Apple's Dynamic Shift in App Payments Creates Opportunities for PSPs

<p>In a strategic move to comply with the <a href="https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en">Digital Markets Act (DMA)</a> in the
European Union (EU), <a href="https://www.apple.com/newsroom/2024/01/apple-announces-changes-to-ios-safari-and-the-app-store-in-the-european-union/">Apple has unveiled a series of transformative changes</a> to
iOS, Safari, and the App Store. With over 600 new APIs, expanded app analytics,
and innovative options for processing app payments, these changes aim to foster
a secure and enhanced experience for EU users while opening new avenues for
developers.</p><p>The altered landscape introduces novel tools and terms for alternative app
distribution and payment processing, along with functionalities for alternative
browser engines and contactless payments. Developers now have the flexibility
to choose between existing business terms and embracing the new tools,
showcasing Apple's commitment to providing options for its diverse developer
community.</p><p>However, the expansion in processing payments and downloading apps also
raises concerns about potential risks such as malware, fraud, and illicit
content. To address these issues, Apple is implementing robust safeguards,
including Notarization for iOS apps, authorization for marketplace developers,
and enhanced disclosures on alternative payments. These measures seek to strike
a balance between innovation and user security within the constraints of the
DMA.</p><p>Developers are encouraged
to explore the new tools for alternative app distribution, payment processing,
browser engines, and contactless payments. Importantly, developers have the
choice to continue with the existing business terms if they prefer.</p><p>Other Changes</p><p>The alterations extend beyond the EU, with Apple introducing options for
streaming games globally and more than 50 forthcoming reports covering areas
like engagement, commerce, and app usage.</p><p>Changes to iOS in the EU include new options for distributing iOS apps from
alternative app marketplaces. Developers gain access to new APIs and tools,
enabling them to offer their iOS apps for download from alternative platforms.
Frameworks and APIs for creating alternative app marketplaces empower
developers to install apps and manage updates on behalf of others, fostering a
collaborative ecosystem.</p><p>Apple is also sharing DMA-compliant changes impacting contactless payments,
including new APIs for developers to use NFC technology in banking and wallet
apps. Users in the EU can now select a third-party contactless payment app or
an alternative app marketplace as their default.</p><p>On the App Store, developers with apps in the EU will witness changes
affecting various Apple operating systems.</p><p> New options for using payment
service providers (PSPs) within apps for processing payments are introduced,
offering developers flexibility and opening doors for PSPs to play a crucial
role. Additionally, new options for processing payments via link-out allow
users to complete transactions on developers' external websites, providing
developers with opportunities to inform EU users about promotions and deals.</p><p>In terms of business terms for EU apps, Apple is sharing new options,
necessitated by <a href="https://www.financemagnates.com/fintech/innovation-beyond-compliance-understanding-the-dma-dilemma/">the DMA's requirements for alternative distribution and payment
processing</a>. The new terms include reduced commissions, payment processing fees,
and a Core Technology Fee. Developers can choose to adopt these new terms or
stick to Apple's existing terms.</p><p>Apple is also offering developers <a href="https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/">a fee calculator tool</a> and new reports to
estimate the potential impact of the new business terms on their app
businesses. </p><p>Conclusion </p><p>Apple's strategic changes open up significant opportunities
for Payment Service Providers in the EU. The introduction of new options
for processing payments within apps, along with the flexibility for developers
to choose alternative payment processors, signifies a dynamic shift in the app
payments landscape. As developers explore these opportunities, PSPs are poised
to play a pivotal role in shaping the future of app payments in the EU.</p>

This article was written by Pedro Ferreira at www.financemagnates.com.