Apple forced to agree to offer alternative payments in South Korea based on the legal requirement

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The problem of forcing the use of the in-app purchase system and charging a commission in the Apple App Store has attracted a lot of attention. The most thorough thing is that South Korea directly solves the problem through legislation. South Korea promulgated a new version of the Telecommunications Business Act last year requiring app stores to provide alternative payments, that is, app store developers cannot force developers to use the in-app purchase system. Now Apple has decided to agree to abide by South Korea’s legal requirements, and of course, the new South Korean Telecommunications Business Act also applies to the Android system’s Google Play Store. It’s worth noting that although Apple allows developers to use alternative payment systems, it still charges a percentage of the cost of subsidizing store operations.

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“The App Store” by Glen Bledsoe is licensed under CC BY 2.0

According to South Korean media reports, South Korea’s telecom regulator announced that Apple will allow South Korean developers to use alternative payment systems in order to comply with South Korean legal requirements. App store operators are legally required not to mandate the use of their own in-app payment systems, and Apple responded by offering special discounts. For example, developers whose annual income does not exceed 1 million US dollars only need to pay a 15% commission. This policy applies to developers in all markets around the world, not only South Korea. In South Korea, Apple will provide an alternative payment system based on legal requirements, and developers can choose an alternative payment system to replace Apple Pay according to their needs. Apple said that the company complies with South Korean legal requirements and that Apple will always strive to provide consumers with the apps they love and ensure the best security.

Although Apple allows developers to use alternative payment systems, it still takes a percentage of the fee, which is effectively the same work that Google is doing. After all, the app store needs to develop, provide server support, security monitoring, manual review, and other expenses, so developers cannot distribute it completely for free. Google’s option for Korean developers is to use Google Pay to pay a 15% cut (was 30%), and an alternative payment system to pay a 4% cut. That is to say, developers can make more money when the cost of using a third-party payment system is controlled within 11%. Otherwise, it is better to directly use Google’s in-app purchase system. Apple is not yet sure what the specific percentage will be. It is reported that Apple is currently communicating with South Korean regulators to determine the most appropriate percentage.

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