Monetize Your App & Avoid App Store Fees: Beginner's Guide

Creating the right monetization strategy is difficult, but the hardest part is actually figuring out how to make money and charge the user for something without causing the opposite reaction - making them leave the app. To create a plan that will surely lead to profit, you first need to do market research and analyze user behavior, but that’s just one part of the entire process.

To keep your users happy while also having an app that generates revenue, we’ve created this guide to not only explain the necessary information but also provide tips on how to save your budget and avoid fees charged by app stores.

Breakdown of typical fees on Apple App Store and Google Play Store

Do apps have to pay to app store? Yes.

We’ll briefly go through the costs you’ll definitely face if you want to publish your app on the Apple App Store or Google Play Store. As you probably already know, the costs are higher for the Apple App Store, so we’ll start with that.

Apple App Store Fees

To publish apps on the App Store, you must enroll in Apple’s Developer Program. That costs $99 per year for individuals and small businesses.

Apple takes a percentage of the money you earn from selling your app or from in-app purchases (IAP). That is 15% commission if your total revenue is less than $1 million per year and 30% commission if you make more than $1 million per year.

If you choose to sell premium features or subscriptions in your mobile app, Apple takes a cut of those earnings. It is 30% for the first year of a subscription and 15% starting from the second year.

Google Play Store Fees

You need to create a Google Play Developer account to publish apps on the Play Store.

Unlike the annual fee charged by Apple, here, you only need to pay a one-time fee of $25. Once you pay, you can publish as many apps as you want.

Google takes a percentage of the money you earn from app sales or in-app purchases. It is 15% for the first $1 million in revenue per year and 30% for revenue beyond $1 million.

If your app offers subscriptions or in-app purchases, Google also takes a commission. Since Google charges less, many people ask, "Does Google take 30% of in-app purchases?" The answer is yes. It takes 10% for subscriptions from day one (Apple charges 30% in the first year) and 15% or 30% for in-app purchases, depending on revenue.

Some regions allow app developers to use their own payment system instead of Google Play’s. If you use your own payment system, Google takes 26% instead of 30%.

Additional costs

Costs that may arise later, depending on the way you want to increase downloads, include paid ads to appear at the top of search results. If your app stores data (like images, videos, or user profiles), you may need services like Apple iCloud (for Apple users) and Google Firebase (for Android & iOS apps).

There are also third-party services tools like payment gateways, analytics, or push notifications, and some of them charge monthly fees.

So, how do you create the right app monetization strategy?

Imagine you’ve built an awesome mobile app, and now you want to make money from it.

You have 2 options:

1. Use the App Store’s payment system – Easy but expensive (they take a cut of your earnings).
2. Set up your own payment system – More control but a bit more work.

Here, we'll talk about the custom payment system and explain how it works and how you can do it the smart way and save money.

Ways for mobile app monetization  

After researching your target audience and market and after creating a detailed plan on the direction you want your app to develop, you need to decide how you will make money from it, i.e., how to charge your users. The mobile app monetization model defines how effective monetization strategy will be.

You can choose between the following app monetization models:

Subscription model

Users pay regularly (monthly, yearly, etc.) to access your app or a set of features. Netflix and Spotify earn with this app monetization method.

You offer a premium version of your app with extra features or content that users can access by subscribing. Subscriptions are usually auto-renewable, so users don’t need to pay again manually. That way, you get stable income and can manage finances more easily since you understand the inflows more clearly. But be careful - if users don’t find value, they’ll cancel subscriptions.

One-time purchase

Users pay a one-time fee to download or unlock the app, and they get full access to all features. The app usually doesn’t require future payments unless you release a paid update.

This monetization model is easy for users since it doesn't require long-term commitment, and there are no hidden fees, so they are more likely to decide to spend money.

In-app purchase

The app is free to download, but you can offer premium features or additional content inside the app that users can purchase.

Users like free apps, but the key is to often remind them to purchase while using the app, making the purchase feel optional but tempting.

Payments outside the app

This method avoids App Store fees and redirects users to pay on your website or through an external payment system.

Once the user pays on the website, the app verifies their payment and grants access to the premium features.

Tip: Be careful with Apple’s guidelines if you’re developing for iOS. Avoid mentioning “buy here” or “subscribe here” inside the app.

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How do you pick the right payment system?

To increase your revenue and ensure users don’t leave the app at the moment of payment, it’s important to choose the right monetization model and select a good payment system. It should depend on your pricing model, iOS or Android platform, target audience, etc.

Since you don’t want to use App Store payments, you'll need a third-party payment system. Some popular ones are:

1. Stripe

They say Stripe is best for most apps. Why is that?

It supports credit/debit cards, Apple Pay, Google Pay, and various international payment methods. It's easy to integrate into apps and websites, making it ideal for subscriptions, one-time purchases, and even marketplace payments.

