Appcharge Named Best Payment Service Provider at PocketGamer.biz Mobile Game Awards
We’re thrilled to announce that Appcharge has been voted the Best Payment Service Provider at the PocketGamer.biz Mobile Game Awards, held during gamescom 2024!
This award is a huge honor for us, and it speaks to the hard work and innovation our team has poured into scaling our payment services for game publishers.
We’ve been on a mission to help the world’s leading mobile game publishers sell directly to players, and this recognition shows that we’re on the right track — but we’re just getting started.
We want to extend a massive thank you to our partners, clients, and everyone who voted for us. Your trust and support drive us to continue innovating and delivering top-notch payment solutions.
Stay tuned for more exciting developments on the horizon!
This Game Developer Had to Pay $23M After Misreporting Taxes – Here’s How to Avoid The Same Fate
In 2023, Epic Games’ finance team got a call from Tokyo’s Tax Bureau. They just discovered that between 2018 and 2020, the company failed to declare its income from microtransactions in Fortnite in Japan.
They fined Epic and made them pay the consumption tax (AKA sales tax/VAT) retroactively – a total of $23 million.
So, while the subject of sales tax may not inspire mobile gaming executives to jump out of bed each morning, failing to comply with sales tax requirements will certainly keep them up at night.
With that said, what does a mobile gaming leader with direct-to-consumer (DTC) ambitions need to know about staying sales tax compliant – and avoiding a hair-raising phone call from a foreign tax authority?
First, a little context
Before jumping into our key insights, it’s worth explaining when exactly tax on digital goods becomes a responsibility for mobile game publishers.
Apple and Google handle this on your behalf when you sell in-game items within their payment ecosystems – in return they take 30% of your margins.
But the moment you begin selling to players on web stores, outside of the Apple or Google ecosystem, you take on full responsibility for VAT/sales tax compliance.
It’s a massive headache, but the juice is worth the squeeze, with publishers such as Playtika earning 25% of their total revenue from direct-to-consumer sales.
How to Stay Sales Tax Compliant
To stay sales-tax compliant, there’s a long list of responsibilities and processes you need to follow:
1. Understand Your Global Tax Obligations
Start by researching regional tax laws on digital goods wherever you have customers. Tax laws can vary significantly from one region to another. For example:
The U.S state of Delaware has no sales tax at all
Some states, like Tennessee, have digital sales tax rates of up to 9.75%
In Australia, there is an annual sales threshold of AUD 75,000. Businesses below this threshold are not required to register for Goods and Services Taxes.
These are but 3 examples of unique governance, but many more exist – and the burden of understanding due process and proper reporting rests on you, the seller.
2. Set up entities in relevant jurisdictions
In many countries, you have to establish entities and set up local bank accounts to register your business on the ground.
In the U.S. you have to establish entities in approximately 27 different states. This can take months and costs a lot of money (lawyers, bank accounts connected to the entity).
In the EU, you just need to register one local entity.
In Japan, foreign businesses must establish a local entity and register for consumption tax if their taxable sales exceed JPY 10 million in the previous fiscal year. Additionally, the business must appoint a local representative to handle tax matters.
3. Register with the tax authorities
You have to register with the tax authorities in almost every state or country you’re selling in. Yes, you read that right – whether you’re selling to players in the U.S, Japan, Germany or almost any other country, you need to register with the local tax authorities. Lawyers and accountants will be needed, which can be costly.
4. Calculate the right taxes for every transaction
For every transaction, your game has to calculate and show users how much VAT/sales tax they owe and will be charged. In some countries, like the U.S, there are multiple layers of sales tax you could be liable to pay on digital goods, depending on the location of the buyer. The tax tiers include federal, state, county, city, and a category defined as ‘special’.
For example, if a player in Dallas, Texas, buys an item in your web store for $10 USD, you’d have to calculate:
State: 6.25% ($0.65)
City: 1% ($0.1)
Special (Dallas Mta Transit): 1% ($0.1)
To accurately calculate the correct amount of tax for each sale and reduce the risk of human error, publishers should use a tax automation service such as Avalara, or use the services of a Merchant of Record such as Appcharge.
