Pixel Envy

Written by Nick Heer.

Apple’s Rules for External Payment Mechanisms in iOS Apps

After millions of Euros in fines for its delinquency, Apple has announced its rules for developers of dating apps who wish to use external payment mechanisms in the Netherlands. While ostensibly straightforward, they are not easy to comply with, but likely form a template for other circumstances where apps will be permitted to use non-IAP mechanisms.

Developers are required to apply for the entitlement allowing them to use a non-Apple payment flow. This includes fields for the payment processor’s information. Apple says developers must “demonstrate that your PSP meets the criteria of having a secure payment processing system and an established track record of protecting user privacy”. Apple lists several other privacy and security requirements for payment processors. Then, in the separate app binary developers must produce solely for the Dutch App Store, they must also include a message which “must exactly match” the following (shown in English and Dutch on Apple’s website; I am only quoting the English here):

Title: This app does not support the App Store’s private and secure payment system

Body: All purchases in the <App Name> app will be managed by the developer “<Developer Name>.” Your stored App Store payment method and related features, such as subscription management and refund requests, will not be available. Only purchases through the App Store are secured by Apple.

Learn More

Action 1: Continue

Action 2: Cancel

Just look at the striking twist in language here. The title and final sentence the body text literally say that the app’s payment mechanism is different from Apple’s, and that Apple’s is “private and secure”. But it implies the payment standard used by the developer is less private and has inferior security to Apple’s own — even though Apple requires all developers to use a private and secure payment processor. Apple is selling asbestos-free cereal, while requiring all other cereals to be asbestos-free but not allowing them to label themselves as such.

I wonder how Dutch regulators will feel about that.

Apple also says that it is entitled to a commission of 27% on all sales, which is about what I expected. The App Store commission is not solely a payment processing fee and never has been. It is a profit margin for Apple, plain and simple. I am not for a moment arguing that this is a good thing or that it is acceptable, but I do not think developers should hope for a dramatically different commission unless lawmakers intervene.

Update: If I am reading this right, Apple’s 27% commission does not appear to differ for third-party subscriptions after the first year, while subscriptions sold through the App Store drop to a 15% commission.