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Think Apple has already seen the writing on the wall - both S. Korea & the US are now probably going to push back against the IAP restrictions, and they can / s

Think Apple has already seen the writing on the wall - both S. Korea & the US are now probably going to push back against the IAP restrictions, and they can / should do a couple of things, which might actually increase revenue. 1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year. The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. All Apple has to do is to make the rates competitive enough, that after considering building their own purchases system, factoring in sales tax and VAT, most developers will happily just opt for Apple's system if the rates make sense. Many people are putting up with 30% already — bringing the rates down to something reasonable with an upgrade path to put them on par with payment processors like Stripe (with VAT and Billing and Radar) or Paddle will just increase revenues for them. The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.

mertd 5y ago
Why do you think people would implement their own IAP? It would most likely be a few competing platforms like Shopify for web purchases.
- WA 5y ago
  Exactly. Stripe and PayPal could be integrated easily.
  - ethbr0 5y ago
    But Stripe and PayPal and Square have far lower fees... oh. Now I see what this was about.
    - dpkonofa 5y ago
      I don't think you do. Stripe and PayPal are only payment processors. If Apple now has to allow other payment processors then they're either going to charge fees for hosting the files or they're going to charge fees for the other services that people are using (OTA updates, reviews, localization, etc.). All that stuff will still have to be in place so it'll just be an issue of whether or not these companies will have to stand up their own versions of this (or if they even can) and whether or not it'll be as seamless for the end user.
      - ethbr0 5y ago
        Yes. And good. The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market. The central evil of all of this has been the bundling of everything together, so that nothing can be independently valued. "30% is fair, in exchange for all the things we provide you", etc. Edit: As an example, in the US this is mandated for home mortgages. "These are services you can shop for" + "These are charges for each service". Any platform having to offer the equivalent of a Closing Disclosure / HUD-1 doesn't seem like such a bad world.
        Spivak 5y ago
        I mean you also assume that it will be line-item'd instead of "give us 30% of your revenue made through iOS" in the ToS to publish an app which has any paid features or content.
        ethbr0 5y ago
        At least then, we'd be honest that it's extortion.
        ChrisLomont 5y ago
        >The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market. Historically line itemization makes it harder, not easier, for users to understand what they're being charged for. Compare Verizon versus Google fi statements, for example. The complexity hidden in all those fees confuses people, and let's Verizon (and others) claim monthly fees are X in ads, then listing that fee as X, then tacking on a lot of line items that make the actual payment much more. Be careful what you wish for.
- spywaregorilla 5y ago
  For the money
  - foolfoolz 5y ago
    all you need is a number smaller than 30%. build your own or use someone else for 10%? easy choice
    - spywaregorilla 5y ago
      10% sounds very aggressive to me still
      - trollied 5y ago
        Then high street margins for physical games would really surprise you...
        spywaregorilla 5y ago
        The physical game store isn't charging X% for payment processing. They're charging X% to get your product in front of customers.
        trollied 5y ago
        > They're charging X% to get your product in front of customers. Oh, right. The app store doesn't also do that?
        spywaregorilla 5y ago
        No not really. Can you imagine gamestop demanding a cut of dlc purchases because a physical game was originally purchased in their store? These are separate concepts.
        chongli 5y ago
        Retail stores have a finite and very small amount of shelf space. Publishers pay a lot for a significant percentage of that shelf space devoted to their product. The App Store has effectively infinite space. There are so many products and search is so broken that it's extremely difficult for users to discover your product. Rather than comparing the experience to brick and mortar stores a more apt comparison would be to throw your products in a landfill, junkyard, or extremely large flea market and expect your users to find them. Would you pay high commissions to a junkyard for tossing your product in a pile "somewhere in the back"?
- lmkg 5y ago
  To sell the purchase data to data brokers so they can aggregate purchase data across merchants by card number?
  - mertd 5y ago
    You don't need to control the checkout process to know who bought what from you.
volkk 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. the apple developer ecosystem (with regards to subscriptions and app purchases) in my experience has been quite awful for a multi trillion dollar company. really bad API docs, really poor experience around understanding what is even happening in their black box. i'm honestly astonished at how "unfinished" the whole experience feels. something like Stripe is on another level
- twno1 5y ago
  For example, the automatic domain validation of Apple Pay Merchant never happen. Merchant using letsencrypt need to validate domain every 3 by hand. And that "feature" even exists on their document.
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acdha 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. The first sentence is true but incomplete, making the second wrong. For example, the Amazon app is highly likely to have people using their existing Amazon payment method. Companies like Stripe are going to offer their own SDKs just like they do for web payments. Apple’s offerings are quite polished so I don’t think they’ll fall out of favor but it’s going to reduce their profit margin and I’m sure the number of people who will use alternatives is much greater than zero.
- eropple 5y ago
  Companies will want it, but I'm not sure users will. Apple does a really good job of warning me, I feel, and centralizing subscription cancellation etc., and that's huge. Like, if I have to go to your app--or worse, your website--to cancel a subscription? I'm gonna just not use your stuff, because I'm going to forget about it until you whack me for another year or whatever.
  - travoc 5y ago
    You would really pay a 30% premium on all your digital purchases just to be warned about a subscription expiring next year? You might be an edge case.
    - eropple 5y ago
      Third-party payment providers who I don't select, not being answerable to me as a platform holder, are incentivized to make it hard for me to cancel. Apple doesn't do that. I have better things to worry about than to track this stuff down and I desperately want to think about fewer stupid things in my life. Subscription management is solved and stupid. Perhaps look at it this way: I'm pretty OK with paying 30% to not pay 200% and, kinda more importantly, not to feel upset and angry later for forgetting a dark-patterned subscription dinging me again. If that's an edge case, y'all are wrong. Maybe Apple can straitjacket them properly. "You must use XYZ API in iOS/MacOS and you must support one-click cancellation via a standard process." But I think the dark-pattern farmers who are angry about this would be angry about that, too.
