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- Apple’s App Store Small Business Program has been in place for just over one year.
- It halved in-app purchase fees from 30% to 15% for developers transacting less than $1 million per year.
- Independent developers shared that the program has been going well for them.
Independent developer Emmanuel Crouvisier quit his startup job on January 1 — coincidentally the one-year anniversary of Apple’s App Store Small Business Program — and he largely credits the program for enabling his career switch.
The program cut in-app transaction fees from 30% to 15% for developers with App Store transactions of less than $1 million annually. Developers enrolled in the program told Insider that they are happy to take home higher proceeds and were surprised by the ease of enrollment in the program.
The fee reduction program, which launched on January 1, 2021, has since allowed some developers to quit their full-time jobs to focus on independent app ventures and provided a financial cushion more than two years into the pandemic.
While developers laud the program, the iPhone maker is currently facing international backlash for requiring apps to use its own payment system — and taking as high as a 30% fee for every transaction — but developers in the program say the 15% fee is proportionate to the benefits that Apple provides them.
“We’re not getting the returns from the 30% cut that we should — the services that Apple is providing are not worth that much,” said Jeff Johnson, an independent iOS developer.
Johnson was pleased yet surprised when Apple announced the program. Things became clearer when court documents revealed that maintaining this lower rate for at least three years was a part of a class action settlement after small developers accused Apple of monopolistic behavior for its mandatory payment system.
Apple also agreed to pay $100 million into a settlement-stipulated Small Developer Assistance Fund, which essentially reimbursed in-app transaction fees for developers who made under $1 million per year in any calendar year between 2015 and 2021.
The settlement funds have been dispersed, but developers are concerned that the program will only last the three years stipulated in the agreement.
An Apple spokesperson did not say whether the program would last beyond the three-year requirement. The spokesperson also noted that the program was announced in November 2020, before the settlement was announced in August 2021.
Vidit Bhargava, who was an Apple Worldwide Developer Conference Student Scholar in 2016, hopes this program continues and noted an additional 15% of income for developers can mean the difference between developing their app on the side or full-time.
“It’s a great model to be able to support younger developers,” Bhargava said while recalling the decision to either take a traditional 9-to-5 job or become a full-time independent app developer. “If you look at the percentage jump, that would have been a clear-cut answer for me that [app development] is much more lucrative.”
Crouvisier, who was able to quit his job as director of engineering at a software development company earlier this year, has been developing apps for nearly a decade, but his app Card Pointers, which helps people maximize rewards from their credit cards, launched in 2020 was his first successful app.
He began monetizing it in late 2020 and was so successful that he began strategizing how to stay in the App Store Small Business Program — if an app surpasses $1 million of in-app transactions within one year, it is no longer eligible for the program and all transactions for the rest of the year as well as for the next calendar year are subject to a 30% fee.
He calculated that getting booted from the program could mean losing $150,000 per year.
In August Apple announced that it would begin to let developers communicate with their users outside of apps to inform them about alternative, non-Apple purchasing methods. Crouvisier has taken advantage of this by emailing users discounts if they pay with Stripe.
Overall, he has been happy with the program as well as the resources Apple’s ecosystem provides. He only recommends a small change to automatically enroll developers into the program.
“My app helps people save money so I’m very big on saving money myself,” Crouvisier said with a laugh.
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