Apple's Proposal to Allow Third-Party Payment Methods in App Store 'Lacks Detail,' Says South Korean Regulatory Commission

Apple's plans to allow developers to use third-party alternative payments methods within their apps in South Korea "lacks concrete detail," according to South Korea's Communications Commission (KCC).

General App Store South Korea Feature Feature
In August, South Korea passed a law that bans app store operators from requiring developers to use their in-app purchase systems. Last month, Apple submitted its compliance plans to the KCC that would allow apps in Apple's South Korean App Store to use third-party payment methods within their apps. Apple's plans include that the company will still take a commission for all purchases made, even those made with third-party alternative payment methods, but specific details were not shared.

Now, ahead of the law being finalized and enacted, South Korea's KCC says Apple's submitted plan "lacks concrete detail," reports Reuters. KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods, arguing that such a commission will entice developers to stay with the app stores' respective, default payment process.

"As a result of any policy, if app developers find it realistically difficult to use an alternative payment system and resort to using the dominant app store operator's payment system, it would not fit the law's purpose," the official said, adding that this stance would likely be reflected in the final ordinance."

A similar series of events have taken place in The Netherlands, one of several countries looking into Apple's ‌App Store‌. Dating apps in The Netherlands will soon be allowed to use third-party alternative payment methods. Apple's plans to comply with the law in The Netherlands have been criticized for being inadequate in addressing concerns, leading to a fine of 5 million euros per week up to a maximum of 50 million euros until Apple complies.

"We look forward to working with the KCC and our developer community on a solution that benefits our Korean users," Apple had previously said in a statement about the law in South Korea. "Our work will always be guided by keeping the ‌App Store‌ a safe and trusted place for our users to download the apps they love," the company added.

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Top Rated Comments

Michael Scrip Avatar
31 months ago
Google has already stated how they will handle commissions in South Korea:

15% if you use the Google Play Store payment system
11% if you use another payment system

I'm guessing Apple will do something similar.

But you may be saying "that's only 4% less... once the developer pays for outside payment processing... it'll be roughly the same as if Google handled it all!"

That's true! So maybe instead of arguing about

"alternative payment systems"

developers should have been begging for

"lower commission fees"

Because guess what... payment fees are pretty standard nowadays. 3% to 4%

But it's the platform commission fees were always the bulk of what developers paid.

No one ever talked about it because it was all rolled into one flat fee.

But now that we can separate platform fees and payment fees... I guess people will start arguing about commission fees next!

:p
Score: 9 Votes (Like | Disagree)
neuropsychguy Avatar
31 months ago
“KCC is unhappy that both Apple and Google still plan to charge a commission on purchases made with third-party payment methods.”

There ain't no such thing as a free lunch. If the commission fees are banned, the companies will make it up elsewhere.
Score: 9 Votes (Like | Disagree)
DelayedGratificationGene Avatar
31 months ago
It’s absurd to think Apple will never be allowed to charge a commission with or without payment options. If that happened then every platform from Walmart to PlayStation would never make money and be forced out of business. Stop even questioning the commission aspect because it’s NOT going away.
Score: 8 Votes (Like | Disagree)
AndiG Avatar
31 months ago

Google has already stated how they will handle commissions in South Korea:

15% if you use the Google Play Store payment system
11% if you use another payment system

I'm guessing Apple will do something similar.

But you may be saying "that's only 4% less... once the developer pays for outside payment processing... it'll be roughly the same as if Google handled it all!"

That's true! So maybe instead of arguing about

"alternative payment systems"

developers should have been begging for

"lower commission fees"

Because guess what... payment fees are pretty standard nowadays. 3% to 4%

But it's the platform commission fees were always the bulk of what developers paid.

No one ever talked about it because it was all rolled into one flat fee.

But now that we can separate platform fees and payment fees... I guess people will start arguing about commission fees next!

:p
Guess that is the point. Apple has never declared how it is going to control bank transfers and collect fees. What is the difference between using a locally implemented in app payment and a payment on a website? What if the app invokes a website for payment? What if the app displays the website in an integrated browser within the app?

Guess Apple is simply not allowed to control transfers of money? Why doesn't Microsoft charge me, when I use internet banking using Microsofts edge browser on Windows?

Apples proposal is simply rediculous. Will Apple charge me for any bank transfer that is done using macOS? What if I buy a movie on AmazonPrime using macOS? What if I use iPadOS? Does it make a difference if I use an App or the browser?

Lots of questions.

They got very greedy ...
Score: 8 Votes (Like | Disagree)
DelayedGratificationGene Avatar
31 months ago
“Ok Epic here is your commission invoice for your 3rd party payment transactions”….”what?”…”wait!”…”so now it’s costing me to have a 3rd party payment system PLUS I still have to pay you guys commission for your awesome platform?!”…”man this is going all the wrong way!”……hmmm I should have thought this out better
Score: 6 Votes (Like | Disagree)
macar00n Avatar
31 months ago
If they're going to act like this, then they should have the iPhone and its app store taken away. Imagine telling a physical store that you want to put your products on its shelves for free, want your own payment method added to their checkout for free, and dictate the exact terms of how they are sold. South Korean lawmakers are completely out of touch, and would be straightened out by their citizens in about ten minutes if Apple threatened to pull out of the country.
Score: 6 Votes (Like | Disagree)