baldajan 5y ago
I'm not sure if you ever used StoreKit or their subscription API... its so full of holes and poor documentation and poor implementation that it's a nightmare to work with (particularly subscriptions). Don't believe me? There's a YC startup raising millions of dollars dedicated to solving the subscription implementation problems Apple has created...
- deleted 5y ago
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- moneywoes 5y ago
  Which startup?
  - kumarm 5y ago
    I think OP was talking about Revenue Cat: https://www.revenuecat.com https://www.revenuecat.com
MillenialMan 5y ago
Given the option, I think most customers would absolutely rather use the company's system, if the company offered lower prices for buying through them. Of course, that assumes both systems would be on offer - but if there's market pressure for companies to offer Apple as an option, that may be enough.
BackBlast 5y ago
Trying to hang onto systems where your customers resent paying you is not where you want to be. You bring up an interesting proposal, fundamentally Apple needs to create a system where developers WANT to pay the fees because of the value they get in using the system and services. And all those connected credit cards and customer identities definitely have value.
- paulmd 5y ago
  > Trying to hang onto systems where your customers resent paying you is not where you want to be. OK but like, dark patterns exist and everybody knows users don’t like them. Developers use them anyway because they’re profitable. Yeah I guess you feel bad but the bags of money help dry those tears. If there’s no chance of customers altering their decision )because you have something exclusive for which there is no substitute, or no good substitute) then there’s very little downside to dark patterns. And this is true even for something as banal as a newspaper subscription, where you would think there’s a lot of substitutes.
  - BackBlast 5y ago
    Maybe I'm just optimistic, but I believe that good and honest companies will generally prosper over those actively employing dark patterns in the long run. Any exclusive niche employing dark patterns makes an opportunity for an honest broker to come in and clean house.
    - paulmd 5y ago
      And that’s why the truth - Evil will triumph because good is dumb.
criddell 5y ago
I love the Apple subscription system for things like streaming services simply because it makes unsubscribing a one-click process. I’m much more likely to subscribe to something via the Apple store than I am through any in-app service.
- dontblink 5y ago
  Would you be willing to pay 30% more? Why not let people choose how they wish to pay. If you like that UX and are willing to pay for it, app developers should be able to offer it along with cheaper alternatives.
  - criddell 5y ago
    One of the things the App Store protects against is abusive practices like making it difficult to cancel a subscription. I wish there was some way they could protect their customers and allow outside payment services. FWIW, the streaming services I want easy unsubscribe options are typicall $5-$8 / month and yes, I would pay 30% more for a better experience.
- foxpurple 5y ago
  As a counter point, I always avoid subscribing via the app as the prices are higher than if you subscribe via the website. Google One has this where you pay more to use the apple method.
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laurent92 5y ago
> All Apple has to do is to make the rates competitive enough No. All Apple has to do is amplify a few horror stories, for example people using [any competitor]’s renewable subscriptions and not being able to unsubscribe. Or amplify a story of a virus/malware on, hopefully, Epic or Steam. This is certainly what makes you choose a MORE expensive product, that’s certainly why I buy my fire extinguishers $200 instead of $50 for the same model (but a trusted source). Apple should be able to keep a more expensive margin based on reputation alone.
- deleted 5y ago
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jwlake 5y ago
Apple's system does not allow a developer to refund a purchase. Seems like the height of half-assed.
- shagie 5y ago
  With iOS 15: https://developer.apple.com/documentation/storekit/transaction/3803220-beginrefundrequest https://developer.apple.com/documentation/storekit/transacti... > Call this function from account settings or a help menu to enable customers to request a refund for an in-app purchase within your app. When you call this function, the system displays a refund sheet with the customer’s purchase details and list of reason codes for the customer to choose from.
  - jwlake 5y ago
    Only took 12 versions!
nutanc 5y ago
It's not just that. As a developer I wouldn't want Apple to know who my paying customers are. Right now, there is no option. With this hopefully there will be more options.
- webmobdev 5y ago
  Exactly. And as a user too, I don't want Apple to have access to any of my financial transactions!
- cletus 5y ago
  There's two sides to this actually. I, as a customer, don't want to pay many companies directly. The prime example is any news publication. There are many I'd happily pay for except (like gym memberships it seems) it can be incredibly difficult to cancel. I won't reward that model so they get none of my money.
  - 8note 5y ago
    I think more specifically, as a customer, I don't want to be locked into bad subscriptions, whether it's gym memberships or news publications. I'm fine paying companies directly, but I don't want them to manage my subscriptions
  - woko 5y ago
    That is why I use Paypal. As a customer, why should I be constrained to use Apple's payment system as my only choice of middle-man?
- skohan 5y ago
  Why not? Not that I think it's an unreasonable position, but there's generally going to be some payment processor who knows who your paying customers are, right?
  - hnick 5y ago
    Apple is also in the software business. Payment processors aren't. They're a potential competitor with the power to build their own version of your offering after seeing your numbers, and lock you out of the store.
webmobdev 5y ago
> Every iOS and macOS user will prefer to use the Apple system. Speak for yourself. I am from India, and we already have much better payment systems then Apple's: 1. All our debit / credit card are chip-based. 2. No card transaction can happen without the PIN. Some online transactions require both a PIN and a password. 3. For any online transactions, the payment processors often support the following options to pay - using debit / credit card, directly from our bank account (Net Banking with 2FA), Unified Payments Interface (UPI) ( https://www.npci.org.in/what-we-do/upi/product-overview https://www.npci.org.in/what-we-do/upi/product-overview ) which is another online digital payment mode that even allows for easy peer to peer payment between parties and umpteen online / mobile digital wallets. 4. Best of all, using any of these payment modes won't allow Apple any access to my financial data. (And naturally Apple supports none of these popular modes in India because otherwise Apple would come under closer scrutiny from indian regulators.) As far as App Store commissions are considered, from a developer's perspective Apple can go screw themselves if they want anything more than what competing payment processors charge. (Like Epic, I am disappointed that consumer rights weren't considered at all - ultimately it is us owners / users of Apple devices that pay these 30%-50% or whatever commission!)