5. Implement Accurate Tax Collection
You as the seller are required to charge and collect the tax payment from players for every transaction. A couple key points here:
You have to keep the collected tax payment separate in a sub account, in the currency it was received in.
You need to send the buyer a receipt, invoice, or payment request.
6. Report tax promptly and accurately
Every month or quarter, you have to file tax reports in all the relevant tax authorities whose regions you’ve done business in – even in areas with 0% sales tax. To do this, you need to build a system that pulls transactional data from your game, and exports it to a spreadsheet with a detailed breakdown that includes, for each transaction:
The user’s specific location
The local currency
The amount of sales tax charged
It’s a huge amount of data to manage, and it has to be accurate – so make sure you meticulously maintain your records to avoid potential penalties.
Note that you’ll need to submit this data in different formats in various countries and states, for examplein Saudi Arabia you will have to issue the invoices in Arabic, and in South Korea you will have to share all the invoice details (which is not required in the US).
Tax Compliance For DTC Sales: A Worthwhile Headache
With great opportunities come great responsibilities. To recap, in order to sell digital goods globally via your web store while avoiding serious penalties (or even worse – jail time), you need to:
Keep track of complicated, often changing global sales tax/VAT regulations
Establish dozens of local entities
Register with local tax authorities
Calculate the correct sales tax for every transaction
Efficiently collect the sales tax from every transaction
File numerous tax reports every month or quarter
This doesn’t just represent a major operational burden – but also a financial one. You need lawyers and accountants to help with the process, in addition to a team of finance specialists to run this whole operation. It’s a lot, but it’s doable if you have the resources – and the rewards are certainly worth it.
Doing All Of This At Scale Is What We Do At Appcharge
If it sounds overwhelming to do it alone with in-house resources, you can and probably should consider using a Merchant of Record like Appcharge. We do this at scale for some of the biggest mobile game publishers in the world and we’d be happy to help you too.
As a comprehensive solution for direct-to-consumer sales for mobile game publishers, we offer full Merchant of Record services – meaning we take the entire tax compliance process off your plate.
Our team manages entity creation, tax authority registrations, calculations, collections, filings, and everything in between to let you focus on growing your web store revenue.
Everyone Faces Fraud in Mobile Game Web Stores. But How Do You Fight It, Exactly?
Managing a mobile game web store can be a rewarding venture, with publishers increasing their margins by up to 25 percent per transaction. But selling outside the Apple and Google ecosystems also comes with its own set of challenges, particularly when it comes to fraud and chargebacks – which have grown by 20% annually.
Picture this: one of your players decides to file dispute claims on thousands of dollars worth of past transactions, for no justifiable reason. This is not a hypothetical scenario – it’s a real case we recently encountered in one of our partner’s stores. What do you do? How do you fight this?
There are typically two options as a publisher: issue an automatic refund, which of course means losing revenue.
Or, collect evidence – such as player activity logs and previous communication with the player – and file a counter dispute file to the bank.
Luckily for this publisher, they had us as their Merchant of Record (MoR) to fight their corner and win them back their money. But this anecdote is just one of many types of fraud that can plague mobile game web stores. From abusive dispute behavior to stolen credit cards, we’ve seen it all. Below, I share what to look out for and our advice for how you too could combat fraud.
Types of Fraud
First thing’s first, let’s establish the 5 most popular types of payment fraud in mobile game stores:
1. Abusive Disputes
One of the most common forms of fraud we see involves players abusing the dispute process. Players submit numerous disputes on payments they’ve been charged for, often due to dissatisfaction with the game or buyer’s remorse. In some countries, disputing payments is as simple as a few clicks in a banking app.
