Apple to Allow Alternative Payment Systems in App Store in South Korea

[MacRumors]

Apple will let App Store developers offer alternative payment systems in South Korea after the country passed a law that bans app store operators from requiring developers to use their own in-app purchase systems, reports The Korea Herald.

Apple still plans to charge a reduced fee on purchases made through alternative payment systems, according to plans the company submitted to the Korea Communications Commission. Apple did not indicate when the new policy will take effect or what its commission structure will be for alternative payments, the report said.

"We look forward to working with the KCC and our developer community on a solution that benefits our Korean users," Apple said in a statement shared with The Korea Herald. "Apple has a great deal of respect for Korea's laws and a strong history of collaboration with the country's talented app developers. Our work will always be guided by keeping the App Store a safe and trusted place for our users to download the apps they love."

In November, Google announced it would also let developers offer alternative in-app billing systems in its Play Store in South Korea, and said it would reduce its fee for alternative payment systems by four percentage points. For the "vast majority" of developers, Google said its fee would drop from 15% for transactions through Google Play's billing system to 11% for transactions through an alternate billing system.

Article Link: Apple to Allow Alternative Payment Systems in App Store in South Korea

 

[Realityck]

Well things change, back in Oct Apple suggested they already adhered to this new law, now they are fully complying with it.

 

[kuwxman]

😆

Won't happen here in the US anytime though. Apple pays Congress too well.

 

[dguisinger]

I'll say it again

In-app purchases of stuff you are not a man-in-the-middle distributor of, and you aren't doing the payment processing anymore. What entitles you to ANY money?

Walmart only gets the initial magazine purchase, not a cut of the subscription made from the included postcard.
Target only gets the initial iPhone sale, not a part of your app purchases or your Apple Fitness subscription fees.

Why should digital be any different? Its still a mob shakedown. Nice app you've got there, it would be a real shame if something happened to it.

 

[_Spinn_]

Apple still plans to charge a reduced fee on purchases made through alternative payment systems, according to plans the company submitted to the Korea Communications Commission.

In November, Google announced it would also let developers offer alternative in-app billing systems in its Play Store in South Korea, and said it would reduce its fee for alternative payment systems by four percentage points. For the "vast majority" of developers, Google said its fee would drop from 15% for transactions through Google Play's billing system to 11% for transactions through an alternate billing system.

How will this work? Apple and Google aren't processing the payments so how would they know how their reduced cut should be? Do developers have to report their third-party payments to Apple and Google's version of the IRS? Or are they both still acting as a middle-man between the consumer and third-party payment system?

 

[senttoschool]

How will this work? Apple and Google aren't processing the payments so how would they know how their reduced cut should be? Do developers have to report their third-party payments to Apple and Google's version of the IRS? Or are they both still acting as a middle-man between the consumer and third-party payment system?

Auditing.

It'll cost Apple resources to do auditing of apps. And it'll be more costly for developers to use an alternative payment because they have to spend resources to keep track of how much they earn and pay Apple by check or bank deposit.

If my app is making decent money, I'd never cheat Apple out of the commission because they can take my app offline anytime. That's way too risky.

If I'm an iOS developer, I'd never use a 3rd party payment system for this reason alone. Too much hassle.

Basically, allowing 3rd party payment systems don't help developer save money. The only things that would help are side loading, alternative app stores, or laws governing commission fees for app stores.

 

[huge_apple_fangirl]

Oh wow.
First cracks starting to appear in the garden walls. Only a matter of time before the EU follows suit.

 

[FlyingDutch]

This is happening worldwide, sooner or later… Apple has to give up on this.
I’m not sure it is completely right (the service is provided by Apple), but at this point there is no alternative.

 

[mrochester]

I'll say it again

In-app purchases of stuff you are not a man-in-the-middle distributor of, and you aren't doing the payment processing anymore. What entitles you to ANY money?

Walmart only gets the initial magazine purchase, not a cut of the subscription made from the included postcard.
Target only gets the initial iPhone sale, not a part of your app purchases or your Apple Fitness subscription fees.

Why should digital be any different? Its still a mob shakedown. Nice app you've got there, it would be a real shame if something happened to it.

Walmart makes a profit selling the magazine.

When someone downloads a free app and purchases in-app subscription, Apple has made no profit unless they charge a commission for the in-app purchase.

 

[Havoc035]

Well things change, back in Oct Apple suggested they already adhered to this new law, now they are fully complying with it.

Interesting change indeed. Maybe it’s a PR move as their first reaction could easily be seen as disrespectful to the Korean government and law. Anyway this is exactly the outcome they were going to get. Choose your payment system but you still owe us fees. I think it’s justified given the service and tools Apple provides to developers.

 

[apparatchik]

I'll say it again

In-app purchases of stuff you are not a man-in-the-middle distributor of, and you aren't doing the payment processing anymore. What entitles you to ANY money?

Walmart only gets the initial magazine purchase, not a cut of the subscription made from the included postcard.
Target only gets the initial iPhone sale, not a part of your app purchases or your Apple Fitness subscription fees.

Why should digital be any different? Its still a mob shakedown. Nice app you've got there, it would be a real shame if something happened to it.

