Apple's reduced App Store commissions are a boon for customers. But experts weigh whether it's truly beneficial for everyone.
Table of Contents Apple’s iOS App Store is in for a big change. This sentiment is brewing among folks who create, sell, market, or scale apps for iOS, iPadOS, or other Apple devices. In addition to developers, users should benefit from the change — or at least, so we think.
Apple reasoned this as a premium to enable safe transactions and for giving developers a platform to host and distribute their apps to billions of users. However, the 27 percent commission in addition to the additional costs for hosting a payment platform, accounting for taxation and compliances, and pouring resources to track payments — all while risking the possibility of annoying users for changing platforms for payments actually increased liabilities for developers.
Apple responded to the court order immediately by updating its pricing policy and eliminating any fees on transactions, effectively charging a zero percent commission on any transactions for users — only — in the U.S. Aside from the apparent benefit of reduced costs, the changes also open a breadth of payment options for the subscribers. Based on the payment platform the developers use, users may have the option to pay with credit or debit cards, ACH bank transfers, payments services such as Zelle, PayPal, or Venmo, and even cryptocurrencies. Certain platforms, such as Stripe, may also allow microloan options like Klarna.
Cost benefits for developers One of those larger brands benefiting from the ruling is Zumba — yes, it’s a trademarked brand that has come to be known as a common fitness routine due to its sheer popularity. Zumba is already in the 30% slab and uses what is called a “web-to-app” sales funnel, where users can learn about the app on the website and subscribe to it even before downloading the app.
To avoid losing users, Zumba has been offering the same subscription costs across the web and in-app interfaces, absorbing Apple’s fees in the latter. “This change gives us the opportunity to accelerate growth. Improved financial performance from web conversions could fuel scaled acquisition efforts and better ROI across our channels,” Levy adds.
While the 30 percent fee sounds exorbitant, Apple also allows developers to be free from any stress related to filing taxes and other regulatory paperwork, allowing them to focus on building products — and that’s precisely what Apple’s in front of the court was too. It doesn’t sound so bad when you look at it like that. Even worse, for developers also selling apps outside the U.S., these matters get even more complicated.
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