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
33 months 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: 82 Votes (Like | Disagree)
Da_Hood Avatar
33 months ago
Hmmm…. why would I agree to a payment facilitator handing out my email address?
Score: 50 Votes (Like | Disagree)
SqB Avatar
33 months 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
33 months 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
33 months 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
33 months 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)

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