Apple Tries to Control In App Purchases as They Gain Traction on iOS

One of the reasons Apple might be moving to exert more control over how developers implement in app purchases is because they’re taking off.

Enforcing payment rules may be less about squeezing additional revenue out of individual publishers than setting precedent before larger potential rivals like Paypal, Amazon or Facebook move in with their own arsenal of payment options inside apps.

Nearly seven percent of new apps added to the iOS platform in December offered in app purchases, up from around 3.6 percent two months earlier, according to research firm Xyologic. Now that developers are catching on with free-to-play apps and virtual goods, Apple probably doesn’t want to incentivize them to circumvent giving the platform its 30 percent cut.

Total Number of New AppsWith In App Purchases
October27320985
November320621655
December529323510

Sony said its iPhone app, which let users purchase books, was rejected by Apple on Monday because it didn’t exclusively use iOS’s In App Purchase API. The Wall Street Journal reported today that Apple sent multiple newspaper and magazine publishers notice that they would have to use iTunes payment methods by March 31 or face rejection.

While Apple’s store review guidelines have always said the company would reject apps using other payment methods, Amazon’s Kindle app was able to sell books because it punted users off to the company’s external website. Apple clarified its policy yesterday, saying that developers who offered in app purchases needed to at least offer iTunes payments as an option.

Considering that Apple’s 30 percent cut of app sales pales in comparison to the revenue it makes from selling hardware, it may have seemed like a perplexing move. But many monetization companies like Tapjoy, Flurry and SuperRewards and platforms like Facebook are betting that the same business models that fueled the social gaming industry’s growth will migrate onto mobile platforms. Facebook is said to be testing Credits for mobile devices using HTML5, which could raise interesting challenges for Apple and Google.

Google similarly tries to control payment methods in its Android Marketplace. If developers want to use Android’s freshly-launched in app billing feature, they can only offer Google Checkout or carrier billing with T-Mobile or AT&T as the payment options. However, mobile developers are free to do as they please outside of Android Marketplace and in other stores.