Stripe fees are lower than Google and Apple and cost 2.9% + $0.30 per transaction. Some potential problems may be that this payment system isn't available in your country because of restrictions, and you'll need a mobile app development company to integrate it since it requires coding.

2. PayPal

PayPal is used and available in 200+ countries, making it a great option if you have a global audience. Many users prefer PayPal Checkout because they don’t have to enter their credit card details manually; they just log in and confirm the payment.

PayPal has higher fees compared to Stripe, 3.9% + fixed fee per country. A disadvantage is also the fact it can take a few days to transfer funds to your bank.

3. Google Pay and Apple Pay

This is the fastest option for users to pay inside the app, which increases the conversion rate. There is no need to enter card details, and there is a low risk for fraud since it uses device authentication like face ID and fingerprint.

Cons are that it requires users to have Apple Pay or Google Pay set up on their device and is not available in every country.

4. Cryptocurrency

If your audience includes crypto enthusiasts or tech-savvy users, accepting Bitcoin, Ethereum, or stablecoins (USDT, USDC) can be a unique selling point. Crypto payments are secure, and can have lower fees than traditional payment methods.

However, it is not widely adopted since most users still prefer credit cards or PayPal. Also, unless using stablecoins, crypto values can fluctuate, and some countries restrict crypto payments.

Pro tips to increase conversion rate

• Let users choose – Not everyone likes paying the same way. Some prefer PayPal, others use Apple Pay, and many just want to enter their card. Offering multiple payment options (Stripe, PayPal, Apple Pay) means fewer abandoned checkouts.
• Make paying effortless – The fewer steps, the better. Enable one-click checkout with Apple Pay and Google Pay so users can pay instantly without typing in card details.
• Save their payment info – Nobody enjoys entering their card details every time they make a purchase. Let users save their cards for faster future payments, but make sure you do it securely.
• Bypass App Store fees – If possible, use external payments (like Stripe on your website) instead of in-app purchases. This can save you from Apple’s 15-30% cut.
• See what works best – Track which payment methods your users prefer. If Apple Pay is driving the most sales, highlight it more. If PayPal is underperforming, consider removing it. Optimize based on real data.

Next step: Add payment system to your app

When you choose a payment system, you need to integrate it into your app. This isn’t just about adding a "Pay Now" button, you need to create a secure and user-friendly experience to monetize the app successfully. That is why choosing an experienced mobile development team needs to be included in your app monetization strategy.

Why is choosing a development team crucial for app monetization?

The checkout process has to be intuitive and fast. If it is slow and confusing, users will easily abandon their purchase. Your development team will integrate your chosen payment processor (Stripe, PayPal, Google Pay, etc.), ensuring that payments are processed correctly and securely, money goes directly into your bank account without delays and transactions are handled efficiently.

Payment processing is complex; if something breaks, you could lose revenue or face angry customers. A good mobile app development team makes sure everything works flawlessly.

Another reason to hire developers to improve paid apps is because users expect instant access after payment. If they don’t get what they paid for right away, they’ll be frustrated and might demand a refund.

Keep in mind that security is non-negotiable when handling payments. If your app isn’t secure, you risk fraud and losing user trust. A professional development team ensures everything is locked down and compliant.

How to avoid App Store fees?

Apple and Google take a 15-30% cut from in-app purchases (IAPs). But of course, it’s not that easy to bypass the fees they take, which is why it’s important to know the tricks to avoid App Store rejection.

After you decide on an app monetization model, the next step is to use external payments and redirect users to your website. When a user wants to upgrade or buy something, your app opens a new web page where they can pay via Stripe, PayPal, or another provider. Once they pay, your app unlocks the premium content or subscription automatically.

Important tip: Apple has strict rules about promoting external payments inside the app, so avoid phrases like "Subscribe on our website." Instead, say something neutral like "Already a subscriber? Log in here."

Even though Apple takes a cut from in-app purchases, they don’t charge fees for Apple Pay used on a website. When a user clicks “Subscribe” in your app, redirect them to your website to pay. They can use Apple Pay just like they would in the app, but you keep 100% of the revenue.

Important tip: Since Apple Pay works with Safari, encourage iOS users to open your website in Safari for a fast one-click payment experience.

You can also offer some discounts and coupons to move users to your website. For example, let users start with a free trial inside the app. Before the trial ends, send them an email with a discount if they upgrade via your website. This encourages users to pay outside the App Store, saving you from Apple’s fees.

Important tip: Instead of just telling users to subscribe to your website, make it feel like an exclusive deal by offering bonus features and discounts.

If your app makes less than $1 million per year, consider applying for Apple’s Small Business Program, which reduces the fee to 15% instead of 30%.

Important tip: If your app makes over $1M, you can create multiple companies and launch separate apps under different accounts. This keeps each one under the limit and qualifies them for lower App Store fees.

In-app advertising as a way for app monetization

If you want to make money from your app without charging users directly, in-app advertising is one of the best options. It allows you to offer a free app while earning revenue from ads displayed inside the app.

