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In-App Purchase Guidelines for Apple and Google Pay

by Keshav Jeet, on Jun 8, 2020 7:28:33 PM

With mobile phones being the foundation of the digital era today, apps are becoming strong drivers of monetary gains for enterprises. Be it retail apps, video games, puzzles, or any other service apps, in-app purchases have become a whole new revenue stream for the business.

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In-app purchases enable users to get access to special and premium content through a unique pre-defined pricing model by the app owner. Enterprises or individuals can use in-app purchases to sell content, subscriptions, services, or functionalities. These can include Digital books or photos, additional game levels, access to a turn-by-turn map service, subscriptions to digital magazines or newsletters etc. Owners can also promote in-app purchases directly on the App Stores, increasing discoverability for the content found inside their app. Users can browse in-app purchases directly on the App Store and start a purchase even before downloading the app.

While these app stores empower publishers, as well as enterprises, to broaden their presence and cater to a much larger audience as compared to their offline counterparts, there are various hurdles that come along in the form of best practices, high commission costs, and rules to follow. Apple, as well as Google play store, has some guidelines laid down for the developer communities that need to be strictly adhered to, or else apps may encounter rejection or monetary loss.

For a seamless continuity of app store usage, it is important for mobile app development consultants to take special note of the guidelines that Apple and Google have for in-app purchases. Let’s look at them one by one:

Apple Store

  • App Store does not let app owners use their personal identification mechanisms like license keys, augmented reality markers, QR Codes, etc. to let users unlock the content or functionalities. Apps as well as their metadata are not allowed to have call-to-actions or external links that can direct users to purchase mediums except for the in-app purchases.
  • Apple allows the publishers to use in-app purchase currencies to enable customers to “tip” digital content providers in the app.
  • The credits or in-game currencies that customers buy through in-app purchases do not expire, and publishers need to have a restore mechanism in place for any restorable in-app purchases.
  • Make sure to assign the right purchasability type in your app, or else it will be rejected. You have to choose between a Consumable, Non-Consumable, or Non-Renewable or Auto-renewable purchasability type.
  • Enterprises also have the liberty to enable gifting of items eligible for in-app purchases to others. These gifts, however, are refundable only to the original buyer and are not exchangeable.
  • Apps distributed via the Mac App Store are allowed to host plug-ins or extensions that are enabled with mechanisms other than the App Store.
  • Apps offering “loot boxes” or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase.
  • Non-subscription apps are allowed to offer a free time-based trial period before presenting a full unlock option by setting up a Non-Consumable IAP item at Price Tier 0 that follows the naming convention: “XX-day Trial.” Prior to the start of the trial, the app must clearly identify its duration, the content or services that will no longer be accessible when the trial ends, and any downstream charges the user would need to pay for full functionality.

Google Playstore

  • Developers offering products inside a game app on Google Play or providing paid access to the contents of the game are required to use Google Play In-app Billing as the default method of payment.
  • Developers offering products inside apps belonging to any other category of the app on Google Play are required to use Google Play In-app Billing as the payment method, except for when:
    1. Payment is exclusively for physical product.
    2. Payment is for digitally consumable content on any platform such as songs that can be streamed on any software.
  • In-app virtual currencies are mandated to be used inside the app or game for which they were originally bought.
  • Developers must not give wrong or disguised information about the apps or in-app services, content, goods, or functionalities. You have to be transparent about any in-app features that require additional charge, and notify your users about the payment.
  • If your App has mechanism to offer random virtual items from purchase, you must clearly highlight the chances of users receiving those items before the purchase.
How to avoid paying high app-store fees for your in-app purchases?

Apple charges $99/year as a developer fee. Google Play has a one-time registration fee of $25 after which you can upload your app. The industry standard for how much income app stores take from the entire revenue through in-app purchases is 30% which goes to distribution partners and operators. For Google Playstore, As of January 1, 2018, the service fee on subscription products is minimized by 15% for the subscribers who stay with you after 12 paid months. Here are some ways that you can use to avoid paying these high-commission costs:

1.   Use HTML or a web app rather than a native Apple or Google app for your digital publication. Sell the subscription directly to your subscribers. In this scenario, a subscriber creates an account with you the publisher, and purchases a subscription from your website. This has a number of benefits for both enterprises as well as the subscriber: 
  • Enterprises will get all the revenue.
  • The subscriber will be able to access and read it on any device
  • Enterprises will be vigilant of their subscriber list as they will have their own database which is not possible with an apple store as there is no way of finding out who your subscribers are.
2.  Another way to avoid paying commission for your user content is to offer it free of cost. In an advertiser-funded model, where your finances can be met by selling the advertising space on your platform or app, it doesn't make sense for you to charge readers for your digital publications. Hence you can avoid paying commission that way. In case, you are selling a service there is no way but to have a personal native website for it to escape paying high commission costs.


Amazon is the best epitome of this personal subscription model. Amazon’s iPad Kindle Store is a web application that looks like a native app. Users can look up eBooks on their iPad, though users have to buy it through the Amazon store app and then use it on their Kindle app. This way Amazon avoids paying exorbitant commission to the app stores.

Conclusion

There is a huge scope of earnings in pursuing multiple stores for your apps, but there is a price to pay. Every market that you use to sell your products will take a cut on your sales, which simply is a cost of doing business in the landscape of mobile app development. Any additional revenue streams through a third-party platform will mandate you to pay a cut on your earnings, which by all means is legitimate. Hence, with a little care and expertise from experienced app developers, you can strategize your in-app purchase models to lower your commission costs and access new revenue streams and user base.

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Topics:in-app purchases applein-app purchase android

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