Apple lets apps in South Korea use third-party payment systems

Illustration by Alex Castro / The Verge

Apple has announced in a developer update that they no longer have to use their own in-app payment system. Developers will be able to use third-party service providers that have been approved by Apple.

An amendment to South Korea's Telecommunications Business Act passed last year prevents large platform holders from forcing developers to use their first-party in-app payment systems. Apple argued that the legislation would make it harder for its users to manage their purchases and put them at risk of fraud.

The commission that Apple charges developers for using its in-app payments system is at risk. The 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. South Korea is forcing Apple to allow developers to use alternative payment systems, but Apple still plans to collect a commission for payments made through third-party systems. According to its documentation, developers will have to pay a commission for every sale they make to Apple.

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." If an app is available globally, developers will need to submit a separate app that is distributed only in South Korea.

It is not possible to use alternative payment systems in the same app with Apple's in-app purchase system. Many app developers will not be able to take advantage of third-party payment systems if these are combined. According to Apple, developers who want to continue using the in-app purchase system can do so.

In-app payments are being taken away from Apple in other markets. The authority for consumers and markets in the Netherlands ordered Apple to allow dating apps to use alternative in-app payment systems. The solution Apple was able to come up with was based on a similar StoreKit External Purchase Entitlement to the one the company is rolling out in South Korea.

The biggest challenges to Apple are yet to come. Provisions to force Apple to allow users to install apps from third-party sources and allow App Store developers to use alternatives to Apple's payment systems are included in the European Union's upcoming Digital Markets Act. A judge in the US ruled that Apple must allow other forms of in-app purchase, but the ruling was put on hold pending appeal.