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Comment by chc | Hacker News Reader

It's a little baffling how he thinks that Apple might charge up to 10% to handle payments when they already charge 30% for handling payments.

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30% isn't for handling payments, it's for building a store and bringing in tens of millions of affluent customers. Although the percentage may vary you may have seen a similar business practice in every store you've ever been in in your life.

No, 30% is also for handling in-app payments.

No 3% is for handling in-app payments and 27% for validating apps, maintaining the dev ecosystem, advertising apps, and building iOS devices in the first place.

That sounds very to-may-to/to-mah-to. Couldn't Apple charge 30% for the kind of payment processing the OP describes and you could break it down the exact same way?

There is plenty of completion for payment processing though. A merchant is not going to give up 30% of their revenue just to let someone pay with their phone when the same person would also be willing to use their credit card or cash. However, you can't reach most iOS users by selling in the Android marketplace so if you want access to millions of iPhone users you need to pay for the privilege.

See: Amazon's Kindle app for the exception that proves the rule. Amazon has their own Kindle marketplace where they take a significant cut, they where willing to give Apple a slice of the pie just not 30%. So they ended up removing in App purchases from their iOS kindle reader. The back door is you can still use their website from your phone and order a book through them which will show up on all your Kindle readers.

However, random App makers don't have the customer leverage to do the same thing.

It's not for handling. It's for bringing the payments into existence.

No, companies were able to do payments before — they just had to use another payment processor, like PayPal or Google. Now Apple slides into the same spot.

I took it as "up to 10% for a non-virtual good" as opposed to 30% for apps and in-app payments for virtual goods.

Yah this is what I was wondering. It's rather amazing to me that so many businesses complain about the 3% or whatever that credit card companies take while it seems like few app developers complain about losing 30% to Apple.

Follow up question... how many app developers would suddenly be profitable if Apple only took 3% (or even 10) instead of 30%?

I do say you're not going to be able to charge 10% for a flatpanel TV, but for a Groupon or movie ticket? Well folks already get 10% commissions on those items (i.e. Fandgo or Groupon affiliates).

But if not 10% let's just say 2%... it's still an AMAZING business.

2% after a little fraud and customer support becomes a terrible business.

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