Paddle to Launch an Alternative to App Store’s IAP System with Lower Fees

iPhone App Store

Paddle has announced its plans to launch an alternative in-app payment system to replace Apple’s built-in IAP system for the App Store.

For the unversed, Paddle is a SaaS business that was founded in 2012. It claims to have over 2,000 software businesses dependent on its platform for sales in 200+ markets around the world. Its clients include the likes of Setapp/MacPaw, Scrivener, and AdGuard.

The platform describes its payment system as a “true like-for-like, drop-in replacement” for Apple’s IAP system. Paddle’s system allows developers to collect payments without giving Apple a 15-30 percent commission.

Paddle promises that its fee structure would be “highly competitive,” with a 10 percent fee for transactions under $10 and a five percent plus $0.50 fee for transactions over $10. The platform says that its payment system would include access to customer data such as email addresses. This would help developers communicate product news, offers, flexible pricing and subscription options, direct customer service, and more. Apple’s IAP doesn’t offer this level of transparency to developers.

In a video on its website, Paddle demos an app with an Upgrade Now button that redirects to Paddle’s payment system on the web. Users can then choose from one of the many payment options including Apple Pay, PayPal, and credit card.

Starting today, developers will be able to register their interest in Paddle’s IAP system. It is set to go live on December 7 this year. Paddle’s move is in response to the recent Epic Games vs. Apple ruling. The US District Judge who ruled on the lawsuit said:

Apple can no longer prevent developers from “including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing.”

Our Take

Clearly, Paddle has a bold interpretation of the ruling and is making rapid strides in that direction. However, we believe it is unlikely that Apple would bow so easily and forgo the commission it earns from IAPs. Do you think Apple would let Paddle proceed unhindered with the new IAP system?

[Via Paddle]