In response to the Supreme Court declining to hear its case with Epic, Apple has opened up the U.S. App Store to third-party payment options, as it has in select situations around the world in response to regulation in various markets.
Like in other places around the world, Apple has pretty tight restrictions on how links to external payment systems can look, and what a user will encounter on their way out to the web. That includes this screen, which is really something:
These changes are outlined in Section 3.1.1(a) of the App Store Review Guidelines, which points to the StoreKit External Purchase Link Entitlement (US), which developers can request from Apple.
In her piece on MacRumors, Julie Clover includes a list of key points about Entitlement Links that cover things like where developers are allowed to place their single outbound link on a single screen of their app. That page cannot be “an interstitial, modal or pop-up” and the link cannot be “displayed on any page that is part of an in-app flow to merchandise or initiate a purchase using in-app purchase.”
Apple wants users to be informed when they are leaving the bounds of the App Store and its protections, which is fair, but I think Apple’s restrictions give too little credit to consumers and too little trust to developers.
Purchases made outside of those bounds still have a percentage that will wind up back with Apple. Here’s more from the developer site:
Apple’s commission will be 27% on proceeds you earn from sales (“transactions“) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app. This includes (a) any applicable taxes and (b) any adjustments for refunds, reversals and chargebacks. For auto-renewing subscriptions, (i) a sale initiated, including with a free trial or offer, within seven days after a link out is a transaction; and (ii) each subsequent auto-renewal after the subscription is initiated is also a transaction.
If you’re a participant in the Small Business Program, or if the transaction is an auto-renewal in the second year or later of an auto-renewing subscription, the commission will be 12%.
It is up to developers to collect those commission dollars and pay them to Apple:
These commission rates apply to all amounts paid by each user net of transaction taxes charged by you. You will be responsible for the collection and remittance of any applicable taxes for sales processed by a third-party payment provider.
If you adopt this entitlement, you will be required to provide transaction reports within 15 calendar days following the end of each calendar month. Even if there were no transactions, you’re required to provide a report stating that is the case.
If Apple builds an API to automate some of this reporting, developers will have to adopt it within 30 days, and the company reserves the right to review those reports, telling developers that it can audit “the accuracy of your record of digital transactions, ensuring the appropriate commission has been paid to Apple.”
On the customer support front, things seem fair to both Apple and developers:
If you use this entitlement, it will be your responsibility to provide timely support to customers if questions or issues arise with payments that take place outside of the App Store. Apple will not be able to assist customers with refunds, purchase history, subscription management, and other issues encountered when purchasing digital goods and services. You will be responsible for addressing such issues with customers.
Like I said, these restrictions are not new; they are just new to the U.S. market, meaning many customers may comes across them for the first time, if developers are willing to use a payment option beyond Apple’s. As important as App Store revenue is to Apple, it’s not surprising how restrictive this all seems, as John Gruber writes:
I’ve said it before, I’ll say it again now, and I’m sure I’ll have to say it again in the future: Apple’s 30/15 percent commissions from App Store purchases and subscriptions are not payment processing fees. They include payment processing fees, but most of those commissions are, in Apple’s view, their way of monetizing their intellectual property. And they see the entire iOS platform as their IP.
So developers who want to process payments on their own websites are still on the hook to pay Apple the same effective commissions, minus only 3 percent for the actual payment processing. And the truth is most of the time credit card processing costs more than 3 percent overall, after chargebacks and fraud are taken into consideration. Do more work and save no money — sounds appealing, no?