Third-Party Billing

Alternative payment methods refer to any billing mechanism that allows mobile app users to complete purchases outside of the default App Store or Google Play in-app payment systems. These include web-based checkout pages, direct carrier billing, third-party payment processors like Stripe or Paddle, and regional payment solutions. For subscription apps, alternative payment methods have become increasingly important as regulatory changes — such as the EU Digital Markets Act and rulings in Epic v. Apple — have opened the door for developers to process payments outside the traditional app store ecosystem. By routing users to a web checkout, developers can reduce or entirely avoid the 15–30% platform commission, significantly improving unit economics. However, implementing alternative payment methods requires careful consideration of user experience friction, compliance with evolving app store policies, and the technical infrastructure needed to handle billing, receipts, and entitlements across platforms.

Direct-to-Consumer (DTC) billing refers to the practice of processing subscription or purchase payments directly between the app developer and the end user, without routing the transaction through the Apple App Store or Google Play billing systems. DTC billing allows developers to collect payments via their own website, web checkout page, or third-party payment processor, thereby avoiding the 15–30% commission charged by app store platforms. This approach has gained significant traction following regulatory changes like the EU Digital Markets Act, court rulings in cases like Epic v. Apple, and Apple's own policy updates allowing developers to link out to external purchase options in certain regions. For subscription apps, DTC billing can dramatically improve unit economics — a $10/month subscription that nets $7 after Apple's commission nets $9.70 or more when processed via Stripe on a web checkout. However, DTC billing requires building and maintaining web payment infrastructure, managing subscription lifecycle events (renewals, cancellations, upgrades) outside of StoreKit or Google Play Billing, and carefully navigating the compliance requirements of each platform.

A platform fee (commonly called the "Apple tax" or "Google tax") is the commission that app store platforms charge on in-app purchases and subscriptions processed through their billing systems. Apple charges 30% on most transactions through the App Store, reduced to 15% for developers earning less than $1 million annually through the App Store Small Business Program, and 15% on all subscription renewals after the first year. Google Play charges 15% on subscription revenue and 15% on the first $1 million of non-subscription revenue, with 30% above that threshold. These platform fees have a profound impact on the unit economics of subscription apps. On a $9.99/month subscription, Apple's 30% first-year commission means the developer nets only $6.99 — and $8.49 after the rate drops to 15% in year two. This fee structure has driven significant industry interest in alternative billing mechanisms, including web-based checkout flows that process payments outside the app store ecosystem. Regulatory actions worldwide — including the EU Digital Markets Act, Japan's TPSA guidelines, and court rulings in multiple jurisdictions — are gradually expanding developers' ability to offer alternative payment options and communicate pricing outside the app, creating opportunities for meaningful margin improvement.

Web-to-App (Web2App) refers to the strategy and infrastructure that enables mobile app developers to acquire users and process subscription purchases through web-based flows before transitioning the user into the native mobile app experience. In a Web2App model, a user typically discovers the app through a paid advertisement or organic search, lands on a web page where they learn about the product's value proposition, completes a subscription purchase through a web-based checkout (processed by a third-party payment provider like Stripe), and is then directed to download and activate the app with their subscription already provisioned. The Web2App model has gained significant adoption among subscription apps for several reasons: it allows developers to avoid the 15–30% App Store and Google Play commissions by processing payments outside the native billing systems; it provides richer attribution data since web-based tracking isn't subject to the same ATT restrictions that limit in-app attribution on iOS; it offers a larger canvas for communicating value and presenting offers compared to in-app paywalls; and it enables more flexible pricing, offer, and discount strategies that aren't constrained by app store billing rules. The primary technical challenges of Web2App include maintaining a seamless user experience across the web-to-app transition, reliably syncing subscription entitlements between the web billing system and the app backend, handling edge cases (user doesn't download the app, switches devices, etc.), and solving post-iOS 14.5 attribution challenges that affect the ability to connect web conversion events to the advertising campaigns that drove them.

Server-to-Server (S2S) integration refers to the direct communication between two backend systems without any client-side (browser or app) intermediary. In mobile app monetization and marketing, S2S integrations are used for real-time data exchange between a developer's backend and third-party services such as attribution providers, analytics platforms, payment processors, and ad networks. Common use cases include sending purchase events from a web checkout server to an MMP for attribution, forwarding subscription lifecycle events (renewals, cancellations, refunds) from a billing provider to an analytics platform, and transmitting conversion signals from a payment processor to advertising platforms for campaign optimization. S2S integrations are more reliable and privacy-compliant than client-side tracking methods because they don't depend on user-side factors like ad blockers, browser cookies, or SDK availability. For web-to-app flows, S2S architecture is particularly important — it enables the web payment system to communicate subscription status to the app's backend, which then provisions access for the user regardless of which platform or device they use.