[MBCook]

At this point I think I’d like to see Apple allow a form of third-party payment. It works well enough on the web without tons of scams, it could be done on the iPhone.

Let developers choose between any “certified“ payment provider. Apple would be one, and then you could add Square, PayPal, and other big companies that could jump through Apple’s hoops. Like making sure the refund experience is easy so no one can make really convoluted anti-user workflows.

Maybe app purchase still has to go through Apple, it’s only IAPs that can go through anyone.

Apple, naturally, would be forced to lower their cut because otherwise why would anyone choose them?

I’d be happy to choose them as a user over other payment providers if given a choice. I like the current payment experience on iOS.

Apple can even keep all their crazy rules like Marco is talking about. It’s just the other payment providers wouldn’t have to follow them. Let Apple see how well that goes.

Anyone can take payments, using any big provider, for anything on iOS. Seems easy enough.

I don’t think it’ll ever happen without government intervention though.

[gok]

> It works well enough on the web without tons of scams

What web have you been using?

[jasonlotito]

The one where I can charge back any fraudulent charge with ease. I know how to do that without thinking about it. I've logged into Apple twice now and neither account areas provide a place for me to cancel subscriptions.

[codetrotter]

> I've logged into Apple twice now and neither account areas provide a place for me to cancel subscriptions.

You mean like so?

https://support.apple.com/en-us/HT202039

I agree that it is weirdly convoluted, but I don’t see what you mean about there being no place to cancel subscriptions.

But perhaps you were talking about something else and I misunderstood?

[shuckles]

This is only true in the United States if you are paying with a credit card.

[scarface74]

It doesn’t need to be that complicated. Scrap IAP entirely and just consolidate everything with Apple Pay in the countries where it is available. Apple Pay has standard credit card processing fees that aren’t much higher than any other credit card processor. Then force every company to offer Apple Pay without these crazy rules.

Most companies already have the facilities to accept credit cards. For those that don’t, Apple could also be the merchant account.

[microtherion]

Apple does not charge the fees just for the payment processing.

Ultimately, Apple would like to earn money from the products they make. There are a variety of models to do so:

* You can sell the hardware, sell OS upgrades, and let third parties sell apps without taking a cut. This was the original Mac model.

* You can sell the hardware, give away OS upgrades, and privilege third party developers who give you a cut, while preserving a way to side load. This is the current Mac model.

* You can sell the hardware, give away OS upgrades, and take a cut from third party apps. This is the current iOS model.

* You largely let others build and sell the hardware, give away OS upgrades, take a voluntary cut from developers, and sell or monetize the user's data. This is the Android model.

* You give away the hardware and OS upgrades and live off venture capital. This is a popular startup model.

Each of these is viable to some extent. None is 100% popular with customers.

But what some people seem to be asking for is "Gilette, but give away razors and adopt an open standard for the razor blades".

[scarface74]

I didn’t say that Apple does just make money from payment processing I said they could. There are dozens of payment processors that make money just by being credit card processors. It would make things a lot simpler and they could get a cut of payments that they can’t get right now from companies that won’t do in app purchases through the App Store. Netflix and Spotify were consistently two of the “top paid” apps when they had in app subscriptions. Now Apple doesn’t get anything from them.

They could even charge slightly higher fees than most credit card companies just like AmEx does. They have the infrastructure in place via Apple Pay.

Since Apple Pay already supports the industry standard Web Payments API. They could convince more companies to accept Apple Pay on the web without being “locked in” to Apple Pay since if you implemented the payments API, it would also work on Android with Android Pay.

Apple Pay is an open standard that integrates with your standard credit card processing flow.

[staticman2]

This has to do with Apple using Mafia style tactics to demand 30% of all economic activity. It has nothing to do with payment processors as such.

[LexGray]

But what percentage would developers consider appropriate? Apple works partially as a consumer advocate in this space preventing many shady practices through their draconian rules. There is definitely value preventing developers from innovating over customer expectations.

[scarface74]

Fair point.

I would be okay with a graduate app fee.

Tier 1: Hobbyists, you can have a “self signed” cert that allows you to have any app tied to your own device. You could also freely share source code for other people to compile themselves and put on their own device using their “self signed certificate”. This could be free. Of course you would still have to have a Mac.

Tier 2: a really cheap fee where you could sign apps that were distributed outside of the App Store for Macs. Signing apps that are distributed outside of the Mac App Store don’t require any manual approval or sandboxing.

Tier 3: the current App Store model. But the difference is that the first $x amount is charged at 30% and then it gradually goes down at larger volumes. Say the first $10K? Where eventually it is basically barely above payment processing fees. I’m sure the Epic’s of the world would be okay with this.

[scarface74]

What is your point? Didn’t I just say that Apple should scrap IAP and just become a payment processor by using Apple Pay?

[Spivak]

The problem with this line of thinking is that Apple doesn't take a 30% cut to be your payment processor but to sell on the iPhone at all. Being the sole payment processor just happens to be convenient collection mechanism. Would you still migrate to a 3rd-party payment processor if you still had to pay the 30% fee to apple and pay the 3rd party payment processing fees?

[MBCook]

Notice I never said the 30% processing fee still existed. That’s APPLES processing fee. The other payment providers would charge whatever THEIR processing fee is.

I assume the market would quickly drive Apple‘s fee down to a reasonable number.

But if Apple wants to keep charging 30%, why not? There are alternatives in my plan, so it’s not hostile.

[Spivak]

No I mean regardless of which processor you use Apple still takes a 30% cut of all digital sales on iOS. So if you use PayPal you pay Apple 30% and PayPals fees too. Because Apple isn't charging 30% to be your payment processor, they're charging 30% for the ability to sell your goods on iOS at all.

[lancesells]

It's not just the ability to sell goods on iOS. It's the reviewing of the app, the upgrades, any App Store curation, any developer support, the iOS itself, etc. That said, I think 30% is too high as an industry standard for software.

The one thing I think that might be the most costly for Apple are all the free apps on the App Store. I know you need to pay $99 a year but as they are free Apple sees nothing in return from those apps.

[MBCook]

But Apple does get a value out of free apps. They make the iPhone a more attractive platform for end-users.

How many people do you think would buy an iPhone if you couldn’t use Facebook, Instagram, Twitter, or some of the other really big free apps? They NEED those apps.

Apple could easily afford to pay for all the costs of the App Store from purchases of hardware. The $99 is just gravy.

The argument that they NEED the 30% to make up for the “freeloaders” that don’t charge for apps (as Apple seems to suggest) is ridiculous.

Apple gets a tremendous value out of the entire app ecosystem, i’d be willing to bet it’s quite a bit more than 30% they end up collecting.

[MBCook]

I understand what you said. That was not how my plan was designed to work.

[Spivak]

But your plan was essentially that Apple stops taking a 30% cut of digital sales because… they’re nice? Or someone forces them?

What does it have to do with payment processors?

[Budabellly]

> I don't think it'll ever happen without government intervention though

I think they are preparing for that moment already! Saw this job posting for partner payment systems: https://www.linkedin.com/jobs/view/1995030919/