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Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. When Apple's payment system is the

Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. When Apple's payment system is the only option, its high fees (unfavorable terms) generate a huge amount of deadweight loss in the app economy. What Apple needs to do is find a way to allow its users to retain as much of the convenience of its own payment system as possible without violating antitrust regulations. This is achievable by, for example, requiring apps to let users quickly and easily unsubscribe from recurring subscriptions in the app itself. Currently, iOS users have little to no leverage against Apple. To make certain kinds of purchases in iOS, buyers must pay a large price premium to subsidize Apple's fee regardless of whether they prefer to do so. The Dutch antitrust regulator recognizes this as a problem, and is instructing Apple to correct the situation. How Apple proceeds from here will determine the user experience on its platform, but continuing to violate antitrust laws harms both users and developers through market inefficiency.

threatofrain 5y ago
> Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. When Apple's payment system is the only option, its high fees (unfavorable terms) generate a huge amount of deadweight loss in the app economy. > Currently, iOS users have little to no leverage against Apple. To make certain kinds of purchases in iOS, buyers must pay a large price premium to subsidize Apple's fee regardless of whether they prefer to do so. Instead of chatting abstractly about high fees, why don't we put some numbers on the table? Apple Pay's "high fees" go to banks at 0.15% per transaction, or 15 cents per $100.¹ The IAP fee is not the same thing as Apple Pay. Apple Pay is a protocol for payment where neither Apple nor the store keep your credit card information. IAP is a revenue sharing agreement with Apple. Many people agree that the IAP is onerous, and as a business contract it is subject to various legal jurisdictions. If you disagree with high fees, we should really be talking about the IAP and not Apple Pay. > Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. I see this ordering of effects as backwards: first Apple uses its leverage, which derives from its hundreds of millions of more spendy users, and now we have Apple Pay, a private system of paying where even Apple does not store your credit card number on their servers, or other identifying information.² This differs from Privacy.com, where you may directly linking your debit account. Also note that you may wish to be careful when cancelling a "disposable" credit card when you have recurring charges. An individual customer of insurance does not have leverage over the insurance company. As a collective, you have all the leverage, which in turn means more bargaining power for the insurance company. As an individual member of Costco, you have no leverage over Costco. As a collective, you have the only reason why Costco can demand better prices. [1]: https://www.wsj.com/articles/apple-pay-fees-vex-credit-card-issuers-11633449317 https://www.wsj.com/articles/apple-pay-fees-vex-credit-card-... [2]: https://www.apple.com/legal/privacy/data/en/apple-pay/ https://www.apple.com/legal/privacy/data/en/apple-pay/ Also, thanks for chatting.
- commoner 5y ago
  By "Apple payment's system" I'm referring to any payment system that Apple mandates the use of on iOS, all of which Apple takes a 15-30% cut from revenue. I'm not referring Apple Pay except when I specifically mention it by name. I don't use "IAP" to refer to Apple's payment system, because I'm including purchases through the App Store itself, and those aren't IAPs. 95% of purchases through Apple's payment system (App Store + IAP) by volume are subject to Apple's 30% fee.[1] Sellers need to raise the price by ~42.9% to recover the 30% cut, and the cost of that fee is subsidized by the buyers. Those are hard numbers that have a negative impact on both users and developers. Yes, I agree that Apple helps provide users with leverage against iOS developers when they overstep boundaries on privacy in some cases. But, Apple never provides users with leverage against Apple itself. Many users and iOS developers are too small to directly challenge Apple when it engages in anti-competitive practices, so that is where government comes in to provide leverage to users and developers against Apple. Thanks for explaining your perspective. [1] https://www.nytimes.com/2020/11/18/technology/apple-app-store-fee.html https://www.nytimes.com/2020/11/18/technology/apple-app-stor...

threatofrain 5y ago

> Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. When Apple's payment system is the only option, its high fees (unfavorable terms) generate a huge amount of deadweight loss in the app economy. > Currently, iOS users have little to no leverage against Apple. To make certain kinds of purchases in iOS, buyers must pay a large price premium to subsidize Apple's fee regardless of whether they prefer to do so. Instead of chatting abstractly about high fees, why don't we put some numbers on the table? Apple Pay's "high fees" go to banks at 0.15% per transaction, or 15 cents per $100.¹ The IAP fee is not the same thing as Apple Pay. Apple Pay is a protocol for payment where neither Apple nor the store keep your credit card information. IAP is a revenue sharing agreement with Apple. Many people agree that the IAP is onerous, and as a business contract it is subject to various legal jurisdictions. If you disagree with high fees, we should really be talking about the IAP and not Apple Pay. > Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time. I see this ordering of effects as backwards: first Apple uses its leverage, which derives from its hundreds of millions of more spendy users, and now we have Apple Pay, a private system of paying where even Apple does not store your credit card number on their servers, or other identifying information.² This differs from Privacy.com, where you may directly linking your debit account. Also note that you may wish to be careful when cancelling a "disposable" credit card when you have recurring charges. An individual customer of insurance does not have leverage over the insurance company. As a collective, you have all the leverage, which in turn means more bargaining power for the insurance company. As an individual member of Costco, you have no leverage over Costco. As a collective, you have the only reason why Costco can demand better prices. [1]: https://www.wsj.com/articles/apple-pay-fees-vex-credit-card-issuers-11633449317 https://www.wsj.com/articles/apple-pay-fees-vex-credit-card-... [2]: https://www.apple.com/legal/privacy/data/en/apple-pay/ https://www.apple.com/legal/privacy/data/en/apple-pay/ Also, thanks for chatting.

commoner 5y ago
By "Apple payment's system" I'm referring to any payment system that Apple mandates the use of on iOS, all of which Apple takes a 15-30% cut from revenue. I'm not referring Apple Pay except when I specifically mention it by name. I don't use "IAP" to refer to Apple's payment system, because I'm including purchases through the App Store itself, and those aren't IAPs. 95% of purchases through Apple's payment system (App Store + IAP) by volume are subject to Apple's 30% fee.[1] Sellers need to raise the price by ~42.9% to recover the 30% cut, and the cost of that fee is subsidized by the buyers. Those are hard numbers that have a negative impact on both users and developers. Yes, I agree that Apple helps provide users with leverage against iOS developers when they overstep boundaries on privacy in some cases. But, Apple never provides users with leverage against Apple itself. Many users and iOS developers are too small to directly challenge Apple when it engages in anti-competitive practices, so that is where government comes in to provide leverage to users and developers against Apple. Thanks for explaining your perspective. [1] https://www.nytimes.com/2020/11/18/technology/apple-app-store-fee.html https://www.nytimes.com/2020/11/18/technology/apple-app-stor...