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Comment by zaksoup | Hacker News Reader

This is something I hadn't thought about until the article pointed it out. According to the first link in google (https://www.braze.com/blog/in-app-purchase-stats/) the average iOS IAP in 2017 was $1.08. If you compare that to Square and Stripe's fee structure then the processing fees charged by the credit card processors is about 25%. This means Apple's taking for themselves much closer to a 5% cut which seems much more reasonable for the services provided.

Why Apple doesn't switch to a 5% + $0.29 structure is anybody's guess, however...

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Apple provides a ton of services besides the credit card processing.

  - 24/7 worldwide availability, instant payment/app download
  - Easy re-install after deletion, you still own the app even if deleted
  - Region restriction
  - Separate app pricing by region
  - Revenues paid to developer from multiple region currencies without
    conversion fees
  - Tax calculation and collection
  - Customer refunds
  - User rankings and reviews
  - App store advertising in category listings
  - Video previews of the app in operation
  - Packaging of media content allowing developers the ability to load game
    levels as needed. This allows a user to start playing your game quickly.
  - App sales stats

Most of them are there either because local laws, or purely to benefit Apple, or both, e.g. region restriction helps Apple add content to their store, and circumvent local restrictions, if apply.

Why compare to Square's or Stripe's fee structure? It's ridiculous to claim "This means Apple's taking for themselves much closer to a 5% cut" as if Apple is paying a $0.29 processing fee per IAP.

If developers had a choice in payment processors, they could choose one with smaller minimum per-transaction fees, aggregate multiple payments from the same customer, try out subscriptions instead of microtransactions so the payment processor takes a smaller cut, etc...

Sorry, I am not arguing that developers shouldn't be allowed to pick their payment processor on iOS, just doing some back-of-the-envelope math that tracked with the quote from the original article that 30% is not much higher than the processing fees in the first place on a $0.99 transaction. This was a surprising revelation to me since I hadn't considered that there were often flat fees of ~30 cents from card processors.

Having worked at a payment processor, if you are a medium to large business, you can cut deals with payment processors for a much lower fee. They are very competitive, and of course, Apple would be a special customer given very generous terms (assuming Apple are not processing the transactions themselves which is possible). This does not even take into account Apple store credit via gift cards and the like or purchasing different apps in one transaction which eliminates or lowers the fees.

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