Epic skirts Apple's 30% commission fee by implementing 'direct' payments

Posted:
in General Discussion
Epic just announced a permanent price drop for V-bucks and other digital purchases, but there's a caveat for mobile players -- Fortnite players on both iOS and Android will need to pay Epic directly.

Epic skirts Apple's 30% commission fee by implementing 'direct' payments


Epic's ongoing fight against Apple's App Store commission fees continues. The company has instated a permanent price drop to all digital purchases for Fortnite, provided they do not pay through Google or Apple.

"Currently, there are no savings if players use Apple and Google payment options, where Apple and Google collect an exorbitant 30 percent fee on all payments," Epic says. "If Apple and Google lower their fees on payments, Epic will pass along the savings to players."

Players can pay Epic directly through both the iOS and Android app, though it's not clear how this is possible. According to the company's FAQ, as pointed out by The Verge, they believe they're in the right.

"Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

While it may be true that the companies mentioned above don't have to pay the 30 percent transaction fee, there's an important distinction to be made. Companies like DoorDash, McDonald's, Uber, and Best Buy provide users with physical goods.

Epic, on the other hand, sells digital goods. Apple charges a 30 percent transaction fee on all one-time digital payments. It remains to be seen if either Apple or Google will take action against Epic for this move.

Epic also assures customers that these sorts of payments are every bit as secure as the ones processed through Apple.

"In operating Fortnite on open platforms and operating the Epic Games Store, Epic has processed over $1,600,000,000 of direct payments successfully, and uses industry-trusted encryption and security measures to protect customer transactions."

Epic has long fought back against Apple's commission fee on digital goods, joined by companies like Spotify.

Companies like Epic and Spotify are not the only ones concerned about Apple's App Store practices. The U.S. Department of Justice and state attorneys general begun launching an antitrust investigation into Apple's App Store after developers continue to raise concerns over anticompetitive behavior.

In June, the European Union antitrust authorities officially launched two investigations into Apple, specifically surrounding the App Store and with Apple Pay.
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Comments

  • Reply 1 of 59
    SpamSandwichSpamSandwich Posts: 33,408member
    Time to kick Epic off the App Store. 
    aderutteromar moralesleavingthebiggericthehalfbeeBeatstmaywatto_cobra
  • Reply 2 of 59
    MacProMacPro Posts: 19,426member
    Epic: 'We have our cake and we eat it too.'
    edited August 2020 williamlondonwatto_cobra
  • Reply 3 of 59
    MacPro said:
    Epic: 'We have our cake and we eat it too.'
    Pretty much. Why are they on the store in the first place? Access to the huge base of customers it provides.
    omar moralesmac_dogSpamSandwichBeatstmaywatto_cobra
  • Reply 4 of 59
    This is a clear violation so they should have the apps remotely disabled.
    omar moralesmac_dogSpamSandwichbloggerblogwatto_cobra
  • Reply 5 of 59
    Of course, Epic will not be discounting direct sales by the 30% they pay Apple, otherwise, they wouldn't do it. I'm not sure how they're getting away with this scheme right in the App Store, but Apple really needs to boot them off! Let them invest in advertising to the millions, if not billions of people who get their software from the Apple, and even though they're an established, major gaming platform, there's no way they'll be able to reach nearly as many as would have found them on the App Store. They're a well-known entity to devout gamers, but will lose exposure to new or more casual gamers who don't know them from Adam! Good luck in your efforts to sabotage Apple……I predict abject failure. 
    fotoformatomar moralesmac_dogmwhiteBeatstmaywatto_cobra
  • Reply 6 of 59
    mjtomlinmjtomlin Posts: 2,486member
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    Is that what you think? Haha. 
    These types of developers are nothing more than parasites.

    Look, I get it and think Apple needs to do something about how the App Store is run, but these developers who want what amounts to a free ride are just being greedy and stupid. It is App Store revenue that allows Apple to give away free OS upgrades, which in turn allows Apple to push the platform (and developers) forward.

    Maybe Apple should create tiered fees for their Developer Program?
    $99/year to develop apps sold through the App Store - Apple gets their 30% cut. Basically the same as it is now.
    $999,999/year to develop apps sold via 
    outside payment system - Apple gets nothing extra.

    Some of these larger developers could easily cover a million a year. And smaller developers can still start with a hundred dollar fee and if/when their app takes off, switch to the higher tier.

    edited August 2020 omar moralesBeatsFileMakerFellerwatto_cobraDetnator
  • Reply 7 of 59
    tyler82tyler82 Posts: 974member
    Looks like developers found a loop hole to get out of paying "taxes."

