The core distinction: physical products versus digital content
Few topics generate more anxiety and confusion among business owners publishing mobile applications than payment processing rules. The belief that Apple and Google automatically take a thirty percent cut of every single transaction that occurs inside an iPhone or Android application is widespread. That belief is factually incorrect.
Both Apple (under App Store Review Guideline 3.1) and Google (under Google Play Billing policy) draw a strict, fundamental legal boundary between two distinct categories of commerce:
1. Physical Goods and Real-World Services: Transactions involving physical merchandise, physical services, real-world bookings, transportation, food delivery, and physical event admission.
2. Digital Goods and Virtual Services: Transactions involving digital content, premium software features, digital subscriptions, virtual currencies, media streaming, and content consumed directly within the mobile application.
If your business sells physical items or provides services in the physical world, Apple and Google strictly prohibit you from using their In-App Purchase systems. You are required to use your own web payment gateways (such as Stripe, PayPal, Square, or Authorize.net), and you retain one hundred percent of your transaction revenue minus standard merchant gateway processing fees.
Transactions where you keep 100 percent of your web checkout revenue
Understanding the exact categories of businesses that qualify for standard web checkout allows you to design your mobile monetization strategy with complete confidence. The following business models are completely exempt from Apple and Google store billing commissions:
Physical eCommerce Stores: Selling clothing, electronics, home goods, cosmetics, packaged food, or any physical product shipped to a customer address. Whether you run your store on WooCommerce, Shopify, Magento, BigCommerce, or a custom backend, you process payments through your standard shopping cart checkout.
Food and Beverage Delivery and Pickup: Restaurants, bakeries, coffee shops, grocery delivery services, and catering companies selling meals and food items for pickup or delivery.
Real-World Appointments and Professional Services: Salons, fitness trainers, medical practices, legal consultations, home repair services, automotive detailing, and cleaning services where the customer pays for a service delivered in person.
Real-World Event Ticketing: Concerts, sports games, theatrical performances, conferences, and festivals where the purchase grants physical admission to a physical venue.
Transportation and Lodging: Ride-hailing services, bike rentals, hotel reservations, vacation rentals, and airline bookings.
B2B Invoicing and Wholesale Orders: Direct client invoicing, wholesale bulk ordering, and commercial contract payments.
In every one of these categories, your mobile app displays your standard web checkout form. Customers enter their credit card details or use Apple Pay and Google Pay through your web gateway, and the funds deposit directly into your business bank account.
When Apple and Google mandate In-App Purchases (IAP)
In-App Purchases (IAP) become mandatory only when a transaction unlocks digital content, digital capabilities, or services that are consumed directly inside the mobile application interface. Attempting to bypass Apple or Google IAP systems for digital goods by inserting external payment links will result in immediate app rejection or removal from the store.
Mandatory In-App Purchase categories include:
Digital Subscriptions and SaaS Features: Unlocking premium software tools, cloud storage upgrades, advanced analytics, ad-free viewing experiences, or digital service tiers accessed within the app.
Digital Courses and Content Libraries: Purchasing access to online video courses, digital training modules, audiobooks, or premium articles that are viewed or listened to inside the mobile app.
Virtual Currencies and Digital Items: Buying coins, tokens, credits, filters, digital stickers, or game enhancements.
Paid Communities and Digital Memberships: Accessing private digital chat groups, gated forum categories, or member-only digital livestreams.
One-on-One Virtual Services: Paying for live virtual consultations, remote tutoring, or digital coaching sessions conducted via video call within the app.
When selling items in these categories on iOS, the transaction must execute through StoreKit (Apple In-App Purchase framework). On Android, the transaction must execute through Google Play Billing. Apple and Google handle the customer billing, charge the credit card linked to the user device account, deduct their store commission, and disburse the remaining balance to your developer account on a monthly schedule.
The Small Business Program: reducing store commissions to 15 percent
For businesses that sell digital goods and are required to use In-App Purchases, the standard store commission rate was historically thirty percent. Today, however, both Apple and Google operate Small Business Programs that cut this commission rate in half to fifteen percent for the vast majority of developers worldwide.
