Paddle Plans to Launch Alternative In-App Purchase System on iOS That Circumvents Apple's Fees

In response to the Epic Games vs. Apple ruling last month, payments platform Paddle today announced that it plans to launch an alternative in-app payment system for iOS that replaces Apple's in-app purchase mechanism.

paddle in app purchase
In an emailed press release, Paddle described its payment system as a "true like-for-like, drop-in replacement" for Apple's in-app purchase mechanism, allowing developers to collect payments from customers without having to pay Apple a 15-30% commission on sales. Paddle said it will have a "highly competitive fee structure" with a 10% fee for transactions under $10 and a 5% plus $0.50 fee on transactions over $10.

In addition to lower fees, Paddle said benefits of its payment system will include access to customer data such as email addresses for communicating product news and offers, flexible pricing and subscription options, direct customer service, and more.

On its website, Paddle shared a video demonstration of an app with an "Upgrade Now" button that leads to Paddle's payment system on the web. Users are then presented with the option to pay via Apple Pay, PayPal, or a credit card directly.

paddle in app purchase demo
Paddle said developers can register their interest in its in-app payment system starting today, and it said the service will go live December 7, 2021, a date that it says is in line with the terms of the Epic Games vs. Apple ruling.

The exact wording of U.S. District Judge Yvonne Gonzalez Rogers' ruling said that Apple can no longer prohibit developers from "including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing." The judge required Apple to adhere to the permanent injunction within 90 days of her ruling, which was issued September 10.

Paddle certainly has bold intentions here based on its interpretation of Rogers' ruling, but it seems unlikely that Apple will allow apps to offer alternative payment systems that circumvent Apple's in-app purchase mechanism and/or fees. We've reached out to Apple for comment, and we'll update this story if we hear back.

Apple has previously stated that alternative payment systems in apps could expose users to privacy and security risks, including fraud.

Founded in 2012, Paddle says more than 2,000 software businesses rely on its platform for sales in over 200 markets globally. Paddle advertises its customers as including Setapp/MacPaw, Scrivener, AdGuard, Readdle, and others.

Top Rated Comments

masteroflondon Avatar
8 weeks ago
"In addition to lower fees, Paddle said benefits of its payment system will include access to customer data"

And there's the privacy Apple warned about. Imagine Visa giving your address to all the shops you buy from.
Score: 83 Votes (Like | Disagree)
Da_Hood Avatar
8 weeks ago
Hmmm…. why would I agree to a payment facilitator handing out my email address?
Score: 50 Votes (Like | Disagree)
SqB Avatar
8 weeks ago
Yeah, as a user I would likely just not install or delete any apps that required me to jump through some third party hoops like PayPal or this. Then whatever alternative developers who set up basically the same app with IAP will get my business. No cost saving will be passed to the customer here. Privacy will be violated. My email is already full of enough junk, thank you.

If I wanted this kind of thing I would have bought an Android phone.
Score: 34 Votes (Like | Disagree)
ashdelacroix Avatar
8 weeks ago
This may benefit developers, but it won't benefit users. Users want to make secure, seamless, low-friction and trusted payments for apps, and not bother navigating other payment gateways. This is not a user-led rebellion. This is just about developers not wanting to pay for the privilege of selling on the world's most successful storefront. That said, I've always thought Apple's fees too high, but these have reduced for many developers now and are competitive with former traditional ways to sell software, which often commanded high fees, especially in the box-software days. Paddle could undercut Apple, sure, but users will expect to pay via Apple, and developers should be mindful of that. And anyone arguing that developers could pass on their savings to users: developers are going to use Paddle to cut their fees, but then pass their savings on to users by cutting the cost of their app? So developers would have no benefit in using Paddle?
Score: 24 Votes (Like | Disagree)
Roadster Lewis Avatar
8 weeks ago

Hmmm…. why would I agree to a payment facilitator handing out my email address?
I would not use it out of principle. I would rather not purchase an app that use this sort of payment system.
It is going to degrade the user experience for most users, have minimal impact for developers, but has probably earned lawyers/regulators a load of money in fees/lobbying etc.
Score: 22 Votes (Like | Disagree)
Paul Shields Avatar
8 weeks ago
Greedy parasite microtransaction data thieves. I hope Apple enforce a warning message that pops up every time you try to pay outside. And surely the price the user pays will be lower this way? Like when Epic pulled their failed stunt and got merced.
Score: 22 Votes (Like | Disagree)

