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Does the 30% apple transaction fee apply to physical goods purchased on an app? Really need help Struggling Startup!

I'm trying to determine how services such as park mobile avoid the 30% transaction fee that apple imposes. Is it because parking is a physical good? Thanks!

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Tom Williams

Clarity's top expert on all things startup

Apple specifically precludes anything that can't be delivered via the app from using in-app purchases. So you're free to tie a credit-card to services and real-world fees (think Uber) without paying Apple any transaction fees.

Here's Apple's documentation on what they support (and don't allow) for in-app purchases.

https://developer.apple.com/in-app-purchase/In-App-Purchase-Guidelines.pdf

Happy to help in any way I can. I run a mobile-based startup myself.

Answered about 11 years ago

Dan Martell

SaaS Business Coach, Investor, Founder of Clarity

I've had my app rejected for not using Apples In-App Purchase (IAP). Essentially, anything that can be delivered via the app that's "digital content" is taxable.

Originally Clarity connected the calls through the app vs. The conference line we use today - once we made that switch we were good to go.

So physical items should be fine.

Also, we use Stripe.com to process credit cards if that helps.

Answered about 11 years ago

Muhammad Shamoon

Entrepreneur & Innovator,Clarity & Relations Owner

Hey there! Shamoon here. The 30% Apple transaction fee typically applies to digital goods and services purchased through an app. However, for physical goods like those offered by Park Mobile, this fee may not be applicable as it falls outside the scope of digital transactions. Park Mobile likely operates as a platform facilitating payments for physical services rather than digital goods, thus avoiding the Apple transaction fee. If you need further assistance or have more questions, feel free to reach out to me at +923317587583. I'm here to help!

Answered 6 months ago

Kannan Nair

“I am Me.

Apple's 30% transaction fee (often referred to as the "Apple Tax") primarily applies to digital goods and services purchased within an app. This fee does not apply to physical goods or services that are purchased through an app. This is why services such as ParkMobile, which deal with physical goods/services (parking in this case), avoid this fee. Here's a more detailed breakdown:

### Apple Transaction Fee Overview

1. **Digital Goods and Services:**
- Apple charges a 30% fee (15% for subscriptions after the first year) on digital goods and services purchased within the app. This includes things like in-app purchases, digital content, virtual currencies, and subscriptions for digital content.
- Examples: Game upgrades, e-books, streaming services.

2. **Physical Goods and Services:**
- Apple does not charge a fee for the purchase of physical goods or services. This includes any real-world goods or services that users buy through an app.
- Examples: Food delivery, ride-sharing, e-commerce purchases, parking services.

### Why ParkMobile Avoids the Fee

ParkMobile deals with parking services, which are considered physical services. Users are paying for a real-world service (the ability to park their car in a specific location for a certain period), not a digital good or service. Therefore, transactions for these types of services are exempt from Apple's 30% fee.

### Implications for Your Startup

If your startup involves selling physical goods or services through an app, you should not be subject to Apple's 30% fee. Here are some steps to ensure compliance:

1. **Classify Your Offerings:**
- Clearly classify and describe your offerings as physical goods or services.
- Ensure your app’s payment flow reflects this classification.

2. **App Store Guidelines:**
- Review Apple's [App Store Review Guidelines](https://developer.apple.com/app-store/review/guidelines/) to ensure your app complies with all relevant rules and regulations.
- Pay special attention to sections regarding payments and in-app purchases.

3. **Payment Processing:**
- Use Apple’s in-app purchase system only for digital goods and services.
- For physical goods and services, integrate with external payment processors like Stripe, PayPal, or other suitable options.

### Example of Compliance

To illustrate, here’s how you might set up your app:

- **Digital Goods/Services:** If your app offers any digital content (like premium features, virtual goods), use Apple's in-app purchase system for these.
- **Physical Goods/Services:** For transactions involving physical goods or services (e.g., booking a parking spot), use an external payment processor integrated into your app.

By correctly categorizing your products and services, you can avoid unnecessary fees and ensure compliance with Apple’s guidelines, providing a better financial structure for your startup.

Answered 3 months ago