The Apple App Store Small Business Program allows any developer account earning up to one million United States dollars in total annual proceeds across all published applications to qualify for a reduced fifteen percent commission on all digital sales and auto-renewing subscriptions. If your business earns under this threshold, you can enroll in the program through App Store Connect. Once approved, Apple automatically applies the fifteen percent rate to all customer transactions.
Google Play operates an even more accessible program: Google Play automatically applies a reduced fifteen percent tier on the first one million dollars of digital earnings for every registered developer account each year, without requiring a formal prior-year qualification audit. Digital revenue exceeding one million dollars within a calendar year reverts to the standard thirty percent tier.
Furthermore, for auto-renewing subscriptions, both Apple and Google automatically reduce their commission rate from thirty percent to fifteen percent for any individual subscriber who remains continuously subscribed for more than twelve months, regardless of your total company revenue.
Reader apps, multi-platform services, and external account management
For businesses that operate cross-platform services (where customers access content across the web, desktop, and mobile devices), Apple and Google provide specific policy exceptions known as the 'Multi-Platform Service' and 'Reader App' rules.
Under the Multi-Platform Service rule, an app can allow users to log in and access content, subscriptions, or software capabilities that were purchased outside the app on your website, provided that the same digital items can also be used on other platforms (such as your web application or desktop client). For example, productivity tools like Slack, Notion, and project management platforms allow existing paying customers to log into their mobile apps without forcing the company to offer IAP inside the app, as long as the app does not actively direct users to an external web checkout button.
Under Apple Reader App rule (Guideline 3.1.3(a)), qualifying applications whose primary function is providing access to previously purchased digital media, including magazines, newspapers, books, audio, music, and video, can apply for an External Link Account Entitlement. This entitlement permits the application to display a single, formatted link directing the user to the company website to register or manage their account.
Recent legal and regulatory updates in the European Union (under the Digital Markets Act) and other jurisdictions have further opened opportunities for alternative billing systems, allowing developers in specific regions to offer external payment links with adjusted store fee structures.
How to structure your app pricing to stay compliant
To maintain complete compliance with both Apple and Google while protecting your revenue, follow these practical structural guidelines:
1. Keep Physical and Digital Catalogs Distinct: If your store sells both physical products (e.g., printed books, branded apparel) and digital products (e.g., downloadable PDF guides, video courses), separate these items in your store navigation. Process physical products through your standard web checkout and process digital downloads through store IAP, or restrict digital purchases to your web browser interface.
2. Avoid Prohibited Outbound Links for Digital Sales: If you offer digital subscriptions and choose not to integrate In-App Purchases, you cannot place buttons in your mobile app that say 'Click here to buy on our website' or 'Upgrade your subscription on the web for a lower price'. The app can display an account login screen and explain that an active account is required, but it cannot link directly to a web payment form for digital goods.
3. Price Parity Consideration: If you sell digital subscriptions through In-App Purchases, you are permitted to set different price tiers on the web versus in the mobile app to offset store commissions, provided that the pricing is displayed clearly to users within each respective platform.
4. Document Your Product Type in Store Review Notes: Whenever you submit an app that uses web checkout for physical items, state clearly in your App Store Connect review notes: 'This application sells physical merchandise delivered to customer addresses. All transactions process through our standard merchant gateway per Guideline 3.1.5(a).'
Frequently asked questions about store checkout rules
Can I use Stripe checkout in my mobile app for selling physical products? Yes. Apple Guideline 3.1.5(a) explicitly allows and requires standard credit card processors like Stripe, PayPal, Square, and merchant accounts for physical goods and real-world services.
Does Google Play charge thirty percent on physical eCommerce? No. Google Play Billing policy applies strictly to digital goods. Google Play does not charge any fee on physical goods sold through your store.
Can an app link to an external payment processor for booking physical appointments? Yes. Booking physical appointments (such as personal training sessions, salon appointments, medical visits, or home maintenance) represents a real-world service and is processed through your standard web payment system.
What happens if an app incorrectly uses web checkout for digital items? If Apple or Google reviewers discover that an app is using web checkout to sell digital content or software upgrades without IAP, the app submission will be rejected, or an existing app will receive a policy warning requiring compliance within fourteen days.