How to spot it: When a user sends a dispute, they must give a reason such as “Item not received”. You can spot an abusive dispute claim in this case by investigating player activity logs. If you see the item in question was added to the user’s in-game profile, their claim is highly likely to be fraudulent.
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2. Claims of Unauthorized Payments
Another frequent issue is players claiming someone unauthorized – such as their underage child – made the payment.
How to spot it: If the payment was made using Google/Apple Pay, which requires authentication phases such as FaceID, it’s clear the claim is fake.
3. Creating Multiple IDs and Disputing Transactions
We also encounter players creating multiple accounts – for instance, if they get blocked by the publisher for chargeback abuse, or if they ask to be blocked as they’re addicted to the game, but then regret this and want to re-enter. They then proceed to submit unjustified chargeback claims out of frustration. This can create significant financial losses and administrative burdens for publishers.
How to spot it: A telling sign of this kind of fraud is if you find multiple player IDs, all associated with one email or credit card, that are sending disputes.
4. Using Multiple Credit Cards from Different Countries
An obvious one – fraudsters often use multiple credit cards from different countries to make fraudulent purchases. These cards are usually stolen, and the legitimate cardholders will eventually dispute the charges.
How to spot it: You can spot this kind of fraud by tracing a single user ID to multiple transactions all with numerous different credit cards.
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5. Emulator or Bot Usage
Fraudsters are known to use emulators or bots that use stolen card information. These tools can manipulate in-game economies and generate unauthorized in-app purchases.
How to spot it: You can spot this kind of fraud if the same player sends numerous payment attempts in an extremely short amount of time. Your team or Merchant of Record should automatically flag this kind of activity.
Combating Web Store Fraud
Now that we have a better grasp of the popular types of fraud you’re likely to encounter, let’s switch gears to discuss how to combat them.
Fighting fraud without Apple or Google’s support may seem daunting, but there are various tactics that can help you limit fraudulent activity, or at least manage it effectively when it does happen.
What’s more, you don’t have to do it alone. In fact, working with a gaming-focused Merchant of Record like Appcharge means you don’t have to do anything at all: we take payment disputes and fraud off your plate entirely, so you can focus on building a kick-ass web store.
But whether you decide to handle fraud with in-house specialists or let an MoR take responsibility for everything, here are our tips for helping you run a tight ship:
1. Maintain Organized Records of Player Activity
Ensure you have an organized record of player activity in your game, so you have a bank of evidence to help dispute false claims.
2. Monitor for Unusual Patterns
Hire fraud analysts to monitor for unusual transaction patterns and flag transactions that seem suspicious.
3. Use Anti-Fraud Engines
In addition to human-led monitoring,use dedicated fraud engines that leverage AI and machine learning to detect and block fraudulent transactions. Dedicated engines are generally more effective than the fraud technology offered by PSPs. The right engine will also know how to minimize false positive cases – in which transactions are blocked after being falsely flagged as fraudulent.
4. Provide Alternative Payment Methods (like digital wallets) in your web store
In contrast to credit cards, most digital wallets (like Apple Pay) require another form of authentication to complete a transaction. With 5.3 billion users expected to use digital wallets by 2026 – more than half the world’s population – make sure you provide a broad range of digital wallet options to ensure every user gets their preferred method. In doing so, you’ll reduce the amount of fraudulent activity on your web store, increase your conversion rates, and provide a great UX.
New Revenue, New Headaches
Despite the ongoing battle publishers face against fraud, web stores present a tantalizing opportunity. The fact that Playtika earns 25% of their total revenue from D2C sales is testament to this. Other leading publishers, like Huuuge Games, are also seeing healthy growth in D2C revenue, expecting it to reach mid-teens as a percentage of total revenue in 2024. In other words, the juice is definitely worth the squeeze!
While some publishers may choose to handle fraud by hiring in-house specialists, most choose to use Merchant of Record providers to take on full responsibility for all of this.
If you’re interested in learning more about the day-to-day fraud struggles my team handles on behalf of our partners, reach out at appcharge.com, or drop me a message on LinkedIn!
