Apple: How Apple's fee exemption program for in-app video purchases works

Amazon’s Prime Video app now offers rental and in-app purchases on Apple platforms. While this is new, there is much more to happen – including the previously obscure Apple initiative that made this possible.

The change applies to all Prime Video applications for Apple platforms, including Apple TV.

The new buying behavior is not, as previously thought, that Amazon is ignoring the 30% purchase on the Apple app. In fact, it is the result of a new Apple program that gives the green light to direct transaction management for certain video streaming applications. That’s how it works.

Apple video purchase exemptions

Exceptions in the Apple app, which the company released at Appleiphonestop on Wednesday, surprise many Apple users. But the functionality has been around for some time.

According to an Apple press release, the company offers similar exceptions through an “established program” for in-app purchases for smaller, international services like Altice One and Canal +. However, many know only the program thanks to the recent addition of Amazon.

Essentially, the program allows “premium video subscriptions” to offer purchases or rentals of direct content using the current customer’s credit card. This allows Amazon to ignore the 30% reduction in the App Store that Apple typically uses for in-app purchases and subscriptions.

But there is something else in the Amazon program and a new content behavior that you should keep an eye on.

If you are a Prime subscriber

If you are currently a Prime subscriber, Amazon will simply charge the credit card you have on file.

Current Amazon Prime subscribers can log into the Prime Video app with their credentials and immediately purchase or rent video content.

Instead of routing payments through Apple, Amazon will simply charge your credit card that they already have on file.

These transactions are processed directly by Amazon, so that they do not impact the purchase guidelines or typical Apple features. Although you technically make an in-app purchase, it is not an in-app purchase on the App Store.

As we said, this behavior is sanctioned by Apple only because Amazon is a ‘premium content provider’. So don’t expect other types of services, like Spotify, to offer similar in-app purchases.

If you are not a Prime subscriber

Amazon account holders who do not all subscribe to Prime will not see the new buying behavior on their side.

In other words, if you try to buy or rent a movie with your non-Amazon Prime account, that transaction will be considered an in-app purchase on the standard App Store. Apple takes care of this and receives 30% of the value as part of the discount.

And, interestingly, if you go to the Amazon website, you will see the payment method for your Prime Video subscription on iTunes. However, Amazon does not appear to be raising the price of subscriptions managed by Apple.

Note that this is true even if you have an existing Amazon account with registered payment options. Patented purchases are only available to Prime subscribers.

Be careful with your Amazon Prime plans

Fortunately, Amazon will notify you before charging you twice for Prime benefits.

This brings up one more point about the new partnership: you may be charged twice if you are not careful.

Amazon currently offers two types of Prime plans. One is a complete Prime plan, which includes free delivery of retail products and other benefits. The second is a standard Prime video plan that offers only video content benefits.

If you sign up for the second type of subscription by Apple, but later on Full Prime, you will not receive any discounts. In fact, you only need to pay the full amount for both.

For this reason, if you want to take advantage of Full Prime, including the benefits of video, we recommend that you cancel all subscriptions made by Apple before registering on the Amazon website.

Where is Apple going with this?

Amazon is one of the largest video providers currently on the market, and inclusion in the program created by Apple is likely to announce what is to come.

With Apple looking to expand its own content offering, in addition to selecting third-party content, it makes sense that the company is playing well with the other big names in the streaming industry.

And other premium content providers can take advantage by maintaining the total cost of in-app transactions.

Obviously, it remains to be seen how many partners will be added to the exemption program and who exactly they could be.

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