4 ms·

the closed gardens of mobile app stores don't have the regular healthy market competition that normal payment processors do. it's one of my least favourite part

the closed gardens of mobile app stores don't have the regular healthy market competition that normal payment processors do. it's one of my least favourite parts of building for mobile

mrweasel 3y ago
I'm just questioning the point in offering a "deal" like this to Spotify, when Spotify can just handle their own payments for less. Is those 4% really worth that much to Google that it's outways the risk of others being made aware of how little payments actually cost Google to run. Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more?
- freedomben 3y ago
  This clearly wasn't intended to get out, and predicting that Epic would file suit and then it would leak out of the court would be a hard reason to argue against trying to negotiate business in the moment.
- agloe_dreams 3y ago
  I don't think you understand that over at Apple, not paying the 30% is not being on iPhone..period. Not being on the play store is not being on Android for 90% of customers. This is why both are facing major antitrust cases.
  - mrweasel 3y ago
    Aaah, okay, I was under the impression that you could actually be present on the Play Store as a subscription service and just handle your own payments and that would be perfectly acceptable. But that makes the deal even weirder, Spotify doesn't have a choice, yet they have a completely insane deal.
    - agloe_dreams 3y ago
      No Spotify = No Pixel Sales.
  - ogreswamp 3y ago
    That is simply not true. You can easily set account creation and payment on your website for "reader apps" if you're not willing to share 30/15% with Apple. (and Spotify & Netflix qualify as reader apps). Apple even allows you to put a link to your website for account creation right in the app (they didn't allow that in the past). https://developer.apple.com/support/reader-apps https://developer.apple.com/support/reader-apps Many companies (like Google) move Apple's subscription fee to end users, so don't feel too pity about them. Just compare YouTube premium cost as an in-app purchase and on the website. €15.99 vs €11.99 here in Ireland. Google had a choice not to offer the YouTube subscription as IAP and just link people to the website. But the conversion rate for IAP is way higher compared to the website link, so they just punish their users, who pay €4 extra every month.
    - willsmith72 3y ago
      Most apps aren't reader apps, that's a very special (and relatively new) rule
      - ogreswamp 3y ago
        You're correct, most of apps aren’t. But the subject app Spotify falls under it.
    - agloe_dreams 3y ago
      Reader apps are an extremely specific clause, mostly related to their Ebook price fixing lawsuit. Zero of the apps in discussion here are reader apps. I should also note, that up until recently, Apple specifically had clauses that you couldn't have the link to the website bit AND they had a 'you can't pass the price onto customers' rule.
      - ogreswamp 3y ago
        Reader apps is quite wide category. It includes pretty much all types of content - ebooks, videos, audio etc. Spotify and Netflix falls under it afaik.
- jsnell 3y ago
  Netflix currently pay 0%, getting them to agree to 4% sounds like a pretty good deal.
- hutzlibu 3y ago
  "Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more? " I would suspect, they have a special deal as well.
bushbaba 3y ago
Normal payment processors don’t need to maintain the os ecosystem. Arguably Google needs to do the same work as a traditional payment processor AND much more.
- bogwog 3y ago
  > Arguably Google needs to do the same work as a traditional payment processor Unarguably, they don't need to do that. They want to, because a monopoly on payment processing makes a lot of money. If 4%/15%/30%/whatever is what Google needs to charge to run their payment processing business, that shows that they're extremely inefficient/incompetent, and the market would be more efficient if other companies were able to offer that service instead. Last I checked, Stripe charges 2.9%, which is even less than what Google charges Spotify in this unicorn deal. EDIT: the same goes for "store infrastructure" or whatever. If Google offered publishers the option to run their own infrastructure for distributing apps/updates/whatever, everyone would take that deal rather than pay Google's nonsense fees.
  - freedomben 3y ago
    Even 2.9% (which is what card payment processors charge as well) is ludicrously high. They make a very, very healthy profit margin with that. One of my greatest disappointments about cryptocurrencies is that they didn't destroy that ridiculousness.
    - thallium205 3y ago
      The money largely funds consumer protection products such as when chargebacks have to be executed on fraudulent or other disputed transactions on your card. Zero liability guarantees that the card network infrastructure offers consumers come at a cost which is found here. Think of it as an insurance policy paid on every transaction which explains why it has to be a %. Crypto offers no protections so no fees need to be taken.
  - brookst 3y ago
    Characterizing app store fees as purely for payment processing is so disingenuous it's hard to even engage. The reality is these fees are for access to an audience. Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day. Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.
aalimov_ 3y ago
While you may have a point about competition, comparing credit card processors and app stores solely on fee structure doesn’t make for an honest comparison because you get to ignore all the other things they do.
kmeisthax 3y ago
So, uh... I hate to break it to you, but payment processing is almost as monopolized as mobile app stores are. The fees are not as egregiously high as 30%, but they are still supracompetitive and eat up retailer margins. Payment processing even has similar censorship problems, as evidenced by the campaigns to defund porn companies by cutting them off of payment networks.

