Apple's Proposal to Allow Third-Party Payment Methods in App Store 'Lacks Detail,' Says South Korean Regulatory Commission

[MacRumors]

Apple's plans to allow developers to use third-party alternative payments methods within their apps in South Korea "lacks concrete detail," according to South Korea's Communications Commission (KCC).

In August, South Korea passed a law that bans app store operators from requiring developers to use their in-app purchase systems. Last month, Apple submitted its compliance plans to the KCC that would allow apps in Apple's South Korean App Store to use third-party payment methods within their apps. Apple's plans include that the company will still take a commission for all purchases made, even those made with third-party alternative payment methods, but specific details were not shared.

Now, ahead of the law being finalized and enacted, South Korea's KCC says Apple's submitted plan "lacks concrete detail," reports Reuters. KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods, arguing that such a commission will entice developers to stay with the app stores' respective, default payment process.

"As a result of any policy, if app developers find it realistically difficult to use an alternative payment system and resort to using the dominant app store operator's payment system, it would not fit the law's purpose," the official said, adding that this stance would likely be reflected in the final ordinance."

A similar series of events have taken place in The Netherlands, one of several countries looking into Apple's App Store. Dating apps in The Netherlands will soon be allowed to use third-party alternative payment methods. Apple's plans to comply with the law in The Netherlands have been criticized for being inadequate in addressing concerns, leading to a fine of 5 million euros per week up to a maximum of 50 million euros until Apple complies.

"We look forward to working with the KCC and our developer community on a solution that benefits our Korean users," Apple had previously said in a statement about the law in South Korea. "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," the company added.

Article Link: Apple's Proposal to Allow Third-Party Payment Methods in App Store 'Lacks Detail,' Says South Korean Regulatory Commission

 

[Michael Scrip]

Google has already stated how they will handle commissions in South Korea:

15% if you use the Google Play Store payment system
11% if you use another payment system

I'm guessing Apple will do something similar.

But you may be saying "that's only 4% less... once the developer pays for outside payment processing... it'll be roughly the same as if Google handled it all!"

That's true! So maybe instead of arguing about

"alternative payment systems"

developers should have been begging for

"lower commission fees"

Because guess what... payment fees are pretty standard nowadays. 3% to 4%

But it's the platform commission fees were always the bulk of what developers paid.

No one ever talked about it because it was all rolled into one flat fee.

But now that we can separate platform fees and payment fees... I guess people will start arguing about commission fees next!

 

[neuropsychguy]

“KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods.”

There ain't no such thing as a free lunch. If the commission fees are banned, the companies will make it up elsewhere.

 

[macar00n]

If they're going to act like this, then they should have the iPhone and its app store taken away. Imagine telling a physical store that you want to put your products on its shelves for free, want your own payment method added to their checkout for free, and dictate the exact terms of how they are sold. South Korean lawmakers are completely out of touch, and would be straightened out by their citizens in about ten minutes if Apple threatened to pull out of the country.

 

[AndiG]

Google has already stated how they will handle commissions in South Korea:

15% if you use the Google Play Store payment system
11% if you use another payment system

I'm guessing Apple will do something similar.

But you may be saying "that's only 4% less... once the developer pays for outside payment processing... it'll be roughly the same as if Google handled it all!"

That's true! So maybe instead of arguing about

"alternative payment systems"

developers should have been begging for

"lower commission fees"

Because guess what... payment fees are pretty standard nowadays. 3% to 4%

But it's the platform commission fees were always the bulk of what developers paid.

No one ever talked about it because it was all rolled into one flat fee.

But now that we can separate platform fees and payment fees... I guess people will start arguing about commission fees next!

Guess that is the point. Apple has never declared how it is going to control bank transfers and collect fees. What is the difference between using a locally implemented in app payment and a payment on a website? What if the app invokes a website for payment? What if the app displays the website in an integrated browser within the app?

Guess Apple is simply not allowed to control transfers of money? Why doesn't Microsoft charge me, when I use internet banking using Microsofts edge browser on Windows?

Apples proposal is simply rediculous. Will Apple charge me for any bank transfer that is done using macOS? What if I buy a movie on AmazonPrime using macOS? What if I use iPadOS? Does it make a difference if I use an App or the browser?

Lots of questions.

They got very greedy ...

 

[MilaM]

History likes to repeat itself, they say. Let's see how it turns out this time.

 

[metapunk2077fail]

Apples proposal is simply rediculous. Will Apple charge me for any bank transfer that is done using macOS? What if I buy a movie on AmazonPrime using macOS? What if I use iPadOS? Does it make a difference if I use an App or the browser?

Lots of questions.

They got very greedy ...

Your theory is not reflective of reality and some of the things you say above are outlandish. It is Apple's OS and the onus is on them to protect their operating system and users. Apple is not charging you to make bank transfers on macOS or iOS.

If you purchase anything on an e-commerce platform like eBay or Amazon, Apple isn't making a cent. They have no intention or plan to make money out of apps that you mention.

 

[DelayedGratificationGene]

“Ok Epic here is your commission invoice for your 3rd party payment transactions”….”what?”…”wait!”…”so now it’s costing me to have a 3rd party payment system PLUS I still have to pay you guys commission for your awesome platform?!”…”man this is going all the wrong way!”……hmmm I should have thought this out better

 

[DelayedGratificationGene]

It’s absurd to think Apple will never be allowed to charge a commission with or without payment options. If that happened then every platform from Walmart to PlayStation would never make money and be forced out of business. Stop even questioning the commission aspect because it’s NOT going away.

