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A report by The Information claims that Apple is pressuring companies to pay its customary 30% fee for in-app purchases on all NFT trades, discouraging startups from providing services to the users of the tech giant.
“So far, though, most see some obstacles, including the up to 30 percent commission Apple charges on in-app purchases, as well as pricing conventions that are difficult to apply to volatile digital assets,” the report added.
The media outlet also quoted Magic Eden’s co-founder and chief technology officer, Sidney Zhang, who revealed that because of Apple’s fees, the company has never attempted to provide buy and sell functions on its app despite receiving a reduced offer of 15%.
As per the marketplace, only 2% of each transaction is taken by Magic Eden.
Trading volumes falling off
Notably, up until August, the NFT market witnessed a substantial drop in global NFT sales volume for seven straight months as investor interest in digital collectibles waned.
Be[In]Crypto previously noted that global NFT sales in July were roughly $647.23 million, compared to a sales number of $879 million in June. After reaching the second-highest peak in January with a sales volume of $4.78 billion, the 26% month-on-month decline was recorded to be the result of declining unique buyers.
Therefore, marketplace entrepreneurs apparently planned to increase sales through mobile apps because the NFT market was unable to hold up in the face of a general crypto weakness.
“It feels like the position is that Apple doesn’t really want [its] users to be able to purchase or sell NFTs,” Alexei Falin, CEO of NFT startup marketplace Rarible told the paper.
However, the question arises if Apple is losing out on a new customer base and potential revenue stream due to its existing model.
Should Apple explore the broader markets with new offerings?
According to a recent analysis by Juniper Research, there will be 40 million NFT transactions worldwide by 2027, up from 24 million in 2022 based on the firm’s moderate adoption calculations.
That said, Apple is reportedly not accepting crypto payments on its platform per se, making it all the more difficult to transact in NFTs. IANS quoted Arthur Sabintsev of Pocket Network stating that this “makes it really hard to price it because you have to program all these values in dynamically.”
In July, Senate banking committee chair Sen. Sherrod Brown asked Apple and Google to explain their procedures for vetting and approving crypto trading and wallet applications for download on their app stores. As Apple also came under fire for bogus crypto apps, the tech company recently dodged a proposed class action lawsuit due to a fraudulent cryptocurrency wallet app on its App Store. But it also becomes clear that because App Store is seen as a publisher of the content rather than a creator, it cannot be held accountable for the false apps under Section 230 of the Communications Decency Act as reported by Bloomberg.
During the company’s most recent press conference, which marked the release of the iPhone 14, fraudsters also reportedly succeeded in defrauding thousands of Apple supporters by endorsing a phony cryptocurrency.