Merchant of Record vs. Payment Service Provider: A Simple Guide For Mobile Game Developers
Selling directly to mobile gamers on a web store, outside of Apple or Google’s ecosystem, means you’re responsible for everything needed to sell globally.
That includes processing payments, handling refunds, chargebacks, and fraud, abiding by country-specific regulatory compliance, paying sales tax, and more.
Publishers who wish to outsource some or all of these responsibilities generally have two types of providers to choose from – a Merchant of Record (MoR) – such as Appcharge, or a Payment Service Provider (PSP) – such as Stripe.
But there’s a big difference between these two solutions and what they cover, which is why we put together this guide. Let’s dive in.
Merchant of Record vs. Payment Service Provider: A Quick Comparison
Feature
Merchant of Record (MoR)
Payment Service Provider (PSP)
Provides payment processing tech
✓
✓
Connects to banking network
✓
✓
Offers a broad range of payment methods
✓
✓
Protects against fraud
✓
(For additional cost)
Handles chargebacks and disputes
✓
(For additional cost)
Handles customer service issues
✓
(For additional cost)
Responsible for data security
✓
Depends on service
Ensures tax compliance
✓
✗
Acts as the seller of record
✓
✗
Manages financial liability
✓
✗
Simple integration and setup
Depends on service
✓
Manages broader legal compliance
✓
✗
What is a Payment Service Provider?
PSPs are the middleman between customer bank accounts and payment methods (like Visa or Paypal). They facilitate the payment transaction, and take a fee for this.
PSPs do not serve as the legal seller nor do they assist with various other financial responsibilities shown in the table above.
Examples of PSPs:
Stripe, Nuvei, Checkout.com, Adyen
What you get with a PSP
Payment processing: The core function of a PSP is the technology to accept various payment methods, process payments, and connect to the banking network.
Fraud Protection [for additional cost]: Some PSPs will give the option to pay for fraud protection in addition to payment processing.
Chargebacks and disputes [for additional cost]: Chargebacks are a real financial and time burden for merchants. Some PSPs will offer a service to handle chargebacks for an additional fee.
What kind of gaming company should use a PSP?
Choosing a PSP instead of an MoR makes sense if your game is heavily focused on one market, and therefore doesn’t need to pay fees for international coverage and global tax compliance. Such companies can still supplement the core payment processing functionality of a PSP with additional features like fraud protection and chargeback support, for extra fees.
Another scenario in which a PSP might make most sense is when publishers have already built their own D2C ecosystems, with in-house finance specialists. They might need only the payment processing technology of a PSP and not the whole payment operations stack of an MoR.
What is a Merchant of Record?
A Merchant of Record is a holistic, one-stop solution for your D2C payments.
Your MoR acts as the seller of record in transactions, assuming full financial liability for transactions, including taxes, chargebacks, and refunds.
Examples of general MoR companies:
Fast Spring
Reach
Examples of gaming-focused MoR companies:
Appcharge
Xsolla
What you get with an MOR
Payment processing – An MoR will integrate and maintain multiple B2B payment processors or payment service providers to facilitate payment routing and cascading, reducing the risk of payments being mistakenly declined as fraudulent and resulting in lost revenue.
Fraud protection – An MoR will offer detection of fraudulent orders, manual review of suspicious orders, and custom rules to protect your business.
Merchant Accounts – An MoR will set up multiple merchant bank accounts in countries where you have a significant customer base, enabling you to accept global payments.
Disputes and refunds – An MoR handles payment reconciliation, refunds, and chargebacks, ensuring a smooth process for both you and your customers.
Local entity creation – An MoR will set up local business entities to facilitate merchant accounts, tax registration, payment relationships, and more.
Currency conversion – To reduce any friction from the user’s payment experience, an MoR will automatically convert the prices to local currencies.
Tax compliance – An MoR will calculate, file, and remit software sales tax in the locations your customers reside in, ensuring compliance with local regulations.
