In-app purchases are a type of payment system that allows users to buy digital goods or services within an app. This can include anything from premium content to extra lives in a game. In-app purchases are typically made through a credit card or other payment platform. Many developers offer in-app purchases as a way to generate additional revenue, while some apps are entirely based on this model. In-app purchases have become increasingly popular in recent years, as they offer a convenient and easy way for users to get the content they want. However, there has been some controversy surrounding in-app purchases, as some feel that they are unfair or misleading. Developers must be transparent about what is being offered for sale, and users should be aware of the potential costs before making any purchase.
Apple will now permit developers in South Korea to offer third party payment systems for in-app purchases, the first opportunity worldwide, but that opportunity doesn’t come without potential drawbacks. Nadeem Sarwar reports in Digital Trends:
“It sounds good on paper, but the road ahead for developers is far from rosy, and almost sounds like a bunch of punitive conditions for putting cracks in its walled garden. But there’s more to this forced change of heart than it appears.”
The move to allow third party payments likely will not reduce fees and in some cases will actually bring smaller developer costs to be in-line with the higher commissions for flagship developers who will only get a marginal savings in commission:
“If you are a small developer, it makes more sense to pay a 15% tax by sticking to Apple’s own payment system with the App Store Small Business Program, rather than skirt around the App Store tax and pay a higher 26% fee. For developers in South Korea, a reduction in App Store tax from 30% to 26% won’t make much of a difference, unless they play at a global scale with a massive user base.”
The small savings for flagship developers comes with additional drawbacks as consumers will be presented with messaging that payments would be made outside of Apple’s environment, relieving Apple of any responsibility for additional protection they currently support for fraud protection, indemnity, and other related services. In addition users would be required to enter payment information each time they make a purchase.
“It’s both cumbersome for the user, and an effective scare tactic, especially for users who come to Apple’s ecosystem for its safety and convenience. Such a setup poses a tangible risk of user exodus, which is something developers should be extremely concerned about. There are always rivals ready to pounce on the opportunity by offering what users seek.”
These changes represent a slight opening of Apple’s in-app payment infrastructure, one that could be repeated if legal efforts fail in the U.S. or Europe, but also give an indication of the complexity that will be presented to compensate for the additional development.