    Uh-oh, Apple apologists are stuck in a quandary on this one!
    williamlondon
  • Reply 8 of 59
    mjtomlinmjtomlin Posts: 2,486member
    tyler82 said:
    Looks like developers found a loop hole to get out of paying "taxes."

    Uh-oh, Apple apologists are stuck in a quandary on this one!

    Umm, nope. This isn't a "loop hole", it's blatant violation of the developer agreement. Did you read the article?
    omar moralesmac_dogmwhiteSpamSandwichleavingthebiggwilliamlondonericthehalfbeeBeatstmayrandominternetperson
  • Reply 9 of 59
    Kicking Fortnite out of the App Store is what Epic wants. That Apple allows direct payments for other apps but not them would play a huge role in any lawsuit that they file. Though the columnist is making a distinction between physical and digital goods, a case can be made that such a distinction is arbitrary and self-serving.

    That said,  I wish that Epic Games would not do this. There is no evidence that either Epic or their consumers are hurt by the 30% fee. A small, struggling indie company would have a better standing to make this case, not the #1 gaming title in the world for the last 3 years. Besides Epic can be accused of wielding its own market position in a dubious manner, and should were this unnecessary dispute get that far.
    edited August 2020 williamlondon
  • Reply 10 of 59
    croprcropr Posts: 1,053member
    mjtomlin said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    Is that what you think? Haha. 
    These types of developers are nothing more than parasites.

    Look, I get it and think Apple needs to do something about how the App Store is run, but these developers who want what amounts to a free ride are just being greedy and stupid. It is App Store revenue that allows Apple to give away free OS upgrades, which in turn allows Apple to push the platform (and developers) forward.

    Maybe Apple should create tiered fees for their Developer Program?
    $99/year to develop apps sold through the App Store - Apple gets their 30% cut. Basically the same as it is now.
    $999,999/year to develop apps sold via 
    outside payment system - Apple gets nothing extra.

    Some of these larger developers could easily cover a million a year. And smaller developers can still start with a hundred dollar fee and if/when their app takes off, switch to the higher tier.


    I am an app developer, and you have absolutely no clue whatsoever about the business of apps.  You are blinded completely by the few big ones like Supercell (Clash of Clans, ...).  If Apple would $1M for to develop, there would no App store, Only major companies like Google, Facebook, ... would be willing to invest.   Statistics show that 99% of the apps are loss making.  The big profits are made by a few very profitable app companies.

    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .
    edited August 2020 gatorguywilliamlondonmuthuk_vanalingamCloudTalkinallenlbrownFileMakerFellerPShimi
  • Reply 11 of 59
    SpamSandwichSpamSandwich Posts: 33,408member
    aderutter said:
    This is a clear violation so they should have the apps remotely disabled.
    And their certificate should be pulled.
    Beatswatto_cobra
  • Reply 12 of 59
    gatorguygatorguy Posts: 23,300member
    mjtomlin said:
    tyler82 said:
    Looks like developers found a loop hole to get out of paying "taxes."

    Uh-oh, Apple apologists are stuck in a quandary on this one!

    Umm, nope. This isn't a "loop hole", it's blatant violation of the developer agreement. Did you read the article?
    Apparently not as "blatant" as you surmise if Apple hasn't already pulled the app. At some point I don't doubt that Apple will take some action if for no reason than to keep other developers in line. Immediate reaction I'm not sure about. 
    edited August 2020 muthuk_vanalingamiconaught
  • Reply 13 of 59
    SpamSandwichSpamSandwich Posts: 33,408member
    If Epic can push $1 billion in commissions to Apple, then they should get a minor break on the fees... 29.5%.
    edited August 2020 watto_cobra
  • Reply 14 of 59
    MacPro said:
    Epic: 'We have our cake and we eat it too.'
    Pretty much. Why are they on the store in the first place? Access to the huge base of customers it provides.
    They're on the store in the first place because they have no other option to distribute their app, thanks to Apple "guidelines".  Apple has boxed app developers into one place to distribute their apps.  Because of that, I think it is perfectly fair for an app to give users a choice as to the method of payment.  Of course, greedy Apple will think otherwise.
  • Reply 15 of 59
    cropr said:
    mjtomlin said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    Is that what you think? Haha. These types of developers are nothing more than parasites.

