South Korea will be the first country to force Apple and Google to offer alternative payments in the App Store and Play Store due to recently approved law

South Korea has passed a law that says app stores will not be able to force apps sold to them to use a specific payment method. Legislation that mainly affects Apple and Google, which will experience significant changes in the App Store and the Google Play Store.

Without standard payment gateway

For several weeks now, we have been closely following the bill that South Korea was preparing so that app stores do not define which payment method to use within them. After several delays, the country has today given the green light to this law, becoming the first to experiment with the possibility of offering alternative payment methods in app stores.

The new legislation is, in effect, an amendment to the current Telecommunications Carriers Act, which aims to ensure that app store owners “do not force a mobile content provider, etc., to use a mode of specific payment “.

With this move, apps will be able to opt out of paying the 15% commission Apple applies to transactions. 15% which includes the processing of card payments, security, confidentiality, management of returns and technical support, as well as all the management of taxes and fees that companies must pay for each sale or subscription. It will therefore be up to developers to decide whether it is more rewarding for them to take advantage of the service offered by Apple or to set up or rent their own payment management infrastructure.

Now, it will be the developers who will decide whether they want to use Apple’s payment method, and the users whether to trust the developers who don’t.

This is where the size of the company or development studio behind each application comes in. Apps like Netflix or Spotify, for example, have sufficient capacity to handle such a system and will likely benefit from this law. From there, small studios can be harmed by the consequent establishment of a two-tier App Store, where the bigger ones have advantages over the smaller ones.

In this area, the reputation of each entity is also taken into account, because by not using a unified payment platform, managed by a single company in which we trust, it is we, the customers, who must decide. whether or not to entrust our payment data to a specific application. For practicality, this means that we will have to think twice before subscribing to a service, researching the reputation of the developer, reading reviews and making an informed decision without the guarantee offered by an entity that acts as an intermediary and that, if something happens, we will return the amount of a purchase easily.

It is clear that the move in South Korea will be carefully studied by other countries that come up with similar legislation. In the end, this case will be a kind of experiment to see whether in the long term the application economy benefits from such a movement because of greater competitiveness, as some sectors claim, or on the contrary, it is penalized in seeing that customers don’t trust your payment information as lightly as expected.

We have reached out to Apple to find out their official position and will update if we get a response.

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