app store/payment methods.

vishnugupta 5y ago

For some even 3% could be too high let alone 30%. For instance, Kindle iOS app doesn’t let you purchase books. It’s a read-only version, so to speak.

dehrmann 5y ago
Most credit card processors charge around 3%, so it's rarely an issue. The number I usually throw out that Apple could charge and no one would be mad over is 5%. It's more than a credit card processor, but not that much, and it would likely help conversion rates enough that app developers would be happy.

robertlagrant 5y ago

They also don't curate a language and IDE for you to make your stuff with as well, nor offer logins or ways to find past transactions.

pessimizer 5y ago
> curate a language and IDE for you to make your stuff with as well That's an odd way to put it. Approximately 0.001% of developers would complain if instead they were allowed to use the language and IDE they prefer.
- robertlagrant 5y ago
  They can use their IDE, at least. And given every phone platform I know of has restricted language support, I can't imagine it's a simple problem to solve.

lossolo 5y ago

Apple had 72.3 billion revenue from App Store in 2020. I can assure you that I can provide you with online store that I can find your app on, and run security checks against your app to check for malicious apps, etc. for 2.1 billion $ per year (3%).

anonymouse008 5y ago
Ah yes, and I’ll have that feature done in 2 weeks, max! How hard could it be?
- pessimizer 5y ago
  The excuse is hardship? Are you saying that Apple's app store profit margin is low, or comparing $2.1 billion to 2 weeks?
- lossolo 5y ago
  I never said it would be done in two weeks but I think you underestimate what can be achieved with 2.1 billion dollars per year. For 200-250$ mil you will have ~1000 software engineers/project managers/other staff and you are left with 1.9 billion, costs for infrastructure + bandwidth not more than 400 mil, you are left with 1.5 billion.