Apple just announced a significant upgrade to the pricing capabilities on the App Store. The addition of 700 new price points and comprehensive pricing tools is the largest upgrade to this facet of the App Store since it was first launched in 2008.
The App Store has consistently empowered companies and developers to conveniently sell their digital products and services globally. In addition, the App Store’s payment system is continually improving and offering companies more tools to enable them to grow their business.
Businesses already have access to transparent invoicing, simple checkouts, fraud detection, tax services, refund management, and powerful marketing tools on the App Store. However, pricing is the bedrock of these services. While companies could set up pricing for various business models, from a one-time purchase to a subscription, until this update, the pricing conventions they could use were limited on the App Store.
This post will explore everything your business needs to know about the new pricing upgrade to the App Store and the latest pricing tools that will make selling your apps and services easier to manage than ever before.
The App Store’s Pricing Upgrade
Before we explore the latest pricing tools Apple offers, let’s examine how pricing has changed on the App Store. If you are a developer or company with a mobile app on the App Store, you can now access the latest pricing update if your application offers auto-renewable subscriptions. All other companies and developers with apps on the App Store will be able to access these updated pricing conventions in the Spring of 2023.
So what has changed? If you have an iOS app that you sell on the App Store, you know that up until now, you could only charge fees that ended in .99. This pricing restriction can be limiting for companies. However, with new pricing conventions, developers and companies have more flexibility to price their apps, in-app purchases, and subscriptions.
Now, companies can charge round number conventions such as 1.00 or 1.95 or 1.50 in addition to .99. Companies also can charge as little as .29 cents for apps or in-app purchases, which is down from the previous minimum of .99 cents.
In addition to new low prices, Apple enables companies that gain authorization to charge up to $10,000 for apps or services. In addition, companies can access incremental price points. For example, between $.29 and $10, companies can access all price points within $.10 increments. This incremental access moves up as prices go higher. For example, companies can access $.50 increments for prices between $10 and $50 and $1 increments for prices between $50 and $200.
While these pricing points reflect the US App Store, Apple has 174 other storefronts and supports 44 other currencies besides the US dollar. Therefore, the pricing convention updates we have listed apply to all currencies and storefronts.
However, Apple brought more to the App Store than a pricing convention update.
The App Store’s Upgraded Management Tools
Managing sales across the App Store’s 175 storefronts and 45 supported currencies can be challenging for companies with global sales aspirations. So how do you ensure that your prices are consistent when currency exchange rates and taxes fluctuate between storefronts?
Before the latest App Store upgrade, companies must manually set price points across each region or storefront. This can be challenging and time-consuming. Now the App Store enables businesses to set their price in their preferred currency and storefront, and the pricing is automatically adjusted across all other 174 storefronts and 44 currencies.
The new global equalization tools ensure that businesses can charge the same amount for the apps and services no matter which storefront or currency is being used. Exchange rates fluctuate frequently.
When you set your prices in your preferred currency, all instances of your app sold in foreign currencies are automatically updated to reflect the most current exchange and tax rates, so your business always makes the same amount on each purchase, no matter the location.
Companies and developers can still manually set prices for specific currencies and territories. Still, Apple has now given companies more flexibility to set their prices and not have to actively manage and edit prices to react to changes in exchange rates.
These new pricing management tools will be rolled out like the updated pricing conventions by spring 2023. So if you have an iOS app, it is time to get familiar with all of the management tools that Apple will now offer developers and businesses with apps on the App Store.
Developers and companies that want greater flexibility and control over the pricing of their apps, services, and in-app purchases have a lot to be excited about with Apple’s new App Store update. However, this update doesn’t reflect total pricing freedom either. As we have covered, there are still strict pricing conventions and increments that developers and companies will have to use.
The most exciting part of this update for many businesses with global aspirations will be the pricing management tools. Managing varying exchange and tax rates can be time-consuming and exhausting work. Yes, retaining manual control over pricing based on territory is important. Still, it is also a huge benefit to have automatic pricing adjustments based on a set price in a preferred currency.
If you want to learn more about what the updates to App Store policy mean for your business, reach out to an experienced app development partner. An experienced app development partner can help your organization understand its options and the new tools available.