Related Stories

app store blue banner

Apple's In-App Purchase Rules Are Anti-Competitive, Rules Dutch Antitrust Watchdog

Thursday October 7, 2021 1:41 pm PDT by
Apple's in-app purchase requirements are anti-competitive, the Netherlands Authority for Consumers and Markets (ACM) has decided, reports Reuters. The ACM has ordered Apple to make changes to the rules that force developers to use in-app payment options. The Dutch antitrust watchdog has been investigating Apple since 2019, and while the probe started out as a look into whether Apple's App...
fortnite apple featured

Epic Games Pays Apple $6 Million as Ordered by Court

Monday September 13, 2021 3:31 pm PDT by
Epic Games today paid Apple $6,000,000 in royalties, Epic Games CEO Tim Sweeney said on Twitter. As part of the ruling in the ongoing Epic v. Apple legal battle, Epic was last week ordered by the court to pay 30 percent of the revenue that it collected from the Fortnite app using its illicit direct payment option. Back at the start of the dispute between Epic and Apple, Epic added a direct...
fortnite apple logo 2

Epic CEO: Judge's Decision 'Isn't a Win for Developers or for Consumers,' Fortnite Not Immediately Returning to App Store

Friday September 10, 2021 10:37 am PDT by
The year-long dispute between Epic Games and Apple reached a milestone with Yvonne Gonzalez Rogers delivering a middle-of-the road verdict that isn't quite what Epic Games or Apple wanted. Apple will not be required to support third-party app stores as Epic Games pushed for, but Apple will have to let developers offer "buttons, external links, or other calls to action" to direct customers to ...
app store blue banner epic 1

Epic Games vs. Apple Judgment Allows App Store Developers to Link to Alternative Payment Methods

Friday September 10, 2021 8:43 am PDT by
A decision was reached today in the high-profile Epic Games v. Apple trial, with U.S. District Judge Yvonne Gonzalez Rogers ruling that Apple's anti-steering conduct is anti-competitive, and ruling in favor of Apple on all other counts. In a 185-page ruling, Judge Rogers said "the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws," but...
app store blue banner epic 1

Epic Games CEO Renews Attack on Apple and Calls for Single, Universal App Store

Tuesday November 16, 2021 3:31 am PST by
Epic Games CEO Tim Sweeney has today renewed his attack on Apple and called for a single, universal app store that works across all platforms (via Bloomberg). Last year, Epic's popular game "Fortnite" became the subject of heated litigation with Apple and Google over the rate of commission on in-app purchases. After Epic broke App Store rules by implementing a direct payment option, the game ...
app store blue banner epic 1

Judge Says Apple Has Until December 9 to Make App Store Change Letting Developers Link to Alternate Payment Methods

Tuesday November 9, 2021 5:37 pm PST by
Following a virtual hearing earlier today, Judge Yvonne Gonzalez Rogers has denied Apple's request to delay the implementation of a permanent injunction that will require Apple to make significant App Store changes. As part of the judgement in the Apple v. Epic lawsuit, Judge Gonzalez Rogers is requiring Apple to allow developers to add in-app links to outside websites, paving the way for...
Apple Pay Feature

Banks Pressuring Visa to Cut Back on Apple Pay Fees

Tuesday October 5, 2021 10:29 am PDT by
A number of banks are currently pressuring Visa to make changes to the way it processes some payments made via Apple Pay, moves that would reduce the fees the banks pay to Apple for certain transactions, reports The Wall Street Journal. At the heart of the issue are automatic recurring payments like memberships and streaming services. Visa is aiming to change the way it issues tokens for...
play store google

Google Lowers Play Store Subscription Fee From 30% to 15%

Thursday October 21, 2021 9:31 am PDT by
After lowering its Play Store commission from 30 percent to 15 percent in March, Google today announced that it is making the same change to subscription fees, an update applicable to all app developers, reports The Verge. At the current time, Google's subscription policy works like Apple's. Google collects 30 percent from a subscription during the first year, and then drops that to 15...

