Apple · IOS

Does Apple Always take a 30% cut?

Bilal Memon

May 4th, 2015

Hey Guys, 

So I was reading Apple's guidelines for in-app purchases. If one creates a website for the user to login and purchase a subscription plan for an iOS App, and then user logs in to the iOS App after purchasing a subscription, does Apple take a 30% cut in this scenario? I was reading Apple's guidelines and it says the following below but it's not clear at all. Would love your help. 

For 11.1---> What if users buy a subscription on the website for the iPad app?

Jake Savin Senior Technologist and Team Leader

May 4th, 2015

There are some important things you should pay attention to:
  • Take care and consult an expert if you decide not to use Apple's in-app purchase system (IAP), and want to link to your own system. My understanding is that they may reject apps that link to another payment system directly.
  • If you have a subscription model and need to provide subscription-based services on other platforms (web, Android, desktop), you will need some kind of account or identify system to track subscription status even if you use Apple's IAP. Without this the subscriptions will be specific to the user's AppleID and won't transfer to other devices/platforms. There is some complexity here, but it's not insurmountable. 
  • If you implement your own system, that will have some cost and complexity to implement, plus ongoing costs to maintain servers, and also a percentage you're going to have to pay to payment processors.  Don't forget about taxes and currency conversions. Apple handles all of that for you, which along with the very streamlined user experience are great reasons to use their system even with the 30% overhead.
In short, for a new, MVP a product it would be hard to advise you to not use the Apple IAP system.

John Anderson

May 4th, 2015

In the scenario you described, Apple would not take a cut because you're not using any in App purchases, or in App subscriptions, etc.  Whenever Apple sees an app with a username/login screen, they automatically think that this is an attempt to do exactly what you are describing.  Sometimes they just need some info on why you have the login screen and why it's appropriate.  An approach might be to submit the app and get it approved and in the store before you implement any kind of payment on the website.  If there is no payment options on your website and no evidence to suggest you are trying to bypass their cut, then you'd probably have a better chance.

Rick Stratton Great States Software / Feed.Us / MKEcribs

May 4th, 2015

A good model for you might be the ESPN apps. They offer a freemium subscription based "Insider" that people sign up for and pay for on and then they have free apps in iOS and Play stores.

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

May 4th, 2015

You haven't defined a business model here, so it's difficult to suggest anything useful. Rather, all you've described is a way to circumvent paying a commission to the platform that hosts your app and helps promote it and drive traffic to it.

Are you aware that you don't need to use the AppStore to distribute iOS or OS X apps? Apple has provisions for hosting apps on your own server. Corporations do it all the time for their in-house apps. 

If you haven't heard of any of those tens of thousands of apps, well ... they don't want to pay Apple to promote them on the AppStore either.

Sanjay Jadhav CEO | CTO | Co-Founder | 5+ Startups | Technopreneur | Product Innovation | Creative | Strategist

May 5th, 2015

Any in-app purchase would be liable for payment to Apple.  We develop and deploy numerous apps and it all depends on your business model.

We have similar model for our own App which is free in the Appstore and we charge subscription externally but our purpose was not to circumvent Apple's commission, its just the way our business model works.

Vivek Ghai Entrepreneur, Founder & CEO Panacea Infotect I Startup Enthusiast I Outsourcing

May 4th, 2015

Apple does not take any commission if you do NOT use in-App purchase to get the payments. You can use any third party payment processing and allow the user to use the full App functionality. 

The best is to use both in-App purchase and a third party payment processing as it gives users a choice for payment. 

In your mentioned scenario if you ask the user to pay on the website and then allow him to use the App, then you do not need to pay anything to Apple as the purchase is made online. We have used similar approach in our projects, in case you want to know more you can contact me.

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

May 4th, 2015

John, what you're saying is accurate; what we cannot judge with any certainty is whether the OP's business model fits within the structure of the Enterprise model or the consumer model.

A website for the user to login and purchase a subscription plan for an iOS App, and then user logs in to the iOS App after purchasing a subscription is not a BUSINESS MODEL. It's simply one step of a bigger pipeline that, from its face, is little more than an effort to bypass paying Apple a commission.

Unfortunately, a forum like this is not very good for this task -- the OP's initial approach is not appropriate for helping him resolve his issue. Any answer to his question does not get him closer to a solution, because it's the wrong question.

If a business model was implied, it's simply, "How can I avoid paying Apple 30% of my sales?"

Everybody -- Apple, Google, and Microsoft (and more to come) -- all want a piece of the revenue streams generated from apps sold through their marketplaces. That has not kept businesses from making money that leverage mobile apps that don't make ANY sales through these platforms!

Thus, a better question is, Can this business model [explained below] support the distribution of free apps on the various app stores?

So the fact that there are already MANY businesses successfully selling services coupled to apps that are free IS the answer to his question, "does Apple take a 30% cut in [any given] scenario?"

Unfortunately, his next question is, "How?" Well, that's where the business model comes in. HINT: it's not built around cutting the marketplaces out of their commissions. His stated scenario (ie., business model) is simply insufficient to extrapolate anything from.