Apple Now Allows Apps in South Korea to Use Third-Party Payment Systems

Developers won't be able to use App Store features including Ask to Buy and Family Sharing if they forgo the tech giant's payment system.

Marcos Cabello
Based in Boston, Marcos Cabello has been a personal finance reporter for NextAdvisor and CNET. Marcos has covered cryptocurrency, investing, banking, and the US economy, among other personal finance subjects. If you don't find Marcos behind his computer screen, you'll probably find him behind another screen, playing the newest Nintendo Switch title, streaming the latest TV show or reading a book on his Kindle.
Marcos Cabello
2 min read
Apple App Store icon
Apple; Illustration by Stephen Shankland/CNET

Apple said on Thursday that apps exclusively released in the South Korean App Store can use third-party payment systems to take in-app payment. The move comes after South Korea last year amended its Telecommunications Business Act, which banned app stores from forcing developers to use its first-party payment systems. Google complied with the law in November, and now Apple follows suit.  

The South Korean law clamps down on app stores in an effort to rein in tech giants, who've been called out for their monopoly over in-app payments. Apple, in particular, has been criticized for the commission it charges to use its payment system, which critics have dubbed the "Apple Tax." The tax gives Apple up to a 30% cut on subscriptions and in-app purchases. This has been the source of many developer complaints throughout the years. 

Though developers can request to use a third-party payment system for apps exclusively distributed in South Korea, Apple will still take a 26% commission for payments made through these systems. If an app is available globally, developers must create another version of the app for distribution solely on the App Store in South Korea. 

Apple warns that users will not have access to some App Store features if developers choose to go this route, including features like Ask to Buy and Family Sharing. Moreover, Apple won't be able to assist users with refunds, purchase history, subscription management and the like. Instead, developers will now be responsible for these features, and they must report all sales to Apple each month.

Both Apple and Google opposed the South Korean law, citing the benefits of its first-party system. Namely, both tech giants argued that allowing a third-party payment system undermines their users' safety and privacy on their app stores, increasing the risk of fraud. 

Lawmakers around the globe are looking to establish limits for big tech. The US Congress is working on a slate of bills aimed at antitrust and privacy that would change the way that tech giants do business.