New regulations in the Netherlands have led Apple to offer dating apps the ability to process payments without using the App Store payment system. Now, the Cupertino company has given more details about the reduced commissions it will apply to apps that prefer not to use Apple systems.
Fees that exclude payment processing fees
Let’s go back a bit in time and add some context. A certain investigation in the Netherlands ended up crystallizing a law by which the Apple App Store should allow dating apps, but no other, the possibility of using alternative payment gateways to the App Store.
Apple announced a few weeks ago that the developers of these applications could use these alternative payment methods, after verifying that the eligibility requirements were met. In this announcement, Apple has already hinted that it will continue to charge a commission to these developers.
Currently, Apple operates a 30% or 15% commission structure. If a developer charges less than a million dollars per year, he can ask for a 15% commission, after the million the commission becomes 30%. In recurring subscriptions, even if an application exceeds $1 million in annual profit, the subscription drops from the initial 30% to 15% if the subscriber has been subscribed to the service for one year. If Dutch developers want to use external payment gateways, the commission will be 27%.
The 30% commission has never been exclusively related to payment processing, it mainly has to do with Apple’s intellectual property.
With this system, developers will be able to offer a link in their own apps for users to make payment on the web, without necessarily having to use the App Store payment process. But why 27%? This question has a two-part answer.
The first and most important is that the 30% commission has never been exclusively tied to payment processing. It has to do with Apple’s intellectual property and its huge investment in R&D and development of operating systems, APIs, and development environments that allow developers to build their apps. As the judge has already said in the case against Epic, Apple has every right to recoup this investment.
The second is that payment processing has a cost. Thus, 27% is the result of subtracting “fees for payment processing and related activities” from the 30% commission, such as technical assistance with declarations, issuance of invoices, etc. This 3% is what developers can choose to avoid if they prefer to set up their own payment gateway or use alternatives outside of the App Store system.
It is true that for the moment the case of the Netherlands is very localized geographically, but it undoubtedly creates a precedent that we could well see applied in other regions. Regions like South Korea, where a regulation may cause Apple to take a similar step. For now we will be waiting for the evolution of events.