Absorb for adoption — How infamous 30% Apple cut affects iOS NFT apps
Apple’s continued enforcement of in-app purchases to sell services remains a trade-off for NFT applications looking to tap into the convenience of streamlined in-app purchases for iPhone users and a massive user base around the world.
As previously reported, Apple maintains strict rules for nonfungible token apps, enforcing a 30% commission on the sale of NFTs through in-app purchases.
The enforcement of this 30% commission has been a sore point, with Coinbase Wallet seeing an update to its application blocked by Apple in December. This was due to Apple suspending the latest app release until Coinbase Wallet disabled the ability to send NFTs through the application.
Apple may have to permit third-party app stores on its devices by 2024 in the European Union in response to the recently drawn up Digital Markets Act. This is expected to allow developers to install alternative payment systems within non-Apple apps, but would not apply to countries outside of the EU.
Related: ‘Grotesquely overpriced’ — Apple’s App Store wants 30% cut on NFT sales
Cointelegraph reached out to Nodle CEO Micha Anthenor Benoliel to unpack the implications for NFT apps that continue to operate through the Apple Store. Nodle’s app rewards users for participating as nodes in a proprietary decentralized IoT network, in addition to allowing users to mint NFTs from their smartphones.
Benoliel notes that Apple has clear guidelines enforcing NFT apps to use the in-app purchase to sell any services similar to minting of an NFT, in an effort to prevent users from purchasing NFTs from mobile applications outside of the Apple App store and its in-app purchase function:
“It may take some time for them to fully grasp the implications of Web3 principles, but for now, it looks like they are trying to safeguard their business and customers by enforcing these guidelines.”
This is in clear contrast to Android, where app developers have the freedom to experiment and are not boxed into using the Play Store in-app purchase mechanism to mint or sell NFTs. Nevertheless, Benoliel believes there are myriad benefits that balance out the trade-off of Apple’s current terms and conditions.
He notes that iOS holds a commanding position in the U.S. mobile market, while its in-app purchase functionality removes payment friction for iPhone users:
“The company has gone to great lengths to simplify the purchasing process and make it easier for developers to support transactions without managing sensitive credit card information.”
The App Store also provides a centralized service that handles various currencies and exchange rates that developers would have to manage when implementing a credit card payment solution.
Related: Robinhood Wallet rolls out on iOS with Android support to follow
Nodle intends to provide infrastructure to creators to enable app users to mint unique creations. In order to provide this service to iOS users under Apple’s current conditions, the platform has had to shift costs towards its users:
“There’s a catch. Apple charges up to 30% of the sale price for minting an NFT. Nodle includes this fee in its customer-facing price.”
Nodle’s NFT minting process allows a user to make use of camera photos or images from their galleries before paying for minting costs using Apple’s in-app purchase. The “Minting as a Service” component features a centralized service that receives and checks images before minting the NFT using the Polkadot NFT pallet upon payment confirmation.
Benoliel told Cointelegraph that Apple could benefit in the long run from the free exchange and trading of NFTs in apps, which could incentivize users to opt for alternative solutions:
“When you read about incoming EU laws that will force Apple to permit alternative app stores and apps without the need to go through its App Store, one can wonder if this could not happen soon in the U.S. as well.”
Up until that point, Benoliel believes that there is still a valid argument for NFT app developers to consider supporting iOS, citing the in-app purchase feature’s convenience for transactions. A massive user base also presents a “valuable opportunity” for developers to reach a broad audience of potential users.
Cryptocurrency wallet applications are also grappling with specific requirements to launch on the Apple App store. Decentralized exchange Uniswap intended to launch its iOS app in December but has not been given the go-ahead by Apple.