heavyset_go 5y ago
> 1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year. Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store, and their commissions tend to only be between 1% and 3% per transaction.
- djrogers 5y ago
  > Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store First of all - citation? Have you run a mutli-billion$$ App Store with hundreds of millions of individual customers, and the associated support channels etc? Secondly, Apple is also providing those 'infinitely more complex' payment processing services on top of the App Store, so even if true, your argument is kinda moot.
- shagie 5y ago
  The merchant fees for PayPal can be found at https://www.paypal.com/us/webapps/mpp/merchant-fees https://www.paypal.com/us/webapps/mpp/merchant-fees - which includes micro transactions. For a US company and a US customer, that's 4.99% + $0.09 for each transaction. For a $0.99 transaction, that's 15% of the total.
  - bjohnson225 5y ago
    Stripe is 2.9% + $0.30 in the US, 1.4% in Europe. Large merchants will also get a much more favourable deal than those prices.
Razengan 5y ago
Apple has always given me a refund for shitty apps without question, whereas shitty apps who have their own payment system, like CouchSurfing, never even respond to requests for refunds at all. The silent majority – the users – will always prefer to go through Apple. But HN seems to be full of user-hostile devs (as you can tell by looking at all the downvoted comments here who speak from a user’s PoV) who only hear the companies that want to break down the garden’s walls to prey upon users.
- collaborative 5y ago
  We are not user-hostile We just don't want to be vilified and forced to bow to the giants because of a few bad apples
- yyyk 5y ago
  The Apple fee model favours cheap shitty apps because that's the best way to not get gouged by Apple's fees. Relaxing that model will lead to better apps overall because finally you can invest and charge appropriately, you just need to trust yourself to not pay in apps you don't trust.
Zenst 5y ago
Another option is for Apple to offer their digital store as a service to larger players for a lower % fee. Akin to MVNO (Mobile Virtual Network Operators) and equally on some levels comparable in a way that building that type of network in the first place is costly and in Apples case, it is battle proven software back-end as well as front.
mdoms 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. I have been paying for things online for decades now and never once have I used Apple's payment system. I assure you, plenty of us will use payments not provided by the fruit company.
flohofwoe 5y ago
For the hypothetical case that there will ever be Steam on iOS I'd rather pay through the Steam account I had already setup on the PC rather than through the Apple payment system. Same for 'cross-platform' subscriptions like Spotify.
ElFitz 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. And to have to just through countless hoops to unsubscribe. Looking at you, annoyingly hard to unsubscribe from, New-York Times.
clairity 5y ago
> "they can / should do a couple of things, which might actually increase revenue." cutting prices that drastically will most certainly not increase revenue. in a competitive market, pricing is near/at the price elasticity equilibrium. in a monopoly situation, pricing is much beyond that point, in the company's favor. you're suggesting they move prices in the opposite direction, which would most certainly impact revenue negatively. note that these are not nascent, high growth markets where the growth rate can overwhelm the price elasticity dynamics. the court should be mandating broad, open, and honest competition, not dictating prices, which is will practically always get wrong in some way. price is a signal for how competitive a market is, not a lever to drive competition.
EamonnMR 5y ago
That may be true for Apple, but most Windows users prefer Steam to the MS Store, for example.
ltbarcly3 5y ago
People will prefer to use Apple's system if the cost is close enough to the same. The larger/more trusted the brand making the app is, or the higher the cost difference, the more likely the user will be to go to the trouble of going off platform to make the purchase. Most of the revenue Apple makes is from top apps and top brands, which is why they had no problem cutting the rates to 15% for the little guys already, the little guys are a tiny slice of the overall pie. There is no way this will overall increase Apple's revenue, especially as companies concentrate on building solid 'Apple fee avoidance' funnels. Not to mention that many pay-for apps will very likely convert to free to download and then push the user to pay for the app externally to the app store as a 'one time lifetime subscription'. This is going to cause a massive revenue loss for Apple if it stands.
sharkjacobs 5y ago
As a user my dream is that Apple actually puts in the effort and makes the changes to convince these companies to use IAP. My nightmare is that they don't and everyone drops IAP for a wilderness of credit card web forms.
falafel_muncher 5y ago
> most developers will happily just opt for Apple's system if the rates make sense The _buyer_ experience with Apple's IAP is mostly good, but I would argue that the developer experience is downright horrible. Working with subscriptions and IAP receipts is clunky. You can only use one of about 100 SKUs, which makes it difficult to offer discounts and customized pricing at the higher price tiers, where the gaps between amounts are quite large. Until recently, it wasn't even possible for developers to issue refunds! Even if Stripe charged 30%, I would choose them every time over Apple's IAP.
- forty 5y ago
  Thanks for the explanation. They must be talking about UX indeed. I have implemented subscription using many APIs (stripe, PayPal, processout, Apple, Amazon, Android...) And Apple is by far the shittiest. And you cannot even refund your own customers...
  - shagie 5y ago
    > And you cannot even refund your own customers... I was looking at StoreKit earlier today and saw https://developer.apple.com/documentation/storekit/transaction/3803220-beginrefundrequest https://developer.apple.com/documentation/storekit/transacti... as part of it. I realize that this is new with iOS 15... but there's something there now.
    - forty 5y ago
