Tech

Match Group wants to save money from Looser App-Store payment rules

Online dating company

Match group Ltd

Working on avoidance

Apple Of a corporation

Google’s payment system also follows a move by US and South Korean authorities to loosen the grip of tech giants on app store transactions.

Dallas-based Match (the company behind Tinder, Hinge, and OkCupid) relies on the app store to attract new users. The dating app is free to download, but users pay for subscriptions and other premium services such as the ability to see when another Tinder user reads a message.

With in-app charges to Apple

alphabet Of a corporation

Google is the biggest expense for matches, said Chief Financial Officer Gary Swidler.

Apple and Google will charge fees for payments made through apps offered through the store. In the case of matches, these fees represent approximately 30% of the revenue the company receives from such payments.

Federal Judge of California last week Apple decides it can’t block app developers From sending users out of the app store to pay. The proceedings were filed by Epic Games Inc, a video game company that is the maker of Fortnite. Was raised by.

Apart from this, Korean lawmakers The bill was passed last month This will take effect on Tuesday, requiring Apple and Google to open the app store with different payment methods.Match earlier this year Agreed to acquire Seoul-based social media company Hyperconnect has traded $ 1.7 billion. According to Match, HyperConnect’s business will be affected by the new law.

Gary Swidler, Chief Financial Officer and Chief Operating Officer of Match.


Photo:

Match Group Co., Ltd.

“From my point of view, this is like a domino effect around the world,” said Swidler, Chief Operating Officer of Match, in addition to CFO. “I think other jurisdictions will continue, so we have global business with multiple brands and we need to keep doing that.”

He said this year’s match expects Apple and Google to pay a transaction fee of about $ 500 million. The company did not disclose the exact amount to pay at such charges, which it records as cost of goods sold, and refused to provide a quote for the previous year.

According to Swidler, the online dating company is working on alternative payment options that it plans to offer to HyperConnect users in the coming months. As a result of the California ruling, he said such options could also be offered to Apple users. Match plans to offer discounts to users who pay directly to the company, but pricing details haven’t been revealed yet, he said.

The amount of money you can save depends on the number of customers who decide to switch payment methods, Swidler said. The company had about 15 million paying customers in the quarter ended June 30, an increase of 15% year-on-year.

An Apple spokeswoman said the company is considering a decision in a California court. Regarding the new South Korean law, Apple said it believes the measure could undermine the privacy of its users. “We believe that as a result of this law, users will lose confidence in their purchases on the App Store,” the company said.

“We intend to comply with South Korean law and will continue to consider options that allow us to keep Android free and maintain service fees to keep our investment in the ecosystem,” a Google spokeswoman said. I am. A spokeswoman said the company plans to share more information with developers in the coming weeks.

By offering a 10% discount on subscriptions, Match could persuade about one-third of Apple users to pay directly and offer the company an additional $ 80 million in gross profit, investment firm BTIG. Analyst Jake Fuller predicts.

Fuller estimates that about two-thirds of Match’s app store fees will be paid to Apple, and Match will make a gross profit of $ 2.2 billion this year.Match, it’s Last year, I spun off from my ex-parents

IAC / Interactive Ltd

, Said it does not generate gross profit.

Match earned a net profit of $ 140.9 million, up 88% year-on-year, in the three months ending June 30. Total revenue was $ 77.8 million, up 27% from the year-ago quarter, according to the company’s latest quarterly report.

In addition to offering discounts, Match plans to use the potential savings of changing payments to invest in new products and hire more people, Swidler said. rice field.

Write to Christine Broughton Kristin.Broughton@wsj.com

Copyright © 2021 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Match Group wants to save money from Looser App-Store payment rules

Source link Match Group wants to save money from Looser App-Store payment rules

Back to top button