All of these things are required to power global D2C sales – the decision is whether you want to outsource everything to an MoR, or combine a PSP (with limited add-ons) with in-house specialists.
What kind of gaming company should use an MoR?
Publishers selling D2C web store items to a global market, who would rather outsource the complexities this entails to a trusted partner instead of hiring finance teams in-house.
Merchant of Record vs. Payment Service Provider: Which Option is Best For Mobile Game Publishers?
The boring answer is that it depends. Both options offer varying benefits, but the choice relies heavily on your company’s specific needs, the extent of your global market reach, and how much of the financial and legal responsibilities you’re willing to manage in-house.
We’ll take this moment before you go to mention that we offer gaming-specialized MoR services that are battle-tested with some of the world’s biggest publishers. Should you wish to get in touch to learn more, you can book a demo via our homepage.
The Appcharge Manifesto
When we launched Appcharge in 2022, we knew we wanted to not only bring positive change to the mobile games industry, but also do things differently.
Taking publishers into the direct-to-consumer (DTC) ecosystem is a big responsibility, one that can achieve an elusive win-win combination for players and publishers alike.
A win for players, who get more value for their money plus a fun experience to complement their gameplay; and a win for publishers, who increase their financial resilience, their autonomy, and their game’s retention rates and user LTVs.
Recognizing the sheer value of the DTC opportunity we could unlock for the industry, and the shortcomings of existing solutions in the market, myself and my co-founders sat down and, over many brainstorming sessions, refined Appcharge’s core manifesto.
Our non-negotiables, our principles, and the value we knew we had to unwaveringly provide our customers with. Here they are.
The days of being totally at the mercy of the traditional gatekeepers are over.
It’s not only a right, but also a strategic imperative for mobile game publishers to truly own their audience, to sell to players on their terms, to not lose 30 per cent on every transaction, and to take back what’s theirs.
It feels quite revolutionary in spirit, but it shouldn’t be.
We’re just facilitating what should have already been possible: the right to sell directly to players.
The strategic advantage publishers gain by going direct-to-consumer with web stores is clear.
The biggest publishers like Rovio, Supercell, Moon Active and Scopely have all built web stores in-house, pouncing on the DTC opportunity early.
But here’s the thing: most other publishers can’t afford to build a web store internally. It simply takes too much time and costs too much money, when their manpower needs to be razor focused on existing development and game design tasks.
With the gap already widening between the biggest publishers and the rest – a quick look at the top grossing charts shows the domination of legacy games and studios – it’s clear that the industry needs a more level playing field in the realm of web stores.
That’s why we created a white label web store platform, to enable mobile game publishers of all sizes to access the DTC opportunities that the largest companies are already capitalizing on.
Our team’s background at mobile gaming titans such as Moon Active, one of the most sophisticated publishers in terms of their data centric culture and use of segmentation, helped us crystalize our product strategy and vision:
For a web store to be fun, it must provide a personalized, relevant experience to every user.
And so we set off to build a robust segmentation tool that lets publishers serve their players the most relevant offers and web store UI, in real time.
Whether the user is entering the web store for the first time or they’re a long-time spender, whether they’re entering the store for the fifth day in a row or returning after a month away, we give publishers the tech they need to serve a personalized experience that delights players and maximizes their LTV.
We saw how existing game web stores looked and felt, and we wanted to help publishers do things better.
Too many web stores focused too much on selling, while forgetting a crucial part of the puzzle: fun. No publisher would launch a game that isn’t fun, and we firmly believe that this ethos extends to web stores too.
Players should enjoy spending time in web stores – it should feel like an extension of the game experience. That’s why gamification mechanics are a core feature of Appcharge’s web store builder.
Breaking out of the walled gardens maintained by the gatekeepers is all about retaking control of your games business.
A web store platform that is secretive, vague, or misleading with its fee structure goes against the very ethos of leading publishers into the direct-to-consumer ecosystem.
