Apple allows Apps in South Korea to use Third-party Payment Systems

Developers of apps released in Apple’s South Korean App Store no longer have to use the company’s in-app payment system, the iPhone maker has announced in a developer update.

Instead, developers can take payments using the third-party service providers pre-approved by Apple.

The change comes in reaction to an amendment to South Korea’s Telecommunications Business Act passed last year, preventing large platform holders like Apple and Google from forcing developers to use their first-party in-app payment systems. Both Apple and Google opposed the legislation, with Apple arguing that it would make it harder for its users to manage their purchases, undermine their privacy protections, and put them at risk of fraud.

Crucially, the law threatens the lucrative commission that Apple charges developers to use its in-app payments system. This so-called “Apple tax” is up to 30 percent of the price paid by the user and has been the focus of many developer complaints over the years. But although South Korea is forcing Apple to allow developers to use alternative payment systems, Apple still intends to collect a commission of 26 percent for payments made through third-party systems. Moreover, its documentation notes that developers will be required to report all sales to Apple each month and will then need to pay the commission.

To use third-party payment systems, interested developers will need to submit a form to Apple to request access to the “StoreKit External Purchase Entitlement,” which is only available to apps distributed exclusively in South Korea. If an app is available globally, developers must submit a separate app binary “that is distributed solely on the App Store in South Korea.”

Apple also says alternative payment systems cannot be used “in the same app with Apple’s in-app purchase system,” and purchases must be completed within the app rather than linking to a web view. Combined, these arguably restrictive rules could dissuade many app developers from taking advantage of third-party payment systems. However, “Developers who want to continue using Apple’s in-app purchase system may do so, and no further action is needed,” Apple’s notice reads.

South Korea isn’t the only market where Apple’s control over in-app payments is being chipped away. The Dutch competition regulator, the Authority for Consumers and Markets (ACM), has ordered Apple to allow dating apps — and only dating apps — to use alternative in-app payment systems. Apple’s solution, which the ACM recently accepted as sufficient, was based around a similar StoreKit External Purchase Entitlement to the one the company is rolling out in South Korea.

But the most significant challenges to Apple’s control over app distribution and in-app payments are yet to come. The European Union’s upcoming Digital Markets Act (DMA) contains provisions to force Apple to allow users to install apps from third-party sources and enable App Store developers to use alternatives to Apple’s payment systems. Meanwhile, in the US, a judge ruled last year that Apple must allow other forms of in-app purchases, although the ruling was later put on hold pending appeal.

Running a business involves tasks and probable difficulties, even for the most profitable companies. One of the many conditions that small and medium-sized businesses (SMBs) encounter is payment processing. Appreciations to checks, credit cards, and debit accounts, the daytimes when cash was king are gone.

This is the age of digitization and seamless payment processing, offline and online. But the digital development of payment processing doesn’t have to be difficult for a brick-and-mortar retailer or small business owner. On the contrary, it can simplify life for customers, merchants, and third-party players in a transaction.

One of the best ways to streamline your revenue stream is to utilize a third-party payment processor.

Third-party payment processors are entities that permit merchants to take online or credit card payments without the requirement to set up their merchant accounts.

Third-party payment processing business entities desire to make it as easy as possible for merchants to run their business, have simple payment rushes, and conduct transactions. As a result, you won’t have to worry about setting up or maintaining a merchant account. Instead, you can create an account with a third-party payment processor and have all your transactions through them.

Many businesses have merchant accounts with merchant services providers. When their clients step through the door and create a debit card to buy through a point-of-sale system, companies with this type of account can receive payments directly through their merchant account and be done.

However, this isn’t always the most economical payment method for some starting businesses. It takes time and struggles to interface with merchant account providers, and if your business is still in its earlier start-up stage, your time can be better spent doing other things.

It is where a third-party payment processor comes into play. Instead of having your merchant account, which often comes with setup costs, you’ll instead work with a third party who has a relationship with a merchant services provider, essentially serving as an intermediary.

A well-known instance of a third-party payment processing company is Square, which permits you to sign up and begin accepting debit card payments on the very same business day.

By employing a third-party payment processor, you’ll be bypassing the step of having your merchant account at a bank. Instead, these companies allow customers like you to use their merchant accounts to process all of your debit card and credit card payments. Consequently, your customers’ payment information will be reviewed by the processor, along with running through various anti-fraud measures before they let the completion of your client’s transaction.

These payment processing businesses can run debit cards, conduct credit card processing, and even serve as an online payment processors so you can boost your business to the digital realm. It helps to perform with credit card processors and those who process payments online because it can increase the pool of buyers for any business.

It would benefit if you had a dependable way to process payments as a small business owner. Third-party payment processors can make your first incursion into accepting credit cards a simple process with minimal hassle. So if you’re aiming out your first merchant processor or finally understand how to make a more informed decision, you’re on your way to reduced card processing fees and an all-around better payment experience.