      Ah indeed there is... something. This is from yesterday https://techcrunch.com/2021/06/10/apples-storekit-2-simplifies-app-store-subscriptions-and-refunds-by-making-them-accessible-inside-apps/ https://techcrunch.com/2021/06/10/apples-storekit-2-simplifi... > “They’ve made the process a bit smoother, but developers still can’t initiate refunds or cancellations themselves,” notes RevenueCat CEO Jacob Eiting, whose company provides tools to app developers to manage their in-app purchases. “It’s a step in the right direction, but could actually lead to more confusion between developers and consumers about who is responsible for issuing refunds.” > In other words, because the forms are now going to be more accessible from inside the app, the customer may believe the developer is handling the refund process when, really, Apple continues to do so. Yeah, maybe that's even worse...
xkr 5y ago
As iOS and macOS user, I always subscribe directly through the app developer if they allow this. I stopped trusting Apple subscriptions when I called them asking to reimburse the subscription I forgot to cancel (just a few days later) and they said “no”. I never encountered any internet service declining this kind of requests.
the_gipsy 5y ago
Tragedy of the commons.
015a 5y ago
If you could choose between 30% of a billion dollars, or 15% of twenty billion, which would you pick? There are externalities to each choice, of course, but the correct answer is, actually, the obvious one. Apple is not in the right on this one, from any perspective. If they care about their users and developers: they'd drop the commission. If they cared about their revenue and investors: they'd drop the commission. Fortnite's protest should have been the wake-up call for the people dead asleep at the wheel of their App Store division. Epic very likely would have stayed on the App Store indefinitely at 15%; the issue has metastasized, and now Tim Sweeny has taken the stance of "alternate payment frameworks or nothing", but I'd bet every dollar I've got that if Fortnite's IAPs were at 15% before they left, they'd still be on the App Store. Everything is about money at the end of the day; Apple doubled-down, so now Epic had to double-down. Imagine a commission so reasonable that Netflix could sell its subscriptions there; that Amazon could sell books; that Fortnite could (maybe) return, and the next triple-A gaming hit that hadn't even considered mobile because of the commissions. That's the money Apple is leaving on the table. These companies WANT their products to be easy to buy; nothing makes that easier than App Store IAPs. There's a number that could work for everyone, but Apple comes to every negotiating table with their fingers plugged in their ears yelling "nah nah nah I can't hear you 30%" Apple's App Store policies throughout the 2010s will go down in history as the biggest blunder big tech has ever made. I am absolutely certain of this. They're throwing away an empire that could last a hundred years, because they think they're invincible. Tim Cook literally said, under oath, "we don't know how profitable the App Store is". They've publicized proudly about how they employ five hundred whole people to do hundreds of thousands of App Reviews. This is not malice or greed; its complete and total incompetence. Why are investors not OUTRAGED at Apple's leadership?!
- raverbashing 5y ago
  For real, obviously you're right. I wonder how much of this hard-headedness is on the App Store division and how much of it is Tim. Or just Apple Hubris. The only way the 30% would make sense is if publishing on the App Store was free. But of course it isn't, you need to pay a yearly fee for that.
- paulmd 5y ago
  I actually think it’s the exact opposite and Epic would have picked a fight with Apple even if the fees were 15%. This isn’t about fees and it’s not even (just) about Apple - Apple is just a relatively unsympathetic defendant for them to fire their opening shot. As noted, Microsoft fees are 30%, Google fees are 30%, etc, and yet Apple was singled out (with those companies actually jumping onto the lawsuit against Apple too). This is, more generally, about prying the Apple platform open, and other similar platforms like it. Remember, Epic didn’t start this suit over anti-steering clauses, the real goal here was epic getting their own third party store, which means they don’t have to pass an Apple review before being able to request permissions that let them mine data/etc. Thats a way bigger prize than (checks notes) 30% of 12 million dollars.
anothernewdude 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Including Apple's
whckt 5y ago
> no customer wants to use any company's half-assed bug-riddled purchase or subscription system They have this brilliant Apple Pay workflow that's almost completely unused in IAP — it bothered me that we couldn't just use Apple Pay to purchase a Spotify subscription directly in-app. Perhaps soon we'll see this.
themihai 5y ago
The IAP commission should be 0% and open to everyone.
arihant 5y ago
One of App Store's biggest draw for any developer is that they are compliant with VAT/GST of multiple countries. With Europe's MOSS now gone, I can't imagine individual app developers hiring an EU rep just so they can comply with EU VAT legally. And that's just EU. You can't even easily comply with Indian GST without incorporating a subsidiary there. Now Canada is also in the mix. And those are just 3 regions. US Sales Tax is another money pit, with proper compliance costing hundreds of dollars per month for each state you develop nexus in. Add to that the fact that App Store purchases are riddled with fake cards and usually draw a much higher MDR from merchant accounts. If people are rejoicing that they can just hook up their Stripe and world will be rainbows, they are in for a shut down email pretty soon.
WhyNotHugo 5y ago
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Apple only takes credit card in most countries. This makes sense in countries where credit cards are the norm, but not in countries where credit cards are not the norm and far from ubiquitous. OTOH, external payment providers (eg: stripe) often integrate with local payment mechanism. In my case, local payment mechanisms are far simpler, easier, and secure. Using a credit card requires me moving money into my Wise account before I can pay anything, adding so many extra steps. Not to mention that I have to remember to transfer money every month before subscriptions get charged. Plus, the whole online payment system with credit cards is utterly unsafe: share your "secret number" with all merchants and pray none of them leak it or overcharge you.
mstade 5y ago
> The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system. I have an app like that that's already done and in the app store. We would love to take advantage of Apple Pay for subscriptions, but the 30% tax means we literally can't. We'd have to jack our prices so much that the cost becomes prohibitive, and if we take the 30% hit ourselves we'd basically be giving things away for free. If the cost would drop to somewhere in the 5-15% range it's a whole new ballgame. EDIT: For anyone who's wondering – we basically use the same strategy as Netflix et al, the app is useless unless you already have an account and in order to get one you have to sign up elsewhere. We don't have links or information on how to sign up, you have to just magically end up on our site or have an account added through one of our partners.
raxxorrax 5y ago
The thing is that it is still worse than an open system. Why pay the bridge bandit? There is some infrastructure and that is fine, but I hate to see the tendency in tech to insert themselves as middle man. OS that don't do that are superior targets.

