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Comment by MR4D | Hacker News Reader

Visa charges you 3% but doesn’t have an online store that I can find your app on, and don’t run security checks against your app to check for malicious apps, etc.

So I think we can agree that a realistic number for Apple is definitely above 3% for the service they provide.

We can argue about 30%, and that’s a good discussion, but 3% is no way comparable.

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I think most credit card processors charge something like 30 cents + 2.9%. On large purchases that's about 3%, but on smaller transactions (like those usually used in mobile apps) that 30 cents dominates and could end up being about 30%. So from that perspective Apple's 30% cut could be a good deal in some cases.

It's not a "good deal" in any case....

The minimum purchase price on iOS is $0.99, so at worst you'd be paying basically the same rate (~30%).

But most payment processors offer separate pricing for micro-transactions (e.g. Paypal is 5% + $0.05 IIRC). Which works out at around 10% for a $0.99 transaction.

And actually - Adyen offer much better pricing than the "Stripe rate" of $0.30 + 2.9% in the first place.

A few years ago when making a micro transaction app, PayPal only allowed one type of fee structure — either the 5% or the 2.9%.

Meaning you couldn’t segregate low tickets from high tickets and get the most optimal fee - your whole merchant account was one fee or the other.

‘Twas quite a PITA

Yeah this is still the case AFAIK - very annoying. I believe their recommended workaround was to have 2 separate merchant accounts with different fee structures and group your products accordingly.

The 12% that Epic and now Microsoft charge seems about right IMO

Based on what arguments?

If Apple’s cut were 12% and Epic and Microsoft now charged 6%, would you claim “The 12% that Apple charges seems about right IMO”?

Yep, if someone is able to maintain above market level profits for so long it's usually a sign of monopolistic pricing. That's not necessarily bad, but in Apples case it's just double dipping on their monopolistic position and is clearly a drain on the market with no benefit. They have the same incentives to invest in R&D and support the ecosystem on the insane HW margins alone, I'd be willing to bet their dev budget doesn't change at all if this change in rate was made.

But how do you know 12% is about right, and not 10%, 2%, …

Also, Apple will claim they have a better product that warrants higher margins. Data from independent parties shows that they attract more users willing to pay for apps, and developers aren’t leaving en masse for Android.

>Also, Apple will claim they have a better product that warrants higher margins.

And this argument is fine in the hardware market because they have competition, it's efficiency monopoly - that's why I said it's not always bad.

However their app store controlls access to 50% of US market (even more by revenue) simply because it comes as the only option and the consumers can't unbundle it. If they had competition on the platform (different stores/distribution methods) - you wouldn't have to say what % is right, the market would decide the value added by their app store/payment methods.

For some even 3% could be too high let alone 30%. For instance, Kindle iOS app doesn’t let you purchase books. It’s a read-only version, so to speak.

Most credit card processors charge around 3%, so it's rarely an issue. The number I usually throw out that Apple could charge and no one would be mad over is 5%. It's more than a credit card processor, but not that much, and it would likely help conversion rates enough that app developers would be happy.

Apple had 72.3 billion revenue from App Store in 2020. I can assure you that I can provide you with online store that I can find your app on, and run security checks against your app to check for malicious apps, etc. for 2.1 billion $ per year (3%).

Ah yes, and I’ll have that feature done in 2 weeks, max! How hard could it be?

The excuse is hardship? Are you saying that Apple's app store profit margin is low, or comparing $2.1 billion to 2 weeks?

I never said it would be done in two weeks but I think you underestimate what can be achieved with 2.1 billion dollars per year. For 200-250$ mil you will have ~1000 software engineers/project managers/other staff and you are left with 1.9 billion, costs for infrastructure + bandwidth not more than 400 mil, you are left with 1.5 billion.

They also don't curate a language and IDE for you to make your stuff with as well, nor offer logins or ways to find past transactions.

> curate a language and IDE for you to make your stuff with as well

That's an odd way to put it. Approximately 0.001% of developers would complain if instead they were allowed to use the language and IDE they prefer.

They can use their IDE, at least. And given every phone platform I know of has restricted language support, I can't imagine it's a simple problem to solve.

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