Apple lets devs in South Korea switch payment providers – with a lot of legwork

A crack in Apple's walled garden appeared yesterday as the iPhone vendor opened up an option for alternative in-app payment processing within apps distributed in South Korea. The commission levied by Apple for in-app transactions, which can be up to 30 percent, has long irked app developers. Epic Games famously went before US …

[KittenHuffer]

So ....

.... instead of paying 30% to Apple you get to do all the coding, deal with any payment issues, and have to provide for auditing as well ...... and all that saves you 4%?!?

Doesn't that mean that Apple are saying that their contribution for doing all of those things is 4%?

So isn't this Apple admitting that they should only be charging 4% for payments that go through them?

Is it possible that SK might come to the same conclusion and tell Apple that they have to lower their cut on payments to 4% instead?

[Kevin Johnston]

Re: So ....

Ah...the Law of Unintended Consequences...

But Mr Apple, we have your data showing these activities are only worth 4%....what are you doing for the other 26%

[NoneSuch]

Re: So ....

Three of my friends have swapped from iPhones to Androids in the last month and had zero regrets from what they told me so far.

It may be a closed garden, but it's not the only garden out there.

[Spazturtle]

Re: So ....

No what Apple are saying is that they charge 26% as the fee for hosting your app on the app store and 4% for processing payments. So even if you use a different payment processor you still need to pay the 26% fee for hosting your app on Apple's servers.

[localzuk]

Re: So ....

Those are some expensive hosting servers!

[NoneSuch]

Re: So ....

"Those are some expensive hosting servers!"

The hardware is bog standard. It's the Apple logo made of pure Unobtanium that costs the big bucks.

[JimboSmith]

Re: So ....

The hardware is bog standard. It's the Apple logo made of pure Unobtanium that costs the big bucks.

Not sure why you needed the joke icon there.

[jmch]

Re: So ....

And another payment provider will undoubtedly take around 3%, that is what eg Visa and Mastercard charge.

It's actually surely deliberate from Apple to position their 30% cut as 26% hosting and 4% payment processing. In reality it's more like 4% hosting, 3% or less payment processing, minimum 23% rent-seeking/bloodsucking

[Falmari]

Re: So ....

@Spazturtle "No what Apple are saying is that they charge 26% as the fee for hosting your app on the app"

No it is not a fee for hosting it is a 26% sales commission. It is a sales commission as the fee is a percentage of the app price and charged per app sold. If it was a hosting fee it would be a fixed price.

Or are you telling us that doubling the price of an app will increases Apple's costs to host it, let alone double Apple's cost.

Or selling twice as many of an app as the month before doubles Apple's costs to host it.

[Falmari]

Re: So ....

From Apple's site

"Apps that are granted an entitlement to use a third-party in-app payment provider will pay Apple a commission on transactions. Apple will charge a 26% commission on the price paid by the user, gross of any value-added taxes. "

Even Apple call it a commission. It not a 26% hosting fee it is a 26% sales commission.

[Potemkine!]

Would anyone have any compassion for Apple, whose financial situation is so dramatic? In Q1/22, Apple reported a net income of $34.63 billion, with gross margins increasing to approximately 43.8 percent. What a pity!

[VoiceOfTruth]

26%

Now that's greed for you. I hope that South Korea punishes Apple, really punishes it.

[heyrick]

"We're shocked. Shocked."

Last night to waste some time I was watching random videos on YouTube. One of them was an inspector of newly built homes. Pretty much every single sentence ended with "it's absolutely shocking" (and it was, fair enough).

So Apple dump all of the payment issues in your lap, expect you to account for all sales, and then try to change nearly what they were charging before? It's absolutely shocking.

[gnasher729]

So as a company I have to protect myself against piracy, and as a customer ill have to fight the app provider for refunds? Curious what will happen if a five year old runs up a thousand pound bill for in-app purchases.