[XGNews]: Apple App store is open to third-party payment for the first time: or it contains huge business opportunities

The following is the [XGNews]: Apple App store is open to third-party payment for the first time: or it contains huge business opportunities recommended by xgapn.com.

It is reported that Apple allowed external payment service providers to enter the app store for the first time last weekend. Although this change may seem insignificant, it is actually far-reaching and will provide profitable business opportunities for many companies.

On Saturday, apple complied with the requirements of the Dutch government and opened third-party payment to dating apps. The company said in a statement on the developer’s website: “we have exclusively launched two new options for dating applications in the Netherlands to provide users with additional payment processing options.”

Although this is only a change for a class of applications in a country, opening the app store payment channel to third-party applications is a major progress for apple. The company has always rejected this model before, but this trend may spread to other countries / regions.

The Korean Communications Commission (KCC) ordered apple and Google to open third-party payment to all applications last December. It is reported that this month, apple revealed its plan to follow the New South Korean regulations and allow developers to provide payment options in third-party applications in the app store.

According to the Korean Herald, in a proposal submitted to KCC, apple provided an alternative payment system with a fee lower than the standard 30%, but did not disclose when the measure would take effect.

Apple and Google said they would still charge for intra app transactions processed by other payment services. However, developers, payment companies and industry analysts will still adjust their forecasts and make plans for this latest change.

Large developers may save millions of dollars

As one of the world’s largest dating applications, match group praised the decision of the Netherlands and thanked its regulators for their “bold measures” to create a more equitable ecosystem, but their colleagues also called on other regulators to implement similar measures.

“Although Apple faces censorship around the world, they are still abusing their dominant position and harming application developers and entrepreneurs through unfair policies, most importantly consumers.” Match said in a statement.

Market research firm sensortower estimates that consumers spent more than $133 billion on in app purchases last year. If developers can freely choose the third-party payment method outside the official channels of apple and Google, they can save millions of dollars, so as to improve the profit margin or reduce the cost of consumers, or even both.

Royal Bank of Canada capital markets estimated last September that if Apple’s app store is deployed globally in 2022, match group can save up to $215 million a year. Bumble, another dating app developer, can save up to $55 million a year.

Evercore ISI analyst Shweta khajuria said that dating applications such as bumble and tinder can encourage consumers to use third-party payment options by reducing app subscription fees.

“The bigger impact is that as more countries allow other payment methods, it will put pressure on apple and Google to open this channel around the world,” khajuria said

Stripe, paypal and paddle may benefit

Ronak Doshi, a partner of Everest group, a market research firm, said that large payment companies such as stripe, paypal and the company’s Braintree would benefit from it.

He also specifically mentioned paddle, which released the in app purchase system in the case of Epic Games v. Apple last year. The judge ruled that apple must allow application developers to guide users to use other payment methods. But Apple appealed.

Paddle is designing products specifically for Apple’s IOS mobile operating system and positioning itself as a direct competitor of Apple’s payment system. The startup plans to charge a 10% commission for transactions below $10 and a 5% commission plus 50 cents for transactions above $10. In contrast, apple charges a commission of between 30% and 15%.

“Because Apple postponed the adjustment of app store in app purchase on December 8, we also postponed the product launch plan.” Paddle said on the official website, “once Apple determines which functions of in app payment of third-party applications will be allowed (or not), we will update the latest situation.”

Apple and Google may retain data by reducing prices

Dosh said that apple and Google may reduce the fees of their app stores due to the threat of new payment competitors. Data on consumer buying habits are also valuable, and these companies are likely to retain these information flows (and give up a certain percentage of the cost) rather than cede such a relationship to other companies.

App store is following the evolution path of the financial industry more than a decade ago and opening the payment system outside the bank.

“They are improving market competition and allowing consumers more choices instead of monopolizing key services,” dosh said

The secret of success in new markets

Dosh said that the secret to success in this emerging market lies in providing simple integration, strong archiving system, good user support and low and transparent fees.

Barak Orbach, a law professor at Arizona State University who specializes in the digital economy, believes that changing payment methods is not easy because it needs to convince consumers that new payment services are safe.

He pointed out that consumers are biased when choosing payment providers, although this may not be rational. He also said that he was not satisfied with Google’s payment system and preferred to use Shopify, Amazon and Apple’s payment systems.

Liesel sharabi, director of the relationship and Technology Laboratory at Arizona State University, believes that the adjustment of the app store payment system will stimulate greater innovation in the dating application industry. She also mentioned that tinder may use “application currency” as a possible payment mode.

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