Apple Backs Alternate Payments System in South Korea

Apple plans to allow alternative payment systems in South Korea to put the tech giant in compliance with a law that took effect in September banning app store operators from requiring use of their own in-app payment systems, the Korea Communications Commission said Tuesday (Jan. 11). 

Google said in November it will offer an alternative payment system on its app store in South Korea at a slightly reduced service charge to abide by the new law, according to a report in The Korea Herald. Apple will provide an alternative payment system at a reduced service charge, compared to the current 30% charge, it told the commission. Apple will discuss implementation with the KCC. 

“We look forward to working with the KCC and our developer community on a solution that benefits our Korean users,” Apple said in a statement. 

“Apple has a great deal of respect for Korea’s laws and a strong history of collaboration with the country’s talented app developers. Our work will always be guided by keeping the App Store a safe and trusted place for our users to download the apps they love,” the company statement says. 

App store operators will face a fine for forcing developers to use their own in-app payment systems, according to the KCC. South Korea was the first country to stop Big Tech companies from requiring use of their in-app billing systems, but more countries are now looking into how to curb or eliminate them. 

Related: Apple: Developers Raked in $260B from App Store Since 2008 

App Store developers have earned $260 billion from the Apple App Store since it launched in 2008, including about $60 billion in 2021. 

Apple’s commission of 15% or 30% on apps sold exclusively in its App Store has been in the spotlight of controversy in the U.S. and abroad, thanks to ongoing lawsuits by Epic Games, maker of the interactive streaming game Fortnite. 

The App Store’s global platform connects businesses with more than 600 million people each week across 175 countries.  

An independent study by economists from the Analysis Group — A Global Perspective on the Apple App Store Ecosystem — indicated that small developers (less than 1 million downloads and earning under $1 million annually from all apps) on an international scale grew 40% since 2015 and comprise over 90% of App Store developers.