Page 29 - gs250902

Insights and Expertise

and increases customer satisfaction. • Leverage payment service providers (PSPs): Col-
laborating with established PSPs provides immedi-
4. Improved subscription management: Subscriptions ate expertise in compliance, fraud prevention and
are a cornerstone of the app economy. By managing regional payment preferences. These partnerships
billing directly, developers gain deeper visibility into reduce the technical and regulatory burden while
customer behavior and can provide flexible options accelerating time-to-market.
such as seamless upgrades, downgrades or pause fea-
tures. This level of control supports stronger retention • Prioritize customer communication: Transparen-
and creates timely opportunities for upselling. cy is critical. Developers should clearly explain the
benefits of alternative payment options to users,
5. Enhanced customer relationships: Direct involve- emphasizing security, convenience and potential
ment in payment systems enables developers to handle cost savings. Well-informed customers are more
customer service requests more efficiently. Refunds, likely to adopt new systems.
billing inquiries and transaction disputes can be ad-
dressed promptly, improving user satisfaction and fos- • Optimize for conversion: Early pilots should in-
tering long-term loyalty. clude A/B testing of different checkout designs and
payment methods to determine which configura-
Challenges and considerations for developers tions yield the highest conversion rates. Insights
Despite the clear upside, the transition to third-party from these experiments will inform broader scal-
billing is not without its challenges. Developers must ing strategies.
carefully consider the following factors: A new era for app store economy
• Regulatory fragmentation: Requirements vary sig-
nificantly by market; what is permissible in the EU The shift in regulatory dynamics marks the beginning
will differ from the United States and South Korea. of a more equitable app store economy. Power is moving
Developers must design payment experiences per away from centralized app store operators and toward
market. developers and consumers, creating a more competitive,
innovative and customer-centric marketplace. Besides the
• User trust and security: Payment processing is a EU, the United States and South Korea; Japan, the UK and
highly sensitive aspect of the user journey. Devel- Australia will implement similar new laws in 2025, with
opers must ensure third-party providers meet the other markets to follow in 2026.
highest standards of encryption, fraud detection
and data privacy to maintain user trust. For developers and app owners, this is both a challenge and
• Technical integration: Introducing third-party sys- an opportunity. Those who act decisively, experimenting
tems requires investment in technical infrastruc- with third-party billing, refining customer experiences
ture. This includes APIs, user authentication and and forging strategic payment partnerships, will be best
seamless interoperability with app store policies positioned to thrive.
where dual systems coexist.
• Operational complexity: With direct control comes The broader implications for the digital economy are
equally profound. Consumers gain greater choice and
added responsibility. Developers must manage tax control, while developers are incentivized to innovate
compliance, refunds, chargebacks and regulatory beyond the constraints of legacy systems. Over time, these
reporting, functions previously absorbed by app dynamics will likely fuel a virtuous cycle of competition,
store operators. efficiency and value creation.

While these hurdles are significant, they are not The future of app monetization will not be dictated by
insurmountable. By aligning with experienced payment a single payment channel or controlled by a handful
partners, developers can mitigate risks while unlocking of platforms. It will be defined by flexibility, user
the potential of greater control. empowerment and strategic innovation. The question

Practical steps for developers is not whether to act, but how quickly to seize the
opportunity.
For many developers, particularly smaller studios or
independent publishers, a phased approach to third-party Menno Hoekstra, director of product at Worldline is a passionate prod-
billing is prudent. Several strategies can help minimize
risk while maximizing learning: uct manager with 15+ years of experience in fintech and SaaS, driving
innovation and user-centric solutions. His blend of technical curiosity,
• Start with pilot markets: The EU, US and are cur- marketing background and strong communication skills allows him to
rently leading in regulatory reforms. Developers bridge the gap between customers, sales and IT. He excels at translating
can experiment with alternative payment systems problems into successful products, owning their lifecycle from concept to
in these regions, gather user feedback, and refine launch and beyond. Contact him via LinkedIn at https://linkedin.com/
strategies before a broader rollout. in/mennohoekstra.
29