Popular Stories

Mac Notebook Upgrade Program

Apple Introduces New MacBook Upgrade Program for Business Partners

Monday November 29, 2021 7:38 am PST by
In association with CIT as the financing partner, Apple has launched a new Mac Upgrade Program for small businesses and Apple business partners that allow companies to easily distribute and upgrade their fleets of MacBooks at an affordable price to all of their workers. As outlined on CIT's website, shared by Max Weinbach, Apple Business Partners can distribute the 13-inch MacBook Pro,...
General cyber monday 20 sale feature

Best Cyber Monday Deals for AirPods, Apple Pencil, iMac, More

Monday November 29, 2021 4:19 am PST by
With Black Friday over, Cyber Monday 2021 is now in full swing and you can find many of the same sales as last week on Apple products like AirPods, Apple Pencil, and iPad Pro. In this article we're focusing on the best Cyber Monday discounts on Apple products like these and more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we...
2017 apple tv

Cyber Monday: Original Apple TV 4K Drops to $99.99 for Amazon Prime Members

Monday November 29, 2021 12:01 pm PST by
We've been tracking Apple product and accessory deals for Cyber Monday 2021 today, and now Woot is offering a solid discount on the previous generation 32GB Apple TV 4K. You can get this device in new condition for just $99.99 if you're an Amazon Prime member. Note that this sale will last for one day only. Note: MacRumors is an affiliate partner with some of these vendors. When you click a...
iPhone SE Cosmopolitan Clean

New iPhone SE Reportedly on Track for Release in First Quarter of 2022

Tuesday November 30, 2021 8:08 am PST by
Apple plans to release a third-generation iPhone SE in the first quarter of 2022, according to Taiwanese research firm TrendForce. If this timeframe proves to be accurate, we can expect the device to be released by the end of March. As previously rumored, TrendForce said the new iPhone SE will remain a mid-range smartphone with added support for 5G:In terms of product development, Apple is...
maxresdefault

Five Features to Look Forward to in the 2022 MacBook Air

Tuesday November 30, 2021 1:51 pm PST by
In 2022, Apple is going to release an updated version of the MacBook Air with some of the biggest design changes that we've seen since 2010, when Apple introduced the 11 and 13-inch size options. In the video below, we highlight five features that you need to know about the new machine. Subscribe to the MacRumors YouTube channel for more videos. No More Wedge Design - Current MacBook...
telsa cyberwhistle

Elon Musk Urges Customers to Buy 'Tesla Cyberwhistle' Instead of Apple Polishing Cloth

Wednesday December 1, 2021 4:01 am PST by
Tesla CEO Elon Musk has encouraged customers to buy the "Cyberwhistle" for $50 instead of Apple's much-discussed Polishing Cloth. The product page, which Musk shared on Twitter on Tuesday evening, offers a limited edition stainless steel whistle with the same distinctive design of the Tesla Cybertruck:Inspired by Cybertruck, the limited-edition Cyberwhistle is a premium collectible made from ...
General cyber monday 20 sale feature 2

Best Cyber Monday Apple Accessory Deals Available Today

Monday November 29, 2021 6:41 am PST by
We started sharing deals on Apple products for Cyber Monday 2021 earlier today, and now we're tracking deals and bargains available from all of the best Apple accessory companies. Similar to Black Friday, you can expect Cyber Monday savings from Twelve South, Nomad, Belkin, Casetify, and many more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and...
iphone holiday

Best Black Friday iPhone Deals Still Available

Friday November 26, 2021 4:58 am PST by
Cellular carriers have always offered big savings on the newest iPhone models during the holidays, and Black Friday 2021 sales have now carried over into Cyber Monday as well. Right now we're tracking notable offers on the iPhone 13 and iPhone 13 Pro devices from AT&T, Verizon, and T-Mobile. For even more savings, keep an eye on older models like iPhone SE. Note: MacRumors is an affiliate...
airpods prototype translucent

Transparent AirPods and 29W Power Adapter Prototypes Surface in Photos

Tuesday November 30, 2021 7:16 am PST by
Images of transparent prototype AirPods and a 29W Apple power adapter have been shared on Twitter by Apple device collector Giulio Zompetti. The prototypes, which appear to be either first-generation or second-generation AirPods, feature clear plastic along the stem and around the outer side of the earbud, with the normal white plastic on the inner side of the earbud. Transparent casings are ...