On January 16, 2024, Apple updated its App Store Review Guidelines to now permit U.S. developers to direct end users within the iOS app environment to external payment methods.

Prior to this update, any in-app purchases by end users of digital goods would occur solely through Apple's In-App Payment processing system ("IAP"), where Apple collected 30% of the sale.  App developers were previously prohibited from including any external links in the iOS app environment that would direct end users outside of the app itself.

So what's changed?

At a high level, Apple is permitting U.S. developers to provide external links to other payment methods outside of the IAP system - subject to some key conditions. For eligible apps, Apple will charge 27% of certain proceeds of sales of digital goods/services made through these external links. 

This means that app developers have two options for in-app purchases for digital goods: (1) use Apple's IAP system for payment (with a 30% fee to Apple) OR (2) if eligible, provide external payment methods to end users (with 27% fee to Apple). 

We've summarized the top 5 things for developers to know:

1. U.S. Only. App developers are only permitted to use this new program if their apps are available in the U.S. App Store.
2. Entitlement Request Form. In addition to the U.S. requirement, app developers must submit an entitlement request form. App developers that already participate in Apple's Video Partner or News Partner Programs cannot apply. 
3. Compliance & Appearance. If approved, developers must then configure Apple's StoreKit API in their apps. Once the APIs are set up, developers need to ensure that the external link, among other requirements, does not link to any intermediary or landing pages by populating only an external browser page and properly identifies users routed from the U.S. storefront. Also, developers should be careful to not mimic Apple's IAP system and shouldn't outright discourage users from using it. Specifically, developers need to use the templates and link out icons offered by Apple. For more information about technical requirements and configuration, click here. 
4. Approval by Apple. After configuring the app to include external links for payment, developers then need to submit certain documentation, such as screenshots of the app user interface, to demonstrate compliance. Apple will then review and notify developers once approved. 
5. Payment. For any purchases initiated by end users within 7 days from when they linked out of the app, Apple collects a 27% commission of these sales. This commission only applies to the sale of digital goods and services that can be used within the app itself.  Developers must provide transaction reports within 15 calendar days at the end of each calendar month, even if no transactions occurred. Apple will then invoice developers for the commission amounts owed to Apple that Apple has calculated, which are due within 30 days of the invoice being issued by Apple - not receipt. Late payments by developers will result in interest fees. 

So what's next?

Developers who want to use this entitlement program should carefully review Apple's new terms to ensure compliance. We're monitoring any changes or additional guidance from Apple closely as enforcement of the entitlement program begins.