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 that want to take advantage of streamlined in-app purchases for iPhone users and a massive user base worldwide.

As previously reported, Apple maintains strict rules for nonfungible token (NFT) apps, enforcing a 30% commission on sales of NFTs through in-app purchases.

The enforcement of this 30% commission has been a sore point, as Coinbase Wallet saw an update to the application blocked by Apple in December 2022. This was due to Apple suspending the latest app release until Coinbase Wallet disabled the ability to send NFTs through application.

Apple may have to allow third-party app stores on its devices by 2024 in the EU in response to the recently drafted Digital Markets Act. This is expected to allow developers to install alternative payment systems in non-Apple apps, but will not apply to countries outside the EU.

Related: ‘Grotesquely Overpriced’ – Apple’s App Store Wants 30% Cut on NFT Sales

Cointelegraph caught up with Nodle CEO Micha Anthenor Benoliel to unpack the implications for NFT apps continuing to operate through the Apple Store. Nodle’s app rewards users for participating as nodes in a proprietary decentralized IoT network, as well as allowing users to create NFTs from their smartphones.

Benoliel notes that Apple has clear policies that force NFT apps to use the in-app purchase to sell services similar to minting an NFT, in an effort to prevent users from purchasing NFTs from mobile applications outside the Apple App Store and its in-app purchase feature:

“It may take some time for them to understand the implications of the Web3 principles, but for now it appears they are trying to protect their business and customers by enforcing these policies.”

This is in stark 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 create or sell NFTs. Still, Benoliel believes there are a myriad of benefits that balance the trade-off of Apple’s current terms and conditions.

He notes that iOS has a dominant position in the US mobile market, while the 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 offers a centralized service that handles various currencies and exchange rates that developers must 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 so that app users can create unique creations. In order to offer this service to iOS users under Apple’s current conditions, the platform has had to shift costs towards users:

“There is a catch. Apple requires up to 30% of the selling price to mint an NFT. Nodle includes this fee in its customer-facing price.”

Nodle’s NFT embossing process allows a user to use camera shots or photos from their galleries before paying for the embossing costs using Apple’s in-app purchases. The ‘Minting as a Service’ component has a centralized service that receives and checks images before minting NFTs using the Polkadot NFT pallet at payment confirmation.

Benoliel told Cointelegraph that in the long run, Apple could benefit from free exchange and trading of NFTs in apps, which could motivate users to choose alternative solutions:

“When you read about incoming EU laws that will force Apple to allow alternative app stores and apps without having to go through the App Store, one wonders if this could not happen soon in the US as well.”

Until then, Benoliel believes there is still a valid argument for NFT app developers to consider supporting iOS, citing the in-app purchase feature that is convenient for transactions. A massive user base also provides a “valuable opportunity” for developers to reach a wide audience of potential users.

Cryptocurrency wallet applications also struggle with specific requirements to launch on the Apple App Store. Decentralized exchange Uniswap intended to launch its iOS app in December 2022, but has not received the go-ahead from Apple.