mertd 5y ago

Why do you think people would implement their own IAP? It would most likely be a few competing platforms like Shopify for web purchases.

WA 5y ago
Exactly. Stripe and PayPal could be integrated easily.
- ethbr0 5y ago
  But Stripe and PayPal and Square have far lower fees... oh. Now I see what this was about.
  - dpkonofa 5y ago
    I don't think you do. Stripe and PayPal are only payment processors. If Apple now has to allow other payment processors then they're either going to charge fees for hosting the files or they're going to charge fees for the other services that people are using (OTA updates, reviews, localization, etc.). All that stuff will still have to be in place so it'll just be an issue of whether or not these companies will have to stand up their own versions of this (or if they even can) and whether or not it'll be as seamless for the end user.
    - ethbr0 5y ago
      Yes. And good. The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market. The central evil of all of this has been the bundling of everything together, so that nothing can be independently valued. "30% is fair, in exchange for all the things we provide you", etc. Edit: As an example, in the US this is mandated for home mortgages. "These are services you can shop for" + "These are charges for each service". Any platform having to offer the equivalent of a Closing Disclosure / HUD-1 doesn't seem like such a bad world.
      - Spivak 5y ago
        I mean you also assume that it will be line-item'd instead of "give us 30% of your revenue made through iOS" in the ToS to publish an app which has any paid features or content.
        ethbr0 5y ago
        At least then, we'd be honest that it's extortion.
      - ChrisLomont 5y ago
        >The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market. Historically line itemization makes it harder, not easier, for users to understand what they're being charged for. Compare Verizon versus Google fi statements, for example. The complexity hidden in all those fees confuses people, and let's Verizon (and others) claim monthly fees are X in ads, then listing that fee as X, then tacking on a lot of line items that make the actual payment much more. Be careful what you wish for.
spywaregorilla 5y ago
For the money
- foolfoolz 5y ago
  all you need is a number smaller than 30%. build your own or use someone else for 10%? easy choice
  - spywaregorilla 5y ago
    10% sounds very aggressive to me still
    - trollied 5y ago
      Then high street margins for physical games would really surprise you...
      - spywaregorilla 5y ago
        The physical game store isn't charging X% for payment processing. They're charging X% to get your product in front of customers.
        trollied 5y ago
        > They're charging X% to get your product in front of customers. Oh, right. The app store doesn't also do that?
        spywaregorilla 5y ago
        No not really. Can you imagine gamestop demanding a cut of dlc purchases because a physical game was originally purchased in their store? These are separate concepts.
        chongli 5y ago
        Retail stores have a finite and very small amount of shelf space. Publishers pay a lot for a significant percentage of that shelf space devoted to their product. The App Store has effectively infinite space. There are so many products and search is so broken that it's extremely difficult for users to discover your product. Rather than comparing the experience to brick and mortar stores a more apt comparison would be to throw your products in a landfill, junkyard, or extremely large flea market and expect your users to find them. Would you pay high commissions to a junkyard for tossing your product in a pile "somewhere in the back"?
lmkg 5y ago
To sell the purchase data to data brokers so they can aggregate purchase data across merchants by card number?
- mertd 5y ago
  You don't need to control the checkout process to know who bought what from you.

volkk 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. the apple developer ecosystem (with regards to subscriptions and app purchases) in my experience has been quite awful for a multi trillion dollar company. really bad API docs, really poor experience around understanding what is even happening in their black box. i'm honestly astonished at how "unfinished" the whole experience feels. something like Stripe is on another level

twno1 5y ago
For example, the automatic domain validation of Apple Pay Merchant never happen. Merchant using letsencrypt need to validate domain every 3 by hand. And that "feature" even exists on their document.

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acdha 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. The first sentence is true but incomplete, making the second wrong. For example, the Amazon app is highly likely to have people using their existing Amazon payment method. Companies like Stripe are going to offer their own SDKs just like they do for web payments. Apple’s offerings are quite polished so I don’t think they’ll fall out of favor but it’s going to reduce their profit margin and I’m sure the number of people who will use alternatives is much greater than zero.

eropple 5y ago
Companies will want it, but I'm not sure users will. Apple does a really good job of warning me, I feel, and centralizing subscription cancellation etc., and that's huge. Like, if I have to go to your app--or worse, your website--to cancel a subscription? I'm gonna just not use your stuff, because I'm going to forget about it until you whack me for another year or whatever.
- travoc 5y ago
  You would really pay a 30% premium on all your digital purchases just to be warned about a subscription expiring next year? You might be an edge case.
  - eropple 5y ago
    Third-party payment providers who I don't select, not being answerable to me as a platform holder, are incentivized to make it hard for me to cancel. Apple doesn't do that. I have better things to worry about than to track this stuff down and I desperately want to think about fewer stupid things in my life. Subscription management is solved and stupid. Perhaps look at it this way: I'm pretty OK with paying 30% to not pay 200% and, kinda more importantly, not to feel upset and angry later for forgetting a dark-patterned subscription dinging me again. If that's an edge case, y'all are wrong. Maybe Apple can straitjacket them properly. "You must use XYZ API in iOS/MacOS and you must support one-click cancellation via a standard process." But I think the dark-pattern farmers who are angry about this would be angry about that, too.

baldajan 5y ago

I'm not sure if you ever used StoreKit or their subscription API... its so full of holes and poor documentation and poor implementation that it's a nightmare to work with (particularly subscriptions). Don't believe me? There's a YC startup raising millions of dollars dedicated to solving the subscription implementation problems Apple has created...

