[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?