A Settlement Will Allow App Store Developers to Offer Payment Options Beyond Apple

Apple Inc. will permit developers of applications for its App Store to tell customers by email that they can pay for products and services by means other than Apple’s own payment platform, according to a preliminary settlement announced Thursday. The settlement apparently will let developers skirt what are said to be commissions ranging from 15% to 30% charged by Apple on such transactions.

Under the terms of the agreement, the latest development in a case the developers brought against Apple in the U.S. District Court for the Northern District of California in 2019, app makers still cannot communicate payment options via the app itself. Also, developers must obtain consumer consent for any options they use to charge consumers for apps or in-app products.

Other terms of the agreement require Apple to establish a $100-million fund to pay developers covered by the suit amounts anywhere from $250 to $30,000. It also requires wider pricing flexibility for app makers.

 “We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users,” noted Phil Schiller, the Apple executive in charge of the App Store, in a statement late Thursday.

While the settlement isn’t likely to hurt Apple itself in a major way, the availability of options beyond Apple’s own merchant account offers key flexibility to developers not previously available from the computer giant, experts say.

“It’s moving significant revenue out the of the Apple ecosystem and into the developer ecosystem,” notes Thad Peterson, a senior analyst at the AiteNovarica Group, a Boston-based financial-service consultancy. Indeed, he sees the case as representative of a larger trend now emerging in the payments industry. “There seems to be a migration from the payment processor to the source of value, the one who has the ability to manage the payment,” he says.