How do in-app ads work?

First, you need to choose which types of in-app ads work better depending on the nature of your app and your audience. Here are most popular types of mobile advertising:

Banner Ads

These are small ads placed at the top or bottom of the screen and are best for passive income without interrupting the user experience.

Interstitial Ads

Full-screen ads appear when a user finishes some action, for example, after finishing a level in a game. It is best for apps where users take breaks between sessions.

Rewarded Video Ads

Users watch a video ad in exchange for a reward, like extra lives in mobile games. It is best for gaming and productivity apps where users want extra perks.

Native Ads

Ads that look like they are already part of the app's content. They are usually used for content-driven apps like news, blogs, or social media.

Interactive Ads

Ads that let users try a version of other mobile apps before installing them. Best for mobile games looking to attract players.

Want to know more about in-app monetization strategy? You can find more information here.

Test your mobile app monetization strategies

Testing and optimization aren’t just crucial for ads, they’re essential for any monetization strategy.

Use A/B testing to check user acquisition and conversion rate between freemium and paid apps, different subscription model (pay yearly, monthly etc.), exclusive access etc. The more you understand your users’ behavior, the more effectively you can optimize your monetization strategy and generate revenue quickly. Use analytics tools like Google Analytics to gather insights about user behavior and payment patterns so you can adjust your strategy accordingly.

Our clients' experience: How we helped them monetize the app

We'll take the experience with two of our clients as an example to explain how we avoided App Store fees.

First client: clearly defined mobile app monetization strategy

At Aetherius Solutions, we’ve had the opportunity to develop the Kotlin Multiplatform app and implement payment systems and monetization features. App monetization has focused on enabling two distinct monetization models within the app:

1. Banner Ads
   We integrated a section in the app where businesses can advertise their services. For example, a company can pay on a monthly or yearly basis for their banner to appear within the app. The payment structure is flexible, depending on the agreement made between the business and app owners.
2. Gold and Blue Ads
   This feature caters to people who want their ads to stand out. By selecting a "Gold" or "Blue" ad option, the ad is highlighted with a different color, making it more visible and even ranking it higher in search results compared to others.

Currently, both monetization models rely on traditional bank transfer payments. If a business expresses interest in a banner ad or a gold advertisement, they reach out to the app owner, who provides them with the necessary payment instructions. Once payment is confirmed, we ensure the ad is added to the app or upgraded to gold status. Additionally, app’s dashboard allows them to manage and control these ads independently.

This streamlined approach to payment systems has allowed our client to easily manage transactions while offering a simple yet effective way for businesses and craftsmen to promote themselves. You can read more here about how the app is developed.

Second client: change of monetization model as the app downloads grow

This client initially had a section on the app's homepage where three products would rotate (similar to the gold ads in the previous example), charging businesses to feature their products there. For example, a company with a new product could pay to be showcased on the homepage. This strategy is common in apps with large user bases, as it allows businesses to reach a broad audience that already trusts the app, increasing the likelihood that users will purchase the featured product. Along with this, the app owner also had a list of all products where monetization occurred on a per-click basis.

Now, there are two ways to charge users directly through mobile apps:

1. Card Payment (via a payment processor):
   This method requires integrating a payment processor into the app, this is where our team was particularly important. When users reach the payment stage, they are prompted with a screen to enter their card details.
2. Apple/Google Pay:
   Apple and Google Pay are built-in payment options in apps, where users can quickly complete a purchase by clicking and using the default payment screen. This is a very easy and common method, as people who are comfortable with this type of payment often prefer using it.

For card payments, the payment processor needs to be integrated into the app, and this also needs to be set up on the website if you want to offer card payments there.

In the case of our client, we introduced a subscription model for them, and currently, the subscription can only be purchased via the App Store and Google Play; card payments are not yet available.

However, to avoid the high fees that Google and Apple charge, a client created an additional form on the website through which users can sign up. Card payments were not set up there either. Instead, people sign up, and the team sends them an email with instructions to make a bank transfer. Once the payment is confirmed, a client approves access on the dashboard, thus bypassing the app store payment systems entirely.

Read more about this case study.

Conclusion

Monetizing your app and avoiding App Store fees is a strategic approach that requires thoughtful planning so you can generate revenue and start earning money quickly. By implementing multiple monetization methods, you increase the chances that users will be satisfied with the app and be more likely to make a purchase.

Don't give up if you don't get the perfect monetization model on the first try. It's a testing process that you have to go through, and even the most successful businesses experience it. Remember that choosing the right development team is crucial for avoiding App Store fees the right way. Integrating external payment systems is a process that needs to be secure and smooth.

By following the steps in this guide, you’ll increase your app’s chances of success, ensuring that users are satisfied and your revenue grows. Now, what are you waiting for? Let's talk and start monetizing your app today!

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