That’s why Appcharge will always be clear and reasonable with our fee structure.
We’re here to help publishers win, not to empty their pockets.
Great products are built by people who truly get the needs of the niche they’re serving.
Appcharge’s platform was built by product and monetization veterans from leading companies like Moon Active and Rovio, where they had hands-on experience building a web store internally.
And we believe that for a web store platform to truly meet the needs of games publishers, it must be built by experts who’ve been in the trenches of mobile gaming.
This ethos permeates our customer success strategy: we work as an extension of our customers’ monetization team, consulting them in order to push their DTC strategies forward.
Those who try to justify the 30 percent tax taken by Apple and Google point to the payment complexities they take care of.
It’s true: managing payments is a complex, intimidating task.
However, publishers shouldn’t have to sacrifice such a significant chunk of their hard-earned profits just for payment technology and Merchant of Record services.
We believe there is a fairer way, a way that leaves publishers with a feeling that they have a partner to grow with, not a giant to shake them down.
From Code to Checkout: Tackling the Top 5 Challenges in Crafting Your Game’s Web Store
By now, it’s no secret that a web store is the golden ticket to catapulting your mobile game revenue into the stratosphere. But the path to building a successful web store is riddled with challenges, requiring a strategic combination of skilled professionals and a carefully allocated budget.
Game developers often plunge into this venture unaware of the intricacies, only to find themselves tumbling down the rabbit hole of unforeseen costs and missed deadlines. Here’s our top list of challenges to take into consideration before you start building a web store from scratch, to ensure you’re well-prepared for the complexities that lie ahead.
1. Assembling your team
Sure, assembling a team seems like a breeze: after all, your game studio is teeming with superstar developers, product managers, designers, and analysts. But how web-savvy are they? Proficient in game app development, your team might lack the expertise required for the intricate task of building a web store.
Moreover, as a game developer, you’ll probably want to prioritize… well, game development goals, reserving your best talents for the game, and leaving a junior team grappling with a sizeable project. Balancing your team’s skill set is crucial to the success of your web store venture.
2. Doubling your effort (and then some)
Building a web store is not a one-off event; it’s an ongoing endeavor. Unfortunately, we often see gaming companies launch a basic web store only to let it gather dust due to the costs of maintenance. Ensuring the commitment of your entire team, from marketing to LiveOps, increases the workload for everyone involved in terms of development as well as maintenance, but is also essential.
3. Being your own Merchant of Record
Launching a direct-to-player platform and avoiding the usual 30% transaction fees is (oh so) enticing, but what does it mean to handle your own transactions? How expensive is it? In case you decided to build both a web store and a checkout system, you are now not only delving into the web development sphere, but also embarking on a journey into the complex world of payments.
Becoming your own Merchant of Record means grappling with local taxes, currencies, exchange rates, invoicing, billing and fraud prevention. This newfound responsibility introduces the risk of exceeding chargeback limits, potentially resulting in penalties or even the blocking of your game by payment providers. If managing these financial intricacies seems overwhelming, opting for a third-party payment solution is a prudent choice.
4. Getting players to your store
Bringing players to your store is a challenge in itself. Due to legal constraints, advertising your store within your game is impossible. You’ll need a creative approach to user acquisition, including retargeting campaigns, direct messaging your whales, and leveraging online communities on platforms like Facebook, Instagram, or Discord, depending on where your audience is.
Training your community and account managers to navigate this uncharted territory is essential. Opting for an out-of-the-box store via a dedicated platform can be helpful, as the supplier can offer best practices and insights based on player behavior patterns across the industry. While you’re at it, be sure to also ask them for business strategy recommendations regarding which monetization tools are best to use for your particular game.
5. Keeping up with industry trends
The gaming industry moves at breakneck speed. New monetization tools emerge daily, promising unprecedented revenue increases. Amidst the daily grind of game maintenance, player management, and team oversight, keeping pace with these innovations becomes a formidable task. Developing and introducing new web store monetization tools to your audience requires vigilance, dedication, and of course, a substantial part of your budget.
