Apple guzzling 30% commission on in-app NFT purchases, new report reveals
A report by The Information claims that Apple is pushing companies to pay its usual 30% fee for in-app purchases on all NFT trades, discouraging startups from offering services to the tech giant’s users.
“So far, however, most see some obstacles, including the up to 30 percent commission Apple charges on in-app purchases, as well as pricing conventions that are difficult to apply to volatile digital assets,” the report added.
The media also quoted Magic Eden’s co-founder and chief technology officer, Sidney Zhang, who revealed that due to Apple’s fees, the company has never attempted to offer buy and sell features on its app despite receiving a reduced 15% offer.
According to the marketplace, only 2% of each transaction is taken by Magic Eden.
Trading volumes are falling
In particular, until August, the NFT market witnessed a significant drop in global NFT sales volume for seven consecutive months as investor interest in digital collectibles waned.
Be[In]Crypto previously noted that global NFT sales in July were approximately $647.23 million, compared to a sales figure of $879 million in June. After reaching the second-highest peak in January with a sales volume of $4.78 billion, the 26% month-over-month decline was recorded as a result of declining unique buyers.
Therefore, marketplace founders apparently planned to increase sales through mobile apps because the NFT market was unable to hold its own in the face of general crypto weakness.
“It feels like the position is that Apple doesn’t really want to [its] users to be able to buy or sell NFTs,” Alexei Falin, CEO of NFT startup marketplace Rarible told the paper.
However, the question arises as to whether Apple is losing out on a new customer base and potential revenue stream due to its existing model.
Should Apple explore the broader markets with new offerings?
According to a recent analysis by Juniper Research, there will be 40 million NFT transactions worldwide by 2027, up from 24 million in 2022 based on the firm’s moderate adoption estimates.
That said, Apple reportedly does not accept crypto payments on its platform itself, making trading in NFTs all the more difficult. IANS quoted Arthur Sabintsev of Pocket Network as stating that this “makes it very difficult to price it because you have to program all these values dynamically.”
In July, Senate banking committee chairman Sen. Sherrod Brown Apple and Google to explain their procedures for vetting and approving crypto trading and wallet applications for download in their app stores. As Apple also came under fire for fake crypto apps, the tech company recently avoided a proposed class action lawsuit over a fraudulent cryptocurrency wallet app on the App Store. But it also becomes clear that because the App Store is seen as a publisher of the content rather than a creator, it cannot be held liable for the fake apps under Section 230 of the Communications Decency Act as reported by Bloomberg.
During the company’s latest press conference, which marked the launch of the iPhone 14, fraudsters are said to have also succeeded in defrauding thousands of Apple supporters by endorsing a fake cryptocurrency.
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