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moneywoes 5y ago
Which startup?
- kumarm 5y ago
  I think OP was talking about Revenue Cat: https://www.revenuecat.com https://www.revenuecat.com

MillenialMan 5y ago

Given the option, I think most customers would absolutely rather use the company's system, if the company offered lower prices for buying through them. Of course, that assumes both systems would be on offer - but if there's market pressure for companies to offer Apple as an option, that may be enough.

BackBlast 5y ago

Trying to hang onto systems where your customers resent paying you is not where you want to be. You bring up an interesting proposal, fundamentally Apple needs to create a system where developers WANT to pay the fees because of the value they get in using the system and services. And all those connected credit cards and customer identities definitely have value.

paulmd 5y ago
> Trying to hang onto systems where your customers resent paying you is not where you want to be. OK but like, dark patterns exist and everybody knows users don’t like them. Developers use them anyway because they’re profitable. Yeah I guess you feel bad but the bags of money help dry those tears. If there’s no chance of customers altering their decision )because you have something exclusive for which there is no substitute, or no good substitute) then there’s very little downside to dark patterns. And this is true even for something as banal as a newspaper subscription, where you would think there’s a lot of substitutes.
- BackBlast 5y ago
  Maybe I'm just optimistic, but I believe that good and honest companies will generally prosper over those actively employing dark patterns in the long run. Any exclusive niche employing dark patterns makes an opportunity for an honest broker to come in and clean house.
  - paulmd 5y ago
    And that’s why the truth - Evil will triumph because good is dumb.

criddell 5y ago

I love the Apple subscription system for things like streaming services simply because it makes unsubscribing a one-click process. I’m much more likely to subscribe to something via the Apple store than I am through any in-app service.

dontblink 5y ago
Would you be willing to pay 30% more? Why not let people choose how they wish to pay. If you like that UX and are willing to pay for it, app developers should be able to offer it along with cheaper alternatives.
- criddell 5y ago
  One of the things the App Store protects against is abusive practices like making it difficult to cancel a subscription. I wish there was some way they could protect their customers and allow outside payment services. FWIW, the streaming services I want easy unsubscribe options are typicall $5-$8 / month and yes, I would pay 30% more for a better experience.
foxpurple 5y ago
As a counter point, I always avoid subscribing via the app as the prices are higher than if you subscribe via the website. Google One has this where you pay more to use the apple method.

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laurent92 5y ago

> All Apple has to do is to make the rates competitive enough No. All Apple has to do is amplify a few horror stories, for example people using [any competitor]’s renewable subscriptions and not being able to unsubscribe. Or amplify a story of a virus/malware on, hopefully, Epic or Steam. This is certainly what makes you choose a MORE expensive product, that’s certainly why I buy my fire extinguishers $200 instead of $50 for the same model (but a trusted source). Apple should be able to keep a more expensive margin based on reputation alone.

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jwlake 5y ago

Apple's system does not allow a developer to refund a purchase. Seems like the height of half-assed.

shagie 5y ago
With iOS 15: https://developer.apple.com/documentation/storekit/transaction/3803220-beginrefundrequest https://developer.apple.com/documentation/storekit/transacti... > Call this function from account settings or a help menu to enable customers to request a refund for an in-app purchase within your app. When you call this function, the system displays a refund sheet with the customer’s purchase details and list of reason codes for the customer to choose from.
- jwlake 5y ago
  Only took 12 versions!

nutanc 5y ago

It's not just that. As a developer I wouldn't want Apple to know who my paying customers are. Right now, there is no option. With this hopefully there will be more options.

webmobdev 5y ago
Exactly. And as a user too, I don't want Apple to have access to any of my financial transactions!
cletus 5y ago
There's two sides to this actually. I, as a customer, don't want to pay many companies directly. The prime example is any news publication. There are many I'd happily pay for except (like gym memberships it seems) it can be incredibly difficult to cancel. I won't reward that model so they get none of my money.
- 8note 5y ago
  I think more specifically, as a customer, I don't want to be locked into bad subscriptions, whether it's gym memberships or news publications. I'm fine paying companies directly, but I don't want them to manage my subscriptions
- woko 5y ago
  That is why I use Paypal. As a customer, why should I be constrained to use Apple's payment system as my only choice of middle-man?
skohan 5y ago
Why not? Not that I think it's an unreasonable position, but there's generally going to be some payment processor who knows who your paying customers are, right?
- hnick 5y ago
  Apple is also in the software business. Payment processors aren't. They're a potential competitor with the power to build their own version of your offering after seeing your numbers, and lock you out of the store.

webmobdev 5y ago

> Every iOS and macOS user will prefer to use the Apple system. Speak for yourself. I am from India, and we already have much better payment systems then Apple's: 1. All our debit / credit card are chip-based. 2. No card transaction can happen without the PIN. Some online transactions require both a PIN and a password. 3. For any online transactions, the payment processors often support the following options to pay - using debit / credit card, directly from our bank account (Net Banking with 2FA), Unified Payments Interface (UPI) ( https://www.npci.org.in/what-we-do/upi/product-overview https://www.npci.org.in/what-we-do/upi/product-overview ) which is another online digital payment mode that even allows for easy peer to peer payment between parties and umpteen online / mobile digital wallets. 4. Best of all, using any of these payment modes won't allow Apple any access to my financial data. (And naturally Apple supports none of these popular modes in India because otherwise Apple would come under closer scrutiny from indian regulators.) As far as App Store commissions are considered, from a developer's perspective Apple can go screw themselves if they want anything more than what competing payment processors charge. (Like Epic, I am disappointed that consumer rights weren't considered at all - ultimately it is us owners / users of Apple devices that pay these 30%-50% or whatever commission!)