Embarking on the journey of building a web store is undoubtedly an ambitious undertaking. But with meticulous planning, the right team, a decent budget and a clear understanding of the challenges, you can transform this endeavor into a lucrative opportunity for your game.
Play it Safe: The Appcharge Approach to Risk Mitigation
As game developers, we pour our hearts and souls into creating captivating experiences, while the risk of fraud and fraudulent chargebacks is always lurking in the shadows. The need for a robust risk mitigation strategy has never been more crucial.
In this article, we’ll delve into why risk mitigation is paramount for mobile game developers and explore how the Appcharge platform empowers you to safeguard your transactions effectively.
Appcharge’s Fraud Score
At the heart of Appcharge’s risk mitigation strategy lies the Fraud Score. Every transaction passing through our platform is meticulously evaluated and assigned a fraud score. This score serves as an initial assessment of the transaction’s risk level.
But how is this score calculated? It’s a blend of cutting-edge algorithms and historical data analysis. We consider various factors, such as transaction history, user behavior, and payment method, to assign a score that reflects the likelihood of fraudulent activity.
Transactions with high fraud scores aren’t dismissed outright. Instead, they are flagged for further review. We understand that false positives can be costly, so our approach is not overly cautious. Instead, it’s calculated and precise.
In our commitment to excellence, Appcharge collaborates with third-party anti-fraud software of the highest standards. This partnership ensures that our fraud detection capabilities are at the forefront of industry security. Your peace of mind is our priority.
Blacklisting Serial Fraudsters
At Appcharge, we have zero tolerance for serial fraudsters. Our platform blacklists individuals with a history of fraudulent activities across all games, creating a robust shield against repeat offenders.
Machine Learning Customization
Our machine learning capabilities allow you to define custom rules based on your unique business goals. Alternatively, you can opt for our recommended optimal settings, harnessing the power of AI to protect your transactions.
Optimized Manual Review
Appcharge streamlines the manual review process. We provide a centralized view of all flagged transactions, accompanied by rich contextual data explaining why each transaction was flagged for review. This ensures that your team can efficiently evaluate and address any concerns.
Extra Authentication for High-Risk Transactions
We understand the delicate balance between security and user experience. Appcharge applies extra authentication measures to high-risk transactions, without compromising your conversion rates. This targeted approach ensures that only transactions with elevated risk receive additional scrutiny.
Multiple Payment Methods
Offering multiple payment methods minimizes risk by adding layers of security and verification, making it harder for fraudsters to exploit vulnerabilities. Digital wallets require extra customer verification, such as biometrics or passcodes, while bank debits add an additional layer of security by verifying account ownership.
By providing these secure payment options, Appcharge ensures not only a smooth user experience but also a significant reduction in the risk of fraud, safeguarding both your revenue and player trust.
Chargeback Fraud: Navigating the Storm
Chargebacks can be costly, both financially and in terms of reputation. If your business loses a dispute, you could be liable for more than just the original transaction amount. Here’s how to handle chargeback disputes:
Customer-Centric Approach: When a dispute arises, it is recommended you proactively reach out to the customer, aiming to resolve the issue amicably.
Submitting Evidence: Timeliness is key. While reaching out to the customer for resolution, it’s crucial to also submit evidence within the required timeframe to prevent default wins for the other party.
Card Issuer’s Decision: It’s essential to note that Appcharge doesn’t make the final call on dispute outcomes. Card issuers have the authority to decide. We play our part by confirming that the evidence submitted meets requirements and promptly communicate the decision to you through our dashboard, webhooks, and API.
Appcharge’s multifaceted approach, encompassing advanced fraud detection mechanisms, efficient chargeback management, and the provision of secure payment choices, empowers developers with invaluable defenses against the evolving landscape of mobile gaming risks.
Understanding and implementing these strategies ensures that developers can forge ahead in their creative endeavors, fortified by the knowledge that Appcharge is a trusted partner in their journey.
