Paddle Postpones Launch of In-App Purchase Alternative After Apple Wins Reprieve
Payments platform Paddle will be delaying the launch of its alternative in-app payment system for iOS, the company announced today. The delay comes after Apple won a stay allowing it to maintain the current App Store payment setup until after an appeals court examines the original ruling in the Epic v. Apple case.
Back in October, Paddle announced plans to launch a web-based payment system that would serve as an alternative to in-app purchases. Paddle described the system as a "true like-for-like, drop-in replacement" for Apple's in-app purchase mechanism that would let developers collect payments from customers without having to pay Apple's 15 to 30 percent fee.
Paddle planned to charge a 10 percent fee for all transactions under $10, and a 5% plus $0.50 fee on transactions over $10, while also providing app developers with customer data that included email addresses for communicating product news and offers, flexible pricing and subscription options, direct customer service, and more.
When announcing its planned in-app purchase alternative, Paddle said that it would launch on December 7, 2021, two days before Apple would have been required to implement major App Store changes had Apple not received a stay on the original injunction.
Judge Yvonne Gonzalez-Rogers, who oversaw the Epic v. Apple trial, ruled that Apple would be prohibited from restricting developers from including "in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms," paving the way for alternative payment systems.
Rogers gave Apple 90 days to implement the App Store changes, and denied a stay on the ruling when Apple asked. Apple then appealed to the Ninth Circuit Court, which granted a stay until it is able to fully hear the case. It could take several months for the appeals process to play out, and while it does, Apple is not required to make any updates to the App Store.
Paddle will not be able to launch any kind of alternative to in-app purchases until the appeals court provides a ruling, and it's possible that the appeals court could rule in Apple's favor, vacating the original decision entirely.
Because Apple was counting on an appeal, the company never announced details on how the App Store changes might be implemented, and it's unknown if Paddle's alternative would have even been allowed.
Apple CEO Tim Cook has made it clear that Apple will continue to collect commission on content sold through the App Store even if developers aren't using the in-app purchase system. "We would have to come up with an alternate way of collecting our commission," Cook said during the Apple v. Epic trial. Cook said that Apple would need to come up with a way to track sales, invoice it, and then chase developers for the money. "It seems like a process that doesn't need to exist," he said.
Apple has also maintained that an alternative purchase system would be inconvenient to customers, requiring them to fill in their credit card information for different apps, which could also lead to fraud issues.
Paddle says the testing process for its IAP solution has been completed and the platform is "fully ready to launch," but because of the court delay, it does not have the "clarity on the necessary technical changes and new rules regarding third-party IAP payments" and thus will not be able to debut the product. Paddle plans to "follow the case closely" with plans to be one of the first to launch "when alternative payment methods are allowed."