Apple gives in to South Korea, enables third-party payments for app developers

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Apps that are distributed "solely in South Korea" can now include their own in-app payment system, but Apple will block certain App Store features if they do — and will still take a 26% cut.

Following South Korea's introduction of new laws regarding app stores, Apple has now formally allowed developers to adopt their own in-app payment systems. Instead of all payments going via Apple and its own App Store, developers can choose alternatives — but with conditions.

In a new support document for developers, Apple says qualifying developers can use what it calls its StoreKit External Purchase Entitlement feature.

"This entitlement allows apps distributed on the App Store solely in South Korea the ability to provide an alternative in-app payment processing option," says Apple. "If you're considering using this entitlement, it's important to understand that some App Store features, such as Ask to Buy and Family Sharing, will not be available to your users, in part because we cannot validate payments that take place outside of the App Store's private and secure payment system."

"Apple will not be able to assist users with refunds, purchase history, subscription management, and other issues encountered when purchasing digital goods and services through an alternative purchasing method," it continues. "You will be responsible for addressing such issues."

The benefit to qualifying developers is that instead of paying Apple 30% of every transaction, they have to pay all of the payment processing costs themselves. Acknowledging that, Apple reduces its fee — but it does not remove it.

"Apple will charge a 26% commission on the price paid by the user, gross of any value-added taxes," says the further detailed developer documentation. "This is a reduced rate that excludes value related to payment processing and related activities."

Developers have to report all sales monthly. "Please note that Apple has audit rights pursuant to the entitlement's terms and conditions," says Apple's documentation.

"Failure to pay Apple's commission could result in the offset of proceeds owed to you in other markets," it continues, "removal of your app from the App Store or removal from the Apple Developer program."

The move follows Apple's previous responses to the South Korean law, which authorities there described as insufficient.