Should an App Use Apple Payment Platform or External Payment Links?

App developers with apps in the EU or US storefronts have two options for processing payments:

• Apple’s payment system
• External, third-party payment processors

What is Apple’s payment system?

The Apple App Store has a built-in payment system. The system is an all-in-one solution that can handle payment processing, tax compliance, fraud prevention, and chargeback management.

This service comes with a fee that varies by region and type of app.

In the EU, small businesses are charged a commission fee that is 10-12% of their revenue. Most high-volume apps are charged a commission fee that is 17% (iOS and iPadOS) or 27% (macOS, tvOS, visionOS, and watchOS) of their revenue. Businesses will also have to pay a 3% payment processing fee and some might be charged a 5% technology fee. Check our EU app store guide to learn more.

Outside the EU, most businesses are charged 30% of their revenue.

What are external payments or external payment links?

An external payment link allows you to route users to a website of your choosing — away from your app — for payment processing. Funds are processed via a merchant account with an acquiring bank — just like any other online business.

In most situations, your external payment links will replace Apple’s payment system. However, in select markets and app types, external links can be offered in conjunction with Apple payments.

If your U.S. storefront uses external payment links, Apple won’t charge you any commission or processing fees. Check our U.S. app store guide to learn more.

If your EU storefront uses external payment links, Apple will implement a complex fee structure that will charge 10-20% of your revenue. Check our EU app store guide to learn more.

At this time, other regional storefronts are not allowed to use external payment links.

Why would a business use external payment links instead of Apple’s built-in payment system?

• You can lower or eliminate Apple’s commission fees. In Europe certain merchants are experiencing a 69% reduction in fees when they switch to an external solution like AltoPay. In the U.S., Apple’s fees are basically nonexistent.
• You can increase conversions. With a traditional merchant account, you can offer alternative payment methods like local cash apps and digital wallets. This personalization can capture customers that could be turned off by Apple’s standard payment methods. Also, because you pay less in fees, you could lower your pricing — which would increase customer satisfaction — while making just as much or more than you would on Apple’s payment platform.
• You can increase earning potential. You can use your website for specialized offers and promotions that wouldn’t be possible via Apple’s platform. For example, you could explore bundle and save packages, free trials, volume discounts, upsells and cross sells, and much more.
• You can gather more data. Website checkouts give you direct access to customer data — data that wouldn’t be made available if payments were processed via Apple’s platform. Not only do you get standard checkout data like email address and location insights, you can also gather valuable marketing intelligence. For example, discover which offer or promotion was most successful so you can accurately measure important metrics like return on ad spend (ROAS).
• You will receive your revenue quicker. Traditional merchant accounts usually have a faster payout than Apple’s payment platform.
• You should have fewer chargebacks. All Apple payment system purchases have the same generic billing descriptor: apple.com/bill. So on a user’s credit card statement, a purchase made with your app will appear the exact same as purchases made with other apps. This can cause confusion and uncertainty. Users could forget purchases, incorrectly assume fraud, and file unwarranted chargebacks. But if you have external payment processing, you can set your billing descriptor to be something very specific and easy to understand — which reduces the risk of chargebacks. Plus, if you process payments with Apple, Apple will handle all your chargeback management responsibilities. Because chargeback management isn’t their primary focus, you may have subpar results. But if you manage risk yourself — or work with a chargeback expert like AltoPay — you will have more control, better results, and unparalleled ROI.

These are just some of the potential benefits. Because these policies are so new, there are probably even more perks that are yet to be discovered.

If you’d like to discuss the pros and cons of external payment links, let us know. Our team would be happy to provide customized insights that are specific to your business.

One of the biggest selling features of the Apple payment system is that it is an all-in-one solution. Apple can help you process payments — while also tackling customer service issues, complying with tax laws, preventing fraud, and managing chargebacks.

However, you’ll pay a lot of money for Apple to manage those responsibilities for you.

A more cost-effective option is to switch to external payment processing with a solution provider that can replace — possibly even improve upon — the services Apple used to provide.

With the right payment experts, you can easily…

• Comply with region-specific tax requirements
• Add fraud detection and chargeback management solutions to your payment stack
• Manage customer service issues
• Maintain PCI-DSS security standards

Again, the key is finding the right solution provider to pick up where Apple leaves off. AltoPay can help you create a payment tech stack that is just as complete as Apple’s — with greater efficiency, lower fees, better support, and outstanding results. Reach out to our team today.

The longer you stay with Apple’s payment system, the more you’ll pay in fees. It’s time to take control over your business, and start boosting your bottom line.

Fill out our interest form, and get started today!