Developers in South Korea Can Offer Users Alternative Payment Systems through the App Store

BY Chandraveer Mathur

Published 30 Jun 2022

App Store

Apple has informed South Korean developers that they can finally offer users the option to pay using third-party payment systems. Previously, they were limited to using Apple’s own App Store billing system. The change is a result of a law in the country which bans app stores from binding developers to use their own billing systems.

Apple’s latest update for developers in South Korea starts off by saying the App Store is supposed to be a “safe and trusted place to discover and download apps.” It explains that the terms of the App Store laws have been changed this time to ensure the company’s app distribution mechanism is compliant with local laws.

The South Korean government recently modified the Telecommunications Business Act. The legislation was amended in August last year and is being enforced now. Unsurprisingly, Apple has appealed the South Korean antitrust law. The amendment dictates that companies operating app distribution systems in the country must offer alternative payment processing options. Understandably, the new law and change in App Store rules don’t change anything for developers who wish to continue using Apple’s App Store billing system.

“The Telecommunications Business Act in South Korea was recently amended to mandate that apps distributed by app market operators in South Korea be allowed to offer an alternative payment processing option within their apps. To comply with this law, developers can use the StoreKit External Purchase Entitlement. This entitlement allows apps distributed on the App Store solely in South Korea the ability to provide an alternative in-app payment processing option. Developers who want to continue using Apple’s in-app purchase system may do so and no further action is needed.”

That said, Apple cautions that apps that opt for third-party billing systems could lose out on some features, such as Ask to Buy and Family Sharing. Apple also absolves itself of any responsibility related to subscription management and refunds.

“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.”

Apple has also clarified that it will reduce its 30 percent commission on in-app purchases. So, developers need to pay the iPhone maker just 26 percent as a commission in South Korea if IAPs are processed by third parties. The company has qualified four payment providers — KCP, NICE, Toss, and Inicis. To switch to using third-party payment services, developers need to fill out a request form on the Apple Developer website.

To recall, Apple recently offered app developers in the Netherlands an option to offer third-party payment processing services for IAPs. However, the Dutch regulators found Apple’s requirements unreasonable and App Store changes insufficient to comply with the local law. In the EU too, the payment gateway restriction was one of the reasons behind the Apple vs. Epic Games lawsuit.

[Via Apple]