    Look, I get it and think Apple needs to do something about how the App Store is run, but these developers who want what amounts to a free ride are just being greedy and stupid. It is App Store revenue that allows Apple to give away free OS upgrades, which in turn allows Apple to push the platform (and developers) forward.

    Maybe Apple should create tiered fees for their Developer Program?
    $99/year to develop apps sold through the App Store - Apple gets their 30% cut. Basically the same as it is now.
    $999,999/year to develop apps sold via outside payment system - Apple gets nothing extra.

    Some of these larger developers could easily cover a million a year. And smaller developers can still start with a hundred dollar fee and if/when their app takes off, switch to the higher tier.


    I am an app developer, and you have absolutely no clue whatsoever about the business of apps.  You are blinded completely by the few big ones like Supercell (Clash of Clans, ...).  If Apple would $1M for to develop, there would no App store, Only major companies like Google, Facebook, ... would be willing to invest.   Statistics show that 99% of the apps are loss making.  The big profits are made by a few very profitable app companies.

    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .
    You said it! Immediately take your apps out of the Apple store. There. That's the obvious solution for your mainly worthless (as perceived by customers) apps.
    SpamSandwichBeatsDancingMonkeyswatto_cobra
  • Reply 16 of 59
    linuxplatform said: Though the columnist is making a distinction between physical and digital goods, a case can be made that such a distinction is arbitrary and self-serving.
    I think you'd have a hard time proving that it's arbitrary in court. The App Store was intended to be a sales platform for digital goods. Physical goods are exempt because Apple doesn't have any responsibility or costs in regards to their distribution. That's entirely consistent with the store being oriented around digital goods. 
    BeatsFileMakerFellerwatto_cobra
  • Reply 17 of 59
    In the picture has an App Store price of $9.99 and an Epic price of $7.99 which is being called a discount price.

    What is interesting to me is Apple pays Epic $6.99 of the $9.99. Why is Epic charging players an extra $1.00? Is it possible the extra $1.00 is being used to pay credit card fees, infrastructure costs, developer costs and other costs? If so, aren’t these similar fees and costs Apple has to pay to support every upgrade to every app that Epic has on every App Store Apple has around the world?

    Kicking Epic off the App Store should be done without delay. Epic could spend its money researching and developing a game device that it owns 100% This store could be used to show other companies how an app store should be managed. Epic will not do this because it knows it wants a free ride on Apple’s App Store and iPhone/iPad to reach as many people as possible without taking the risks necessary to truly be on its own.


    SpamSandwichBeatsrandominternetpersonrazorpitwatto_cobraDetnator
  • Reply 18 of 59
    cpsrocpsro Posts: 2,928member
    $1 out of $8, or 12.5%, is 4X Paypal's processing fee. This must be ROTFLBBQ secure.

    Will this be Greg's first big test or will Phil handle it as a legacy issue for the alum?
    Beatswatto_cobra
  • Reply 19 of 59
    Afganblues Afganblues Posts: 10unconfirmed, member
    Without the App Store, indeed without Apple, very few of the developers would have a business.  Let’s all just bite the hands that feed them. 30% ain’t diddly squat. Is charging 9.99, versus 6.99 that big of a deal? Especially when you have a $700-$1100 phone?
    watto_cobra
  • Reply 20 of 59
    cropr said:
    mjtomlin said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    Is that what you think? Haha. These types of developers are nothing more than parasites.

    Look, I get it and think Apple needs to do something about how the App Store is run, but these developers who want what amounts to a free ride are just being greedy and stupid. It is App Store revenue that allows Apple to give away free OS upgrades, which in turn allows Apple to push the platform (and developers) forward.

    Maybe Apple should create tiered fees for their Developer Program?
    $99/year to develop apps sold through the App Store - Apple gets their 30% cut. Basically the same as it is now.
    $999,999/year to develop apps sold via outside payment system - Apple gets nothing extra.

    Some of these larger developers could easily cover a million a year. And smaller developers can still start with a hundred dollar fee and if/when their app takes off, switch to the higher tier.


    I am an app developer, and you have absolutely no clue whatsoever about the business of apps.  You are blinded completely by the few big ones like Supercell (Clash of Clans, ...).  If Apple would $1M for to develop, there would no App store, Only major companies like Google, Facebook, ... would be willing to invest.   Statistics show that 99% of the apps are loss making.  The big profits are made by a few very profitable app companies.

    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .

    Nobody gives a damn about your repeated claims of being a developer while spewing all sorts of bullshit other developers know is false.
    Beatstmayiconaughtwatto_cobra
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