A hot potato: Epic’s fight with Apple to force it to use its payment system is really about not paying App Store commissions. As such, the case has prompted several regulators to consider passing laws requiring Big Tech giants like Apple and Google to allow off-platform payments. The problem is that the efforts only raised prices for the consumer and did not prevent Apple or Google from continuing to collect their due.
On Thursday, Apple announced that it would allow South Korean app makers to use third-party payment platforms. This decision is in line with recently introduced and rapidly adopted legislation in the country. Google also changed its payment guidelines after Korean authorities passed the law last November. However, the changes come with a few caveats that will likely affect customers and developers alike.
On the one hand, external payment platforms must be approved by Apple. There are currently only four service providers that developers can use: KCP, Inicis, Toss, and NICE. Apple has set up an approval request page on its developer website. Cupertino will review and authorize services on a case-by-case basis.
South Korea ignored all the noise about the Apple-Google duopoly being extremely powerful, passed a law, and now people can buy things in apps without having to pay app store tax.https: //t.co/xPvez47uv4
— Vlad Savov (@vladsavov) June 30, 2022
Second, Apple assumes no responsibility for any issues, refunds, or other issues related to the use of any third-party service. If customers need to resolve an issue, it will be left between them, the developer, and the payment provider, which could be a hassle for everyone involved. Customers also won’t be able to take advantage of Apple-centric services like Family Sharing and Ask to Buy parental controls.
Finally, while lawmakers intended to free developers from Big Tech’s payment ecosystems, it comes at a price. The rule does not prevent the developer from paying Apple tax. Instead, Apple charges a reduced rate of 26% for all transactions. The reduced rate is in line with what Google has done with the Play store, which has already shown the consequences.
Developers using payment methods outside of Google Play have passed on additional app and subscription costs to Korean Android consumers. Dutch dating app makers discovered the same situation with a similar Dutch law. There is no logical reason to assume that it will be any different for Korean Apple users.