heavyset_go 5y ago

> 1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year. Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store, and their commissions tend to only be between 1% and 3% per transaction.

djrogers 5y ago
> Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store First of all - citation? Have you run a mutli-billion$$ App Store with hundreds of millions of individual customers, and the associated support channels etc? Secondly, Apple is also providing those 'infinitely more complex' payment processing services on top of the App Store, so even if true, your argument is kinda moot.
shagie 5y ago
The merchant fees for PayPal can be found at https://www.paypal.com/us/webapps/mpp/merchant-fees https://www.paypal.com/us/webapps/mpp/merchant-fees - which includes micro transactions. For a US company and a US customer, that's 4.99% + $0.09 for each transaction. For a $0.99 transaction, that's 15% of the total.
- bjohnson225 5y ago
  Stripe is 2.9% + $0.30 in the US, 1.4% in Europe. Large merchants will also get a much more favourable deal than those prices.

Razengan 5y ago

Apple has always given me a refund for shitty apps without question, whereas shitty apps who have their own payment system, like CouchSurfing, never even respond to requests for refunds at all. The silent majority – the users – will always prefer to go through Apple. But HN seems to be full of user-hostile devs (as you can tell by looking at all the downvoted comments here who speak from a user’s PoV) who only hear the companies that want to break down the garden’s walls to prey upon users.

collaborative 5y ago
We are not user-hostile We just don't want to be vilified and forced to bow to the giants because of a few bad apples
yyyk 5y ago
The Apple fee model favours cheap shitty apps because that's the best way to not get gouged by Apple's fees. Relaxing that model will lead to better apps overall because finally you can invest and charge appropriately, you just need to trust yourself to not pay in apps you don't trust.

Zenst 5y ago

Another option is for Apple to offer their digital store as a service to larger players for a lower % fee. Akin to MVNO (Mobile Virtual Network Operators) and equally on some levels comparable in a way that building that type of network in the first place is costly and in Apples case, it is battle proven software back-end as well as front.

mdoms 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. I have been paying for things online for decades now and never once have I used Apple's payment system. I assure you, plenty of us will use payments not provided by the fruit company.

flohofwoe 5y ago

For the hypothetical case that there will ever be Steam on iOS I'd rather pay through the Steam account I had already setup on the PC rather than through the Apple payment system. Same for 'cross-platform' subscriptions like Spotify.

ElFitz 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. And to have to just through countless hoops to unsubscribe. Looking at you, annoyingly hard to unsubscribe from, New-York Times.

clairity 5y ago

> "they can / should do a couple of things, which might actually increase revenue." cutting prices that drastically will most certainly not increase revenue. in a competitive market, pricing is near/at the price elasticity equilibrium. in a monopoly situation, pricing is much beyond that point, in the company's favor. you're suggesting they move prices in the opposite direction, which would most certainly impact revenue negatively. note that these are not nascent, high growth markets where the growth rate can overwhelm the price elasticity dynamics. the court should be mandating broad, open, and honest competition, not dictating prices, which is will practically always get wrong in some way. price is a signal for how competitive a market is, not a lever to drive competition.

EamonnMR 5y ago

That may be true for Apple, but most Windows users prefer Steam to the MS Store, for example.

ltbarcly3 5y ago

People will prefer to use Apple's system if the cost is close enough to the same. The larger/more trusted the brand making the app is, or the higher the cost difference, the more likely the user will be to go to the trouble of going off platform to make the purchase. Most of the revenue Apple makes is from top apps and top brands, which is why they had no problem cutting the rates to 15% for the little guys already, the little guys are a tiny slice of the overall pie. There is no way this will overall increase Apple's revenue, especially as companies concentrate on building solid 'Apple fee avoidance' funnels. Not to mention that many pay-for apps will very likely convert to free to download and then push the user to pay for the app externally to the app store as a 'one time lifetime subscription'. This is going to cause a massive revenue loss for Apple if it stands.

sharkjacobs 5y ago

As a user my dream is that Apple actually puts in the effort and makes the changes to convince these companies to use IAP. My nightmare is that they don't and everyone drops IAP for a wilderness of credit card web forms.

falafel_muncher 5y ago

> most developers will happily just opt for Apple's system if the rates make sense The _buyer_ experience with Apple's IAP is mostly good, but I would argue that the developer experience is downright horrible. Working with subscriptions and IAP receipts is clunky. You can only use one of about 100 SKUs, which makes it difficult to offer discounts and customized pricing at the higher price tiers, where the gaps between amounts are quite large. Until recently, it wasn't even possible for developers to issue refunds! Even if Stripe charged 30%, I would choose them every time over Apple's IAP.

forty 5y ago
Thanks for the explanation. They must be talking about UX indeed. I have implemented subscription using many APIs (stripe, PayPal, processout, Apple, Amazon, Android...) And Apple is by far the shittiest. And you cannot even refund your own customers...
- shagie 5y ago
  > And you cannot even refund your own customers... I was looking at StoreKit earlier today and saw https://developer.apple.com/documentation/storekit/transaction/3803220-beginrefundrequest https://developer.apple.com/documentation/storekit/transacti... as part of it. I realize that this is new with iOS 15... but there's something there now.
  - forty 5y ago
    Ah indeed there is... something. This is from yesterday https://techcrunch.com/2021/06/10/apples-storekit-2-simplifies-app-store-subscriptions-and-refunds-by-making-them-accessible-inside-apps/ https://techcrunch.com/2021/06/10/apples-storekit-2-simplifi... > “They’ve made the process a bit smoother, but developers still can’t initiate refunds or cancellations themselves,” notes RevenueCat CEO Jacob Eiting, whose company provides tools to app developers to manage their in-app purchases. “It’s a step in the right direction, but could actually lead to more confusion between developers and consumers about who is responsible for issuing refunds.” > In other words, because the forms are now going to be more accessible from inside the app, the customer may believe the developer is handling the refund process when, really, Apple continues to do so. Yeah, maybe that's even worse...

xkr 5y ago

As iOS and macOS user, I always subscribe directly through the app developer if they allow this. I stopped trusting Apple subscriptions when I called them asking to reimburse the subscription I forgot to cancel (just a few days later) and they said “no”. I never encountered any internet service declining this kind of requests.

the_gipsy 5y ago

Tragedy of the commons.