Google Play Proposes Third-Party Payments in the UK – But is it a Good Deal for Developers?
The proposal, if enacted, would enable developers who provide options for both Google Pay and alternative billing to have Google’s revenue cut reduced by 4% to a 26% share (or 11% on their first $1 million)—if users pay through a different payment service provider (PSP). However, if developers do not offer Google Pay as an option, they will be penalised and the standard platform fee would only be cut by 3% to 27% (or 12% on their first $1 million).
Should users choose to pay with Google Pay, the revenue share will remain at a 70/30 split.
The changes would be rolled out for non-gaming apps first, before eventually allowing games developers to be eligible for the new billing rates and options “no later than October 2023”.
Google claims this would help ensure a “smooth transition for developers and to allow for the necessary changes to be made to our systems”. For context: In Q1 2023, data.ai estimates a large majority of worldwide consumer spending on Google Play came from the games category. It’s effectively a cash cow that is often treated differently by mobile platform holders than other categories.
The proposed changes would only impact in-app purchases in the UK, though similar actions have been taken in other countries.
Why Proposes Third-Party Payments Now?
Google’s announcement comes in response to an investigation by the UK’s Competition and Markets Authority (CMA), which began in June 2022, to look into “suspected anti-competitive conduct” by the tech giant. A particular focus of the ongoing investigation concerns Google Play’s rules which “oblige app developers offering digital content to use Google Play’s own billing system for in-app purchases”.
At present, the CMA’s position is that it believes the new commitments from Google are “sufficient to address the competition concerns”. While no final decision has been made, pending consultation, the CMA has proposed to accept the changes.
What Do the Changes Really Mean?
Any climbdown from the standard 30% revenue share should be considered significant, as Apple and Google fight tooth and nail to retain the status quo. This latest proposal is another example of platform holders making as small a concession as possible to retain their lucrative cash cows.
But while it may seem like a concession, for developers, the reality is that it will not make a notable difference to their businesses on the current terms. A reduction of 3% to 4% will not cover the costs of using an alternative billing system, where the revenue share is often 5% or more (AppCharge takes a 5% cut per transaction).
PSPs charge such fees to cover the costs of billing, invoicing, fraud, chargeback cover, etc. Such a small reduction in Google’s share means that, should customers use another payment system, it would actually cost developers a greater share of their revenue, not reduce it.
These terms mean that Google Pay keeps its position as the preferential payment method, while creating a challenging environment for alternative options. And of course, in any event, Google will continue to maintain its standard 30% share on all Google Pay transactions, thus effectively retaining the status quo. Of course, if you’d like to discuss potential alternative PSPs for an both in-app and out-of-app solution, you can speak to the AppCharge team.
Rick VanMeter, executive director of advocacy group The Coalition for App Fairness, which champions app store reform, told TechCrunch he believes the proposals would enable Google to “continue taking a massive cut on services they do not even provide”. He added: “This solution will not create meaningful competition and is a bad deal for developers and consumers.”
It remains to be seen whether the CMA will ultimately accept or reject Google’s proposals, and what the future of third-party payments will look like on the marketplace in the UK.
Regulatory Pressure
Apple and Google have both come under increasing pressure around the world over concerns about anti-competitive practices, namely over the exclusive use of their own payment systems in their app stores.
The UK proposal is now following suit with its previous successful negotiations with regulators.
Out-of-App Solutions
While it’s a positive step for Google to introduce alternative billing systems on its UK Play store, the current proposals aren’t a particularly attractive proposition. For developers really looking to take advantage of the $30 billion opportunity in the mobile games market – which is the amount of revenue the App Store and Google Play took last year from in-app purchases – the best solution still remains in utilising web stores.
By bringing your community of players to a web store, developers can offer better deals to players, all while retaining a higher share of revenue. Regulators continue to chip away at the app store monopolies, but the industry is a long way off from a fairer deal for all.
