BenRiceM

I can’t help but wonder if the right move for Apple is to just get rid of the In App Purchase system and use Apple Pay instead.

Yes they’d lose money by getting ~3% instead of 15–30%

But they’d probably get big players like Netflix and Spotify back on board, and 3% of that business is better than none

Mar 7, 2024 at 1:17pmIvory for iOS
Show threadDimitri StancioffMar 7, 2024
@BenRiceM I believe Apple charges 3% but has to give much of that to Visa and Mastercard. If I recall correctly the percentage Apple kept was closer to a tenth of a percent.
Show threadSindarina, Edge Case DetectiveMar 7, 2024

@dstan @BenRiceM Yeah, the 2,9% is generally what you see quoted just for the credit card processing, which is just passing through on its way to the credit card company.

At 3%, Apple has basically no margins, although I wouldn't be surprised if they get a slightly better deal purely on volume, guarantees they're able to give the likes of Visa and Mastercard, etc.

And that's before you get to the fact that Apple likely eats the losses on chargebacks, disputes, and so forth. Small transactions having the least margin in total.

It sounds like a lot of money in aggregate, but I bet it's way less profitable than most folks assume.

Show threadDimitri StancioffMar 7, 2024
@sindarina @dstan @BenRiceM I bet that’s why Apple emphasized the anti-fraud protection at launch. By using generated numbers and passcode/faceid, they can have a lower fraud rate than a physical card, so the processing fee can be lower if they can show a reduced cost (and then keep more margin). And I bet they don’t eat the chargebacks: that’s what the 2.x% going to the CC companies is for.
Show threadSindarina, Edge Case DetectiveMar 7, 2024
@dstan @BenRiceM It's more complicated than the tech rags and lobbyists make it seem either way 😄
Show threadMatt BirchlerMar 7, 2024
@dstan @BenRiceM This is correct, Apple makes absolute slivers on Apple Pay transactions. The ~3% is split up amongst numerous parties, the card issues and acquirers being the biggest takers.
Show threadSam GrossMar 7, 2024
@BenRiceM they could probably shrink IAP to just games and on-device consumables and still make more money.
Show threadChuck O'Rourke:verified:Mar 7, 2024
@BenRiceM I assume big changes like this that may significantly alter profit big companies want to be able to tell Wall Street, “out of our hands”.