On Apple's 15% in-app commission, validation, and In-app Purchase management

The situation between Epic Games and Apple has cooled down recently, but is on the rise again. We're talking about the hype around the news that Apple has reduced the commission for app developers with sales of less than $1 million.

Our team creates servers for mobile apps, so I will describe my vision of the situation. At the same time I'll tell you how to organize in-app purchases using your own server and not pay a 30% commission.

If you think this article somehow justifies Apple, it doesn't. I'm stocking up on popcorn and watching the story unfold, deeply worried about Epic Games, who have been seriously screwed by Apple.

Some thoughts and statistics

After the news about the Epic Games purchase bypass and Pavel Durov's posts, the Internet split into two camps: supporters of Apple infrastructure and supporters of Epic Games..

For the sake of brevity in the article, I will call all mobile platforms "Apple", as each of them takes a commission.

Let me start by saying that most users know nothing about commissions and in-app payments ("in-app purchases including premium content, digital goods, and subscriptions"). Users have little or no interest in how exactly the money from the purchase is distributed. Only the rare advocates for sustainable consumption or simply curious folks think about it. The majority of buyers do not care what happens to their money afterwards.

Now let's look at the statistics of in-app purchases.

The diagram is a bit skewed, but I couldn't find another one.

As you can see, the vast majority of the applications - 94%! - are free. Almost 83% of developers do not monetize their work at all.

Let's do some more math:

  1. Statistically, only 5% of users make in-app purchases.
  2. Let's assume that an average user has ~20 apps installed.
  3. Say that those 5% of paying users have an average of 2 paid apps installed.

By simple calculations we find that only about 0.25% of the total number of app downloads is comprised of paid apps. This is easy to explain - the most popular apps are free. This means that more than 99% of apps in the app store are served by Apple for free (well, except for the $100 per developer per year, but that is negligible).

Of course, the platform for delivering apps to users does a lot: development and support, moderation, billing, outbound traffic, etc. Durov says that Apple's commission greatly exceeds these expenses. Now, I'm not arguing that the commission should be exactly 30%. But it is essential. And given that normal Internet acquiring charges ~3.5% just for a transaction, the same 15% look more than reasonable.

So why is everyone mad at Apple?

Sergey Vanichkin published an excellent article onvc about why developers are hating on Apple. Some of the reasons are:

  • Poor moderation
  • Glitches in purchases
  • Bad analytics
  • Inconvenient developer account

The arguments seem reasonable and valid. But users do not have to deal with this. Almost any worthy application has all the problems solved quite quickly: content is delivered, analytics works properly using third-party services.

Yes, additional efforts are required from the developer: they have to handle incorrect API behavior, sometimes they have to check receipts several times, they need their own server. Yes, you have to pay for analytics services. By the way, I have an article on habr about inexpensive analytics.

There is no doubt that Apple can improve the API, make a convenient developer account and provide analytics. It would seem that then you wouldn't have to deploy your own server and pay for analytics. Attention, a moment of disappointment: you will still have to. Because in reality, nothing will change.

And what about Google?

ЕIf you think developers only dislike Apple, I suggest you read this article from habr about why Android developers hate Google.

Multi-platform applications

For some reason no one writes about this at all. Here's a simple example. Let's say a user in his Android account paid for a subscription to a mobile app. Then he goes to the iPad app or opens the web version, reasonably assuming that the subscription will pick up and the content will be available everywhere.

But to do this, the developer needs to have a server with purchase validation, receipts, and account data synchronization on various platforms. There are many articles and instructions on how to set up such a server. The article on habr has a link to a source code, for deploying a server.

Of course, my arguments are irrelevant if you are creating an application for only one platform.

Okay, what about analytics?

The situation here is about the same. Let's say you have a great personal developer account with great shopping analytics in your Apple and Google accounts. So what? Purchase analytics is only a small part of the overall application metrics you need. It turns out that you can't get rid of analytics services anyway.

For analytics, I suggest taking a look at Snowplow, an open-source project for collecting events from an app. There is a detailed tutorialon how to set up Snowplow..

Interim conclusions

Regardless of Apple's efforts to provide developers with convenient and working tools, the situation will not change significantly. It is also obvious that the platform must still charge some commission on purchases.

Platform commissions

As you can see, the situation on all the platforms is more or less the same.

But Durov says that Android allows you to download apps from other stores and sources. Well, let's have a look at the statistics on the quality and safety of apps downloaded from third-party sources:

A cry of the soul

What bothers me much more is that Visa and Mastercard charge a fee of ~0.3% on all, absolutely all card transactions! But for some reason no one writes about it.

How to get rid of the commission from the store

ОThe answer is obvious: move customers to your web service to pay for purchases through your own server. All the more reason to develop it anyway. Your own server and web service consolidate all web and mobile purchases in one place. This allows you to manage them with greater flexibility.

The advantages of a server for accounting and purchase validation and out-of-the-box solutions

There are two great services to keep track of your purchases:

  • Apphud – saves iOS developers the trouble of dealing with auto-renewable subscriptions and helps reduce subscriber outflow.
  • adapty.io – allows you to track subscription events.

If these services do not cover your needs, try deploying your own server. It will take some time to set it up, but it will give you the options you need:

  1. Consolidation of accounts with purchases in one location
  2. Flexible purchase management
  3. Dynamic creation and modification of mobile app content
  4. Your own analytics
  5. Ability to make purchases without the 30% commission

As a result, the developer gets:

  1. User loyalty due to synchronization of purchases between devices and dynamic change of available paid and free content
  2. Reduced development costs due to dynamic content changes on the server side without the need to update the mobile app
  3. Reduced analytics costs;
  4. Increase in profit by reducing the fees from stores

Increase in profit by reducing the fees from stores. Self-promotion paragraph! In conclusion, I would like to add that we consult mobile app developers on creating a server, API and organization of their own billing absolutely free of charge.