the closed gardens of mobile app stores don't have the regular healthy market competition that normal payment processors do. it's one of my least favourite parts of building for mobile

mrweasel 3y ago

I'm just questioning the point in offering a "deal" like this to Spotify, when Spotify can just handle their own payments for less. Is those 4% really worth that much to Google that it's outways the risk of others being made aware of how little payments actually cost Google to run. Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more?

freedomben 3y ago
This clearly wasn't intended to get out, and predicting that Epic would file suit and then it would leak out of the court would be a hard reason to argue against trying to negotiate business in the moment.
agloe_dreams 3y ago
I don't think you understand that over at Apple, not paying the 30% is not being on iPhone..period. Not being on the play store is not being on Android for 90% of customers. This is why both are facing major antitrust cases.
- mrweasel 3y ago
  Aaah, okay, I was under the impression that you could actually be present on the Play Store as a subscription service and just handle your own payments and that would be perfectly acceptable. But that makes the deal even weirder, Spotify doesn't have a choice, yet they have a completely insane deal.
  - agloe_dreams 3y ago
    No Spotify = No Pixel Sales.
- ogreswamp 3y ago
  That is simply not true. You can easily set account creation and payment on your website for "reader apps" if you're not willing to share 30/15% with Apple. (and Spotify & Netflix qualify as reader apps). Apple even allows you to put a link to your website for account creation right in the app (they didn't allow that in the past). https://developer.apple.com/support/reader-apps https://developer.apple.com/support/reader-apps Many companies (like Google) move Apple's subscription fee to end users, so don't feel too pity about them. Just compare YouTube premium cost as an in-app purchase and on the website. €15.99 vs €11.99 here in Ireland. Google had a choice not to offer the YouTube subscription as IAP and just link people to the website. But the conversion rate for IAP is way higher compared to the website link, so they just punish their users, who pay €4 extra every month.
  - willsmith72 3y ago
    Most apps aren't reader apps, that's a very special (and relatively new) rule
    - ogreswamp 3y ago
      You're correct, most of apps aren’t. But the subject app Spotify falls under it.
  - agloe_dreams 3y ago
    Reader apps are an extremely specific clause, mostly related to their Ebook price fixing lawsuit. Zero of the apps in discussion here are reader apps. I should also note, that up until recently, Apple specifically had clauses that you couldn't have the link to the website bit AND they had a 'you can't pass the price onto customers' rule.
    - ogreswamp 3y ago
      Reader apps is quite wide category. It includes pretty much all types of content - ebooks, videos, audio etc. Spotify and Netflix falls under it afaik.
jsnell 3y ago
Netflix currently pay 0%, getting them to agree to 4% sounds like a pretty good deal.
hutzlibu 3y ago
"Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more? " I would suspect, they have a special deal as well.

bushbaba 3y ago

Normal payment processors don’t need to maintain the os ecosystem. Arguably Google needs to do the same work as a traditional payment processor AND much more.

bogwog 3y ago
> Arguably Google needs to do the same work as a traditional payment processor Unarguably, they don't need to do that. They want to, because a monopoly on payment processing makes a lot of money. If 4%/15%/30%/whatever is what Google needs to charge to run their payment processing business, that shows that they're extremely inefficient/incompetent, and the market would be more efficient if other companies were able to offer that service instead. Last I checked, Stripe charges 2.9%, which is even less than what Google charges Spotify in this unicorn deal. EDIT: the same goes for "store infrastructure" or whatever. If Google offered publishers the option to run their own infrastructure for distributing apps/updates/whatever, everyone would take that deal rather than pay Google's nonsense fees.
- freedomben 3y ago
  Even 2.9% (which is what card payment processors charge as well) is ludicrously high. They make a very, very healthy profit margin with that. One of my greatest disappointments about cryptocurrencies is that they didn't destroy that ridiculousness.
  - thallium205 3y ago
    The money largely funds consumer protection products such as when chargebacks have to be executed on fraudulent or other disputed transactions on your card. Zero liability guarantees that the card network infrastructure offers consumers come at a cost which is found here. Think of it as an insurance policy paid on every transaction which explains why it has to be a %. Crypto offers no protections so no fees need to be taken.
- brookst 3y ago
  Characterizing app store fees as purely for payment processing is so disingenuous it's hard to even engage. The reality is these fees are for access to an audience. Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day. Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.

aalimov_ 3y ago

While you may have a point about competition, comparing credit card processors and app stores solely on fee structure doesn’t make for an honest comparison because you get to ignore all the other things they do.

kmeisthax 3y ago

So, uh... I hate to break it to you, but payment processing is almost as monopolized as mobile app stores are. The fees are not as egregiously high as 30%, but they are still supracompetitive and eat up retailer margins. Payment processing even has similar censorship problems, as evidenced by the campaigns to defund porn companies by cutting them off of payment networks.