015a 5y ago

If you could choose between 30% of a billion dollars, or 15% of twenty billion, which would you pick? There are externalities to each choice, of course, but the correct answer is, actually, the obvious one. Apple is not in the right on this one, from any perspective. If they care about their users and developers: they'd drop the commission. If they cared about their revenue and investors: they'd drop the commission. Fortnite's protest should have been the wake-up call for the people dead asleep at the wheel of their App Store division. Epic very likely would have stayed on the App Store indefinitely at 15%; the issue has metastasized, and now Tim Sweeny has taken the stance of "alternate payment frameworks or nothing", but I'd bet every dollar I've got that if Fortnite's IAPs were at 15% before they left, they'd still be on the App Store. Everything is about money at the end of the day; Apple doubled-down, so now Epic had to double-down. Imagine a commission so reasonable that Netflix could sell its subscriptions there; that Amazon could sell books; that Fortnite could (maybe) return, and the next triple-A gaming hit that hadn't even considered mobile because of the commissions. That's the money Apple is leaving on the table. These companies WANT their products to be easy to buy; nothing makes that easier than App Store IAPs. There's a number that could work for everyone, but Apple comes to every negotiating table with their fingers plugged in their ears yelling "nah nah nah I can't hear you 30%" Apple's App Store policies throughout the 2010s will go down in history as the biggest blunder big tech has ever made. I am absolutely certain of this. They're throwing away an empire that could last a hundred years, because they think they're invincible. Tim Cook literally said, under oath, "we don't know how profitable the App Store is". They've publicized proudly about how they employ five hundred whole people to do hundreds of thousands of App Reviews. This is not malice or greed; its complete and total incompetence. Why are investors not OUTRAGED at Apple's leadership?!

raverbashing 5y ago
For real, obviously you're right. I wonder how much of this hard-headedness is on the App Store division and how much of it is Tim. Or just Apple Hubris. The only way the 30% would make sense is if publishing on the App Store was free. But of course it isn't, you need to pay a yearly fee for that.
paulmd 5y ago
I actually think it’s the exact opposite and Epic would have picked a fight with Apple even if the fees were 15%. This isn’t about fees and it’s not even (just) about Apple - Apple is just a relatively unsympathetic defendant for them to fire their opening shot. As noted, Microsoft fees are 30%, Google fees are 30%, etc, and yet Apple was singled out (with those companies actually jumping onto the lawsuit against Apple too). This is, more generally, about prying the Apple platform open, and other similar platforms like it. Remember, Epic didn’t start this suit over anti-steering clauses, the real goal here was epic getting their own third party store, which means they don’t have to pass an Apple review before being able to request permissions that let them mine data/etc. Thats a way bigger prize than (checks notes) 30% of 12 million dollars.

anothernewdude 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Including Apple's

whckt 5y ago

> no customer wants to use any company's half-assed bug-riddled purchase or subscription system They have this brilliant Apple Pay workflow that's almost completely unused in IAP — it bothered me that we couldn't just use Apple Pay to purchase a Spotify subscription directly in-app. Perhaps soon we'll see this.

themihai 5y ago

The IAP commission should be 0% and open to everyone.

arihant 5y ago

One of App Store's biggest draw for any developer is that they are compliant with VAT/GST of multiple countries. With Europe's MOSS now gone, I can't imagine individual app developers hiring an EU rep just so they can comply with EU VAT legally. And that's just EU. You can't even easily comply with Indian GST without incorporating a subsidiary there. Now Canada is also in the mix. And those are just 3 regions. US Sales Tax is another money pit, with proper compliance costing hundreds of dollars per month for each state you develop nexus in. Add to that the fact that App Store purchases are riddled with fake cards and usually draw a much higher MDR from merchant accounts. If people are rejoicing that they can just hook up their Stripe and world will be rainbows, they are in for a shut down email pretty soon.

WhyNotHugo 5y ago

> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Apple only takes credit card in most countries. This makes sense in countries where credit cards are the norm, but not in countries where credit cards are not the norm and far from ubiquitous. OTOH, external payment providers (eg: stripe) often integrate with local payment mechanism. In my case, local payment mechanisms are far simpler, easier, and secure. Using a credit card requires me moving money into my Wise account before I can pay anything, adding so many extra steps. Not to mention that I have to remember to transfer money every month before subscriptions get charged. Plus, the whole online payment system with credit cards is utterly unsafe: share your "secret number" with all merchants and pray none of them leak it or overcharge you.

mstade 5y ago

> The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system. I have an app like that that's already done and in the app store. We would love to take advantage of Apple Pay for subscriptions, but the 30% tax means we literally can't. We'd have to jack our prices so much that the cost becomes prohibitive, and if we take the 30% hit ourselves we'd basically be giving things away for free. If the cost would drop to somewhere in the 5-15% range it's a whole new ballgame. EDIT: For anyone who's wondering – we basically use the same strategy as Netflix et al, the app is useless unless you already have an account and in order to get one you have to sign up elsewhere. We don't have links or information on how to sign up, you have to just magically end up on our site or have an account added through one of our partners.

raxxorrax 5y ago

The thing is that it is still worse than an open system. Why pay the bridge bandit? There is some infrastructure and that is fine, but I hate to see the tendency in tech to insert themselves as middle man. OS that don't do that are superior targets.