 

[I7guy]

History likes to repeat itself, they say. Let's see how it turns out this time.

I know....coming from the originator of 30% fee.

 

[AppleTO]

Makes sense… I mean it’s still their platform the devs are selling on.

 

[DelayedGratificationGene]

Walmart…”yes of course it’s free to stack your product anywhere in our store!”…we will pay for all your security, space and all your needs free of charge!!

 

[DelayedGratificationGene]

The no commission rhetoric nonsense needs to just stop already. It’s ridiculous to even think Apple or any other company would not be allowed to charge for services provided. The whole economy is based on that lol!!

 

[incoherent_1]

"I think it's ridiculous that my grocery store is able to make a profit on selling me groceries. All they do is order the product, manage the inventory, pay for real estate, pay for upkeeping and staffing, and manage returns and disputes, among other things. We should pass a law allowing the farmers to offer me a payment processing option that cuts the store out of the loop so I can pay wholesale prices while using all the services associated with shopping in their store."
- Whoever wrote this Korean law, I can only assume

 

[Wildkraut]

“KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods.”

There ain't no such thing as a free lunch. If the commission fees are banned, the companies will make it up elsewhere.

Well, their country their rules and their laws, Apple can always leave if they want to.
Isn't that what it's used to be said here?! Apple should leave blah blah blah...

Anyway, in this case Apple should prepare to leave more countries, the whole EU, and probably even the U.S.
In my opinion, it's about time for them to enter the space exploration business, the spaceship they built can't take off.

 

[huge_apple_fangirl]

Apple will do everything it can to follow the letter but not the spirit of the law. Regulators better get smarter.

 

[vipergts2207]

History likes to repeat itself, they say. Let's see how it turns out this time.

I can't help but think of those comments with respect to the iPhone. So many key people that were at Apple for the iPhone development and launch are no longer there. Jobs, Forstall, Schiller, Ive, Fadell and probably many others. The Watch is really the only major product category Apple has entered during the Cook era. It will be interesting to see if Apple has the same level of success they've typically enjoyed when they launch their AR/VR hardware. They're becoming a services company more and more as time goes on, but the reason people fell in love with Apple in the first place was for their wonderful hardware and software.

 

[ksec]

Apple. Listen to Macrumors' comment, Have the Courage to Pull out of the South Korean Market !

 

[ksec]

“KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods.”

There ain't no such thing as a free lunch. If the commission fees are banned, the companies will make it up elsewhere.

Apple can certainly rise the price of iPhone in those market to make it up. At least that is one way of going about it.

 

[Wildkraut]

I can't help but think of those comments with respect to the iPhone. So many key people that were at Apple for the iPhone development and launch are no longer there. Jobs, Forstall, Schiller, Ive, Fadell and probably many others. The Watch is really the only major product category Apple has entered during the Cook era. It will be interesting to see if Apple has the same level of success they've typically enjoyed when they launch their AR/VR hardware. They're becoming a services company more and more as time goes on, but the reason people fell in love with Apple in the first place was for their wonderful hardware and software.

In my opinion Apples AR/VR will overall fail.
They will sell a few units, no question, but there is no mass demand for it, just like 3DTVs.
For VR there is a niche/geeky demand, AAA 3D Games, but AAA Games(ROFL) is not one Apples strongest business area, they simply suck at this. Apple Arcade proves it all.

 

[now i see it]

Billions and billions and billions and billions of dollars are ultimately at stake. Not just for Korea, but the global App Store. Whatever happens here will set a precedent and blueprint for the rest of the world. Anyone who thinks Apple is just going to roll over and take it — Think again.

 

[Wildkraut]

Billions and billions and billions and billions of dollars are ultimately at stake. Not just for Korea, but the global App Store. Whatever happens here will set a precedent and blueprint for the rest of the world. Anyone who thinks Apple is just going to roll over and take it — Think again.

That's true and Apple will try to use all anticompetitive practices they have backed up in their drawer, but they will have to bend over. The only winners will be Tim & Co. if they don't get sued at civil level for some kind of corruption.

 

[Cosmosent]

NO surprise there, yesterday, I read the four-page document that describes the $100M USD settlement that Apple recently agreed to with OTHER App Developers, & it has really NO detail at ALL !

How that one got Agreed to by those OTHER App Developers is puzzling !

BTW, for that agreement, I discovered the Lawyers get $33M USD of the $100M USD total; & Apple says that's OK "in the document".

 

[Cosmosent]

That's true and Apple will try to use all anticompetitive practices they have backed up in their drawer, but they will have to bend over. The only winners will be Tim & Co. if they don't get sued at civil level for some kind of corruption.

ALL that's needed is ONE or TWO Prime Examples of Apple suppressing third-party App Innovation for their own benefit, AND, importantly, the General Public finding-out that they've missed-out on something important AND/OR special because of that.

When that happens, Apple will have a day like FB/META is having today.

Apple's 52-week Low is $116 USD, so hitting ~$130 USD or so is very possible.

 

[macar00n]

Imagine feeling this entitled to something you didn't build, and that there are alternatives for. You want other payment methods South Korea? Use Android which already exists, or better yet, build your own phone with its own OS and app store. Oh, you won't because predictably it would be a trash product with barely any exposure that nobody would want to use? I guess therein lies the value of Apple's app store. A safety component of which is not accepting payment through outside platforms that could reflect poorly upon Apple.

"We want to take something of value from you for free, but we don't want to pay you a reasonable cut in exchange."
Apple should tell these moron lawmakers to pound sand, and threaten to pull out of the country until they get it together a little bit