Tech giant, Apple released new guidelines addressing NFTs and other content on crypto trading apps yesterday. This development shows that for the first time, Apple is clarifying specific rules for the purchase of NFTs.
Taking into cognisance the size of the iOS apps market, it is going to have a tremendous effect on the development path that decentralised applications will choose subsequently.
A look at the new rules
According to the updated App Store guidelines, now, developers will be able to leverage In-App Purchase (IAP) to sell NFTs or offer services tied to them like minting, listing and transferring.
But, NFTs acquired from other platforms apart from Apple are limited to viewing functions.
However, developers will not be able to implement alternative payment solutions, so users will be limited in the ecosystem created by Apple. And, Developers are only allowed to give users the option to pay for purchases within the apps.
This means that they cannot go to external platforms to pay. Since Apple does not support crypto payment options, this means that payments using crypto coins or tokens will not be allowed.
“Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app. Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.” – Apple Guidelines.
Furthermore, Apple is not going to allow the use of NFTs as keys to unlock premium content or additional functionality. Basically, Apple is saying it is fine with letting NFTs be viewed and used, but the ability to use NFTs to acquire more features is prohibited.
Also, Apple will be preventing apps from unlocking any content and functionality by using mechanisms such as “QR codes, cryptocurrencies, and cryptocurrency wallets”.
On taxation of NFT sales, Apple has integrated the in-app NFT purchases to apply a standard 30% commission rate on all purchases. All trades will attract a 30% Apple tax for NFT marketplaces.
It further adds:
“Apps may facilitate transactions or transmissions of cryptocurrency on an approved exchange, provided they are offered only in countries or regions where the app has appropriate licensing and permissions to provide a cryptocurrency exchange”.
Conventionally, Apple is known for taking a 30% cut on in-app purchases (branded the Apple Tax). It is not shifting its position for NFTs.
Just to note, the company has always faced backlash for its 30% commission on NFT sales conducted through apps of popular NFT marketplaces like OpenSea or Magic Eden. It is considered overpriced because the average commission on NFT purchases is around 2.5%.
Owing to the exorbitant taxes, Magic Eden earlier said that they have scaled back their functionality and removed the services from the App Store. With the Magic Eden Apple app, users can only browse and view their owned NFTs which limits the functionality.
Also, secondary NFT purchases can become a problem as exchanges like OpenSea, payment ramps like Moonpay and others will not be able to get into Apple’s payment flow, missing out on millions of dollars in revenue.
It is also heartwarming that NFTs are now making faster inroads in the crypto space and even global tech giants are warming up to it.
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