Paddle to launch alternative iOS in — app purchase system in response to Apple's fees

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In response to last month's Epic Games vs. Apple ruling, payment platform Paddle announced that it will launch an alternative in-app payment system for iOS that will replace Apple's in-app purchase mechanism.

Paddle's new payment system is a "true like-for-like, drop-in replacement" for Apple's in-app purchase mechanism, allowing developers to collect payments from customers without having to pay Apple a 15-30 percent commission on sales through App purchases, according to an emailed press release. Paddle will have a "highly competitive fee structure," with a 10% fee for transactions under $10 and a 5% plus $0.50 fee for transactions over $10, according to the company.

Paddle's payment system will provide access to customer data such as email addresses for communicating product news and offers, flexible pricing and subscription options, direct customer service, and more, in addition to lower fees.

Paddle posted a video on its website demonstrating an app with a "Upgrade Now" button that takes users to Paddle's online payment system. The user is then given the option of paying with Apple Pay, PayPal, or a credit card.

Paddle announced that developers can sign up for its in-app payment system starting today, and that the service will launch on December 7, 2021, in accordance with the terms of the Epic Games vs. Apple ruling.

Apple can no longer prohibit developers from "including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing," according to U.S. District Judge Yvonne Gonzalez Rogers' ruling. Apple must comply with the permanent injunction within 90 days of the judge's ruling, which was issued on September 10.

According to Paddle's interpretation of Rogers' ruling, Apple is unlikely to allow apps to offer alternative payment systems that bypass Apple's in-app purchase mechanism and/or fees. We've reached out to Apple for comment, and if we hear back, we'll update this story.

Alternative payment systems in apps, according to Apple, could expose users to privacy and security risks, including fraud.

Paddle, which was founded in 2012, claims that over 2,000 software companies use its platform to sell their products in over 200 markets around the world. Customers listed on Paddle's website include Setapp/MacPaw, Scrivener, AdGuard, Readdle, and others.

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Published to Apple Scoop on 7th October, 2021.