Apple Presents Plan to Allow External Payment Processing in Apps to South Korea Regulator, Details Currently Scant

The South Korea Herald:

Apple said it plans to provide an alternative payment system at a reduced service charge compared with the current 30 percent charge, as the tech giant turned in its compliance plans to the Korea Communications Commission (KCC).

The company did not provide the exact date of when the policy will take effect or the service fee to be applied but said it plans to discuss with the KCC on further details.

I’d bet money that Apple’s compliance plan will follow Google’s, which was announced two months ago. They’ll create a set of APIs for apps to use if they wish to process payments on their own, and those APIs will track the amount of money so that Apple can still collect their cut as the platform owner. Google’s plan reduced the rate by 4 percent, so an app that would get an 85/15 split through the Play Store’s built-in payments system will instead pay 11 percent of the transaction price to Google. Apps in South Korea will be able to process payments on their own, but they’ll have to use the APIs that ensure Google (and now Apple) get their cut.

These are platform fees, not payment processing fees. Google’s and Apple’s app stores are platforms, and they have every right to charge whatever fees they want. This whole thing shows how misguided South Korea’s legislation is. The right answer is simply to pass legislation making it illegal to ban apps from linking from within apps to their websites. The web is the open platform where developers are free to accept payments however they wish, with no fees paid to Apple or Google (or Sony or Nintendo or Microsoft).

I just took a shower and this small conundrum popped into my head, though: What about a native app for iOS or Android that itself is a web browser, which the user has set to be their default web browser? How would a third-party web browser “send users to the web, outside the app” to take payments for a subscription or to unlock features? That’s a corner case, to be sure, but it’s not outlandish. My spitball answer is that if an app is a web browser, and it is set by the user to be their default, then payment links can just open in tabs within the app. Done.

Wednesday, 12 January 2022