Apple allows third party app stores and a new payment policy in the EU starting March 2024
Apple has announced a number of major changes, the biggest since the App Store launched in 2008. In response to the EU's new Digital Markets Act (DMA), Apple presented plans for iOS in the European Union, taking effect in March.
Third party app stores (side loading) enter the scene
With the iOS 17.4 update, the App Store's exclusivity is being broken. For the first time, third party app stores will be allowed on iOS, letting users explore alternative app marketplaces. However, iOS apps offered through alternative app stores still need to go through a notarization process similar to that for Mac apps. This process includes checks for accuracy, functionality, safety, security, and privacy. The goal is to protect users from viruses, malware, and fraud. The notarization system provides baseline protection, and while it can't match the App Store's strict review process, Apple still wants to give users information at a glance, so they can make an informed decision about installing apps from alternative app stores.
From 30% commission to 20%
Developers get new options when it comes to payment services. They can use Apple's payment services, or choose to integrate a third party option (such as Mollie) at no extra cost to Apple. If a developer wants to stick with Apple's existing in app payment system, an additional 3% processing fee will apply.
For developers in the EU, Apple offers flexible commission options. Apps distributed through a third party app store that also use a third party payment system won't owe Apple any commission on in app purchases. For apps in the Apple App Store using an alternative payment system, the commission is 17% on digital goods and services, with a further reduction to 10% for eligible apps.
Want to know what the costs will be for your app starting in March? Use this handy tool!
The payment changes in short:
- Reduced commission: iOS apps in the App Store will pay a reduced commission. For the vast majority of developers, and for subscriptions after the first year, the commission is 10 percent. For transactions involving digital goods and services, the commission is 17 percent.
- Payment processing fees: iOS apps in the App Store have the option to use the App Store's payment processing service for an additional 3% fee. Developers can also use a payment service provider within their app, or direct users to their website for payment processing, at no extra cost to Apple.
- Core Technology Fee: iOS apps offered through the App Store and/or an alternative app marketplace pay €0.50 for each first annual install per year above a threshold of 1 million.
Alternative browsers & NFC
Alongside opening up to alternative app stores, Apple is also introducing other major changes to the iOS ecosystem for the EU. Alternative browsers besides WebKit will be allowed, and users will be able to choose from different browsers when opening Safari on iOS 17.4. Global game streaming services are also being welcomed into the App Store, and developers in the European Economic Area will soon be able to offer NFC payments within their apps.
What does this mean for app owners and app marketing?
These recent announcements will bring changes for you as an app owner as well as for app marketing. In particular, app owners with subscriptions will now pay just 20% commission in the first year instead of 30%, followed by a further reduction to 13% in subsequent years.
The introduction of third party app stores and payment flexibility gives developers new distribution channels and competitive opportunities. Users benefit from a wider range of apps, which increases competition between apps.
This announcement also marks a shift in the app marketing landscape. With the rise of new app stores come new ASO ranking factors. More information on this will follow later, we'll keep you posted!
An exciting step following the DMA
This is an exciting step forward following the adoption of the Digital Markets Act (DMA) in 2022, through which the EU aims to tackle the anti competitive practices of major tech companies. The DMA requires access to third party apps and stores, the removal of default apps, and prohibits favoritism within app stores. Apple's adjustments, including the new commission rates, are being closely scrutinized by critics such as Spotify and Epic Games, who are challenging the "Apple Tax." The impact on user preferences for alternative app stores and payments in the EU remains uncertain.
Want to know more? Read the full article from Apple.