As someone mentioned above me, the vast majority of Apps nowdays are free to download, so in your analogy is like the magazines -or whatever other product- being free at Walmart. Apple accounts for the hosting and operation of the store -Apple Connect, app review, payment processing, iOS update and development, Xcode- in part by charging a commission on in-app sales.

 

[Ritmo]

Walmart makes a profit selling the magazine.

When someone downloads a free app and purchases in-app subscription, Apple has made no profit unless they charge a commission for the in-app purchase.

Apple makes profit selling the devices and its own services. They could also improve the in-app payments so that developers would choose them over the alternatives.

 

[mrochester]

Apple makes profit selling the devices and its own services. They could also improve the in-app payments so that developers would choose them over the alternatives.

Yes the service Apple are looking to profit from here is the app-store.

Apple will make a profit regardless of whether a developer uses Apple’s in-app payment system or someone else’s as the developer is still using the Apple App Store in that transaction.

 

[DelayedGratificationGene]

Yes I wonder what action Apple will
implement to collect fees from developers for the customers that use the alternative payment system? A separate invoice perhaps? Either way Apple is going to get paid.

 

[dwaite]

Apple makes profit selling the devices and its own services. They could also improve the in-app payments so that developers would choose them over the alternatives.

Walmart makes profit off of selling clothes and televisions. They could also improve the in-store checkout so that magazine publishers would choose them over the alternatives.

 

[Havoc035]

Yes I wonder what action Apple will
implement to collect fees from developers for the customers that use the alternative payment system? A separate invoice perhaps? Either way Apple is going to get paid.

Apple is going to make sure it gets paid, politicians will complain because that was not what they intended and we’ll see new legislation attempts. It’s all very predictable.

 

[mrochester]

Apple is going to make sure it gets paid, politicians will complain because that was not what they intended and we’ll see new legislation attempts. It’s all very predictable.

If politicians want control of App Stores, why not just nationalise them?

 

[Ritmo]

Walmart makes profit off of selling clothes and televisions. They could also improve the in-store checkout so that magazine publishers would choose them over the alternatives.

Oh yes, because the publishers have to use only the paper and ink made by Walmart. And sometimes, you can't print your draft, because somebody forgot to turn on the lights at Walmart.

 

[mrochester]

Oh yes, because the publishers have to use only the paper and ink made by Walmart. And sometimes, you can't print your draft, because somebody forgot to turn on the lights at Walmart.

Luckily the publishers can choose to use Walmart’s paper or Target’s paper. They just need to use Walmart’s paper for Walmart’s store and Target’s paper for Target’s store.

 

[metapunk2077fail]

This is happening worldwide, sooner or later… Apple has to give up on this.
I’m not sure it is completely right (the service is provided by Apple), but at this point there is no alternative.

This is what's going to happen in many cases, especially if the third party app stores were forced on to phones.

Scenario A:

Some app requests payment for a Subscription.

The developers take payment from X amount of users and disappear after a month.

Users find it very hard to get a refund because third party payment providers can be unreliable.

People eventually find out that these rogue apps were funding terrorism or a fascist political movement.

Scenario B:

Some app requests payment.

User pays but app isn't activated. Still in demo mode.

App requests that user call Tech Support.

Tech Support happens to be a scam crew targeting children or elderly people.

If you're smart the follow conversation happens but you'll still never get a refund.

 

[Jim Lahey]

Daily reminder. Apple will always do whatever is necessary in order to operate in any market in which it wishes to do business. Worth remembering the next time you read something about them not kowtowing to state demands. Photo library surveillance mission creep etc.

 

[koil]

I'll say it again

In-app purchases of stuff you are not a man-in-the-middle distributor of, and you aren't doing the payment processing anymore. What entitles you to ANY money?

Walmart only gets the initial magazine purchase, not a cut of the subscription made from the included postcard.
Target only gets the initial iPhone sale, not a part of your app purchases or your Apple Fitness subscription fees.

Why should digital be any different? Its still a mob shakedown. Nice app you've got there, it would be a real shame if something happened to it.

Completely agree. Apple should charge developers the actual costs associated with their apps life on their marketplace. Charge them for update audits, charge them for bandwidth, maybe optionally charge them for downloads stemming from Apples marketing if they opt in, but you can't place a flat fee on monetary transactions. Taking a flat fee like this is basically racketeering.

 

[mrochester]

Completely agree. Apple should charge developers the actual costs associated with their apps life on their marketplace. Charge them for update audits, charge them for bandwidth, maybe optionally charge them for downloads stemming from Apples marketing if they opt in, but you can't place a flat fee on monetary transactions. Taking a flat fee like this is basically racketeering.

The cost of administration has to be taken into account. You can’t add more bureaucracy into a process and expect prices to stay the same or go down. Look at Brexit as an example of this.

 

[AppleChainLink]

This is a big opportunity for Google to strike first, and reinvent the phone App Store payment policies.

 

[koil]

The cost of administration has to be taken into account. You can’t add more bureaucracy into a process and expect prices to stay the same or go down. Look at Brexit as an example of this.

Agreed, additional costs will surface as a result, but the total cost for a developer will go down significantly because the current method of payment has always been egregiously large compared to Apples internal costs for these things.