July 21, 2024
Apple Imposes Stringent Rules and 27% Commission on Apps That Link to Alternative Payment Methods

Apple Imposes Stringent Rules and 27% Commission on Apps That Link to Alternative Payment Methods

Posted January 17, 2024 at 4:06am by iClarified
Apple has announced changes to its App Store rules to comply with a U.S. court ruling that prevents the company from enforcing anti-steering measures.

In a clear effort to prevent developers from choosing to link to outside payment methods, Apple is imposing a number of burdensome rules and demanding developers give it a 27% commission on any sales generated from an in-app link. Additionally, even if no sales are generated from the link, developers must submit transaction reports within 15 calendar days following the end of each calendar month.

Developers must also apply and get Apple's approval to include an outside link. That link must be a plain link on a single screen of the app. It cannot be placed on an in-app purchase screen or in the in-app purchase flow. The link can't be opened in the app. It needs to open in the default browser, likely requiring users to sign-in again. Additionally, a large warning sheet must be shown to users before the link opens.

To get Apple's approval for a StoreKit Purchase Link Entitlement (US), here is a brief overview of the steps developers will need to take...

Submit a Request for Entitlement:
● Be an Account Holder in the Apple Developer Program.
● Submit the entitlement request form with details like app's bundle ID, website domain, and payment service provider.
● Agree to the entitlement's terms and conditions.

App Qualifications:
● The app must be available on the iOS/iPadOS App Store in the United States.
● Offer in-app purchases through the U.S. App Store.
● Not be a participant in the Video Partner Program or News Partner Program.

App and Website Information:
● Provide app name, description, and bundle ID.
● Include the destination URL for purchases and customer support website URL.
● Configuring Entitlement in Xcode:

Configure the App ID in Certificates, Identifiers & Profiles.
● Update Xcode project, entitlements plist file, and Info.plist file with the entitlement and metadata.
● Ensure compatibility with iOS or iPadOS 15.4 or later.

Updating Info.plist File:
● Include specific entitlement requirements in the app's Info.plist file.
● Ensure destination URL follows specific format (https, no query parameters, valid URL, under 1,000 ASCII characters).

App and Link Requirements:
● Follow usage requirements for privacy, security, and quality.
● Offer in-app purchases in line with the Developer Program License Agreement and App Store Review Guidelines.
● Use canMakePayments API and StoreKit External Purchase Link API before linking to external purchases.

Link Requirements:
● Direct link to the website without redirects or intermediate links.
● Open in default browser, not in a web view.
● Statically-defined in the app's Info.plist file.
● Adhere to design and language requirements.
● Not discourage Apple's in-app purchase system.
● Displayed only once in a single, dedicated location.

Design and Language Guidelines:
● Follow specific template language for the purchase link.
● Use the Plain Button style and include the link out icon.

In-app System Disclosure Sheet:
● Display a system disclosure sheet explaining external website redirection for purchases.

Submission for App Review:
● Proper implementation and testing of the app and disclosure sheet.
● Include screenshots showing the link in the app UI.
● Provide payment service provider details.

Commission, Transaction Reports, and Payments:
● Pay Apple a commission of 27% (or 12% for certain cases) on digital purchases initiated within seven days from link out.
● Provide transaction reports within 15 days after each calendar month.
● Remit payments to Apple based on invoices.

Customer Support:
● Provide timely support for external payment issues, as Apple will not assist in such cases.

Compliance and Auditing:
● Ensure compliance with Apple's audit rights to review the accuracy of digital transaction records.
● Failure to comply may lead to consequences like app removal or termination from the Apple Developer Program.

Epic Games CEO Tim Sweeney describes the changes by Apple as a "bad-faith 'compliance'" of the court's injunction. The company plans to contest the implementation in court.

A quick summary of glaring problems we've found so far:

1) Apple has introduced an anticompetitive new 27% tax on web purchases. Apple has never done this before, and it kills price competition. Developers can't offer digital items more cheaply on the web after paying a third-party payment processor 3-6% and paying this new 27% Apple Tax.

2) Apple dictates all aspects of these links and doesn't allow them in the app's ordinary payment flow. Rather, links must be separated out into a different section of the app, away from places where users actually buy stuff.

3) Apple requires developers to open a generic web browser session, forcing the user to log in to the developer's web site again, to make a purchase. And because of #2, users will have to search all over again for the digital item they wanted to buy.

4) Apple will front-run competing payment processors with their own "scare screen" to disadvantage them.

Epic will contest Apple's bad-faith compliance plan in District Court.

Please download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for more updates.

Apple Imposes Stringent Rules and 27% Commission on Apps That Link to Alternative Payment Methods
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