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What is Third-party billing?

Definition, examples, and more

Definition

Payment processing handled outside of Apple or Google's in-app purchase systems. Commonly via payment platforms like Stripe, Paddle, or PayPal. Often used for web subscriptions or Android apps distributed outside the Play Store, allowing greater pricing control and lower platform fees.

How to Calculate

Web Net Revenue = Price x (1 - Stripe Fee ~3%). App Store Net = Price x (1 - Apple Fee 30%). Savings per web subscriber = Web Net - App Store Net.

Example

A meditation app offers subscriptions via the App Store (Apple as payment processor) and their website (Stripe). Web subscribers pay the same $9.99/month but the app keeps $9.69 (after Stripe's 3%) vs $7.00 (after Apple's 30%). They promote web signup in emails and social media.

Why Third-party billing Matters

Third-party billing lets you keep 25-27% more revenue per subscriber. A news app that moved 30% of sign-ups to web via Stripe retained an additional $200K annually. The trade-off: web checkout has lower conversion rates than Apple's frictionless one-tap purchase, but the margin improvement more than compensates.

Frequently Asked Questions

Can I use third-party billing for iOS subscriptions?

For digital goods consumed in the app, Apple requires in-app purchase on iOS. However, you can offer web subscriptions promoted outside the app (email, website, social). EU regulations are opening alternative billing options.

What are the best third-party billing providers?

Stripe (most flexible, ~3% fee), Paddle (acts as merchant of record, handles tax, ~5-10%), and RevenueCat/Botsi for unified cross-platform management. Choose based on whether you want to handle tax compliance yourself (Stripe) or have it managed (Paddle).

How do I manage entitlements across billing sources?

Use Botsi to unify subscriptions from Apple, Google, and web billing under a single user profile. Regardless of where the subscription was purchased, Botsi provides a consistent entitlement API for your app.

Category
Subscription App Terminology
Related Area
Mobile App Growth & Monetization

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