If you’re building an app that charges users money, where the payment happens is an important consideration. In-app billing runs transactions through Apple’s or Google’s native infrastructure, which means faster checkout and built-in subscription management—but usually at a cost of 15%–30% per transaction. Out-of-app billing routes payments through a provider you choose, which means lower fees, more flexibility, and direct ownership of the customer relationship—as well as more steps at checkout generally.

Below, we’ll discuss how each model works, the risks of in-app billing, and how to determine which model best fits your business.

Highlights

• In-app billing offers a faster, low-effort checkout experience but requires paying platform fees on every transaction.

• Out-of-app billing gives businesses direct control over payment relationships, subscription logic, and customer data, at lower processing costs.

• The right model depends on your margins, your subscription setup, and how much conversion risk you’re willing to accept on a web-based checkout flow.

What is in-app billing?

In-app billing is a payment model in which users complete purchases without leaving the app. The transaction is handled entirely by the platform (e.g., Apple’s App Store, Google Play) using its native payment system. When someone buys a subscription, unlocks a feature, or purchases a digital item, the platform processes the payment and remits the revenue to you after taking its cut. The global App Store environment, for example, facilitated $1.3 trillion in developer billings and sales in 2024.

What is out-of-app billing?

Out-of-app billing routes the transaction outside the platform entirely. Instead of paying through Apple or Google, the user completes their purchase on a web page. The payment goes through your payment provider, which processes the transaction and deposits revenue directly into your account. You manage subscriptions, renewals, cancellations, and refunds yourself, and the customer relationship is yours. The payment data, contact details, and billing history all live in your systems.

All iPhone Operating System (iOS) apps were previously forced to use Apple’s payment systems, but a US federal court ruling in the Epic Games v. Apple antitrust case changed that. Now, Apple must allow developers to point users towards external purchase options.

What are the differences between in-app and out-of-app billing?

The mechanics of in-app and out-of-app billing differ substantially. How those differences affect a business depends on its size, product type, and growth stage.

Here’s how your business can function differently based on the type of billing you use.

Revenue margin

Platform fees of 15%–30% are significant. For example, a subscription app that generates $1 million annually through Apple’s App Store will send upwards of $300,000 to Apple. Payment providers’ fees for out-of-app billing are often a fraction of that.

Subscription management

With in-app billing, the platform handles renewals, cancellations, refunds, and upgrade and downgrade flows. Developers receive server-to-server (S2S) notifications about subscription state changes, but the billing relationship is between the platform and the user. With out-of-app billing, you configure and manage renewals, cancellations, retries, and refunds directly.

Checkout friction

This is where in-app billing has a genuine structural advantage. The platform checkout is one or two taps for a user already logged in and uses whatever payment methods they’ve stored with Apple or Google. Out-of-app billing requires the customer to leave the app, complete a form, and then return. A faster, mobile-compatible web checkout converts better than a clunky one, but the native experience is hard to beat on raw speed.

Customer data

With in-app billing, Apple and Google own the payment relationship. Developers receive transaction data but not full customer payment details. Out-of-app billing lets you collect the customer’s email address, payment method, and billing history directly, which matters for win-back campaigns, payment retry logic, and subscriber analytics.

Subscription flexibility

Platform billing constrains what you can offer customers. Pricing tiers, trial lengths, and promotional offers have to fit within what Apple and Google support. Out-of-app billing lets you build whatever subscription logic your business requires, such as annual plans with monthly billing, usage-based components, multiseat pricing, and custom enterprise contracts.

Payment settlement

With in-app billing, Apple or Google collects the full payment, deducts its fee, and remits the remainder to you, typically on a monthly basis. With out-of-app billing, the payment provider processes the payment and deposits revenue into your account minus its fees.

Discoverability

Being in the App Store or Google Play grants access to its promotional infrastructure: featured placements, editorial picks, and search visibility. Moving transactions outside the platform doesn’t forfeit that directly, but it does change the nature of your relationship with the platform.

What are the risks and constraints of in-app billing?

In-app billing carries specific risks that developers often underestimate until they encounter them. Keep the following in mind:

• Platform policy changes: Apple and Google change their rules. If your revenue model is entirely dependent on their billing infrastructure and fee structures, you’re exposed to decisions you have no input on and no ability to hedge against.

• Refunds and disputes: Apple handles refunds for App Store purchases directly. A user can request a refund from Apple without contacting you at all, and Apple might grant it without consulting you. Google operates similarly.

• Subscription state complexity: Keeping your app’s internal subscription state in sync with Apple’s or Google’s can be difficult. Renewals, lapses, grace periods, and billing retry logic all require careful integration with platform notification systems. Developers routinely encounter edge cases where a user’s subscription status in the database disagrees with what the platform believes.

• Revenue recognition lag: Apple and Google pay on their own schedules, typically monthly. Out-of-app billing through providers like Stripe pays out on a configurable schedule.

• Prohibited categories: Platform rules restrict what can be sold through in-app billing. Cryptocurrency, certain financial products, and other categories aren’t eligible. Out-of-app billing through a payment provider expands what’s possible, within that provider’s acceptable use policies and applicable law.

Is out-of-app billing the right model for your app?

Out-of-app billing won’t be the right model for every app. But for many businesses, the math and the control argument are hard to ignore.

Out-of-app billing makes more sense when the following is true:

• Your margins can’t absorb platform fees: Platform fees hit hardest on lower-margin products and high-volume subscription businesses. The savings compound quickly once you’re past early-stage revenue.

• You need flexible subscription logic: If your business requires subscription structures that platform billing doesn’t support, out-of-app billing is your only real option.

• You want to own the customer relationship: Owning payment data, contact details, and billing history enables retention tooling, subscriber analytics, and win-back flows that platform billing simply doesn’t make available.

• Your users are comfortable with web-based checkout: This is more common in B2B contexts than in consumer apps, but it’s also true for many products with engaged user bases that are motivated to subscribe.

How Stripe Billing can help

Stripe Billing lets you bill and manage customers however you want—from simple recurring billing to usage-based billing and sales-negotiated contracts. Start accepting recurring payments globally in minutes—no code required—or build a custom integration using the application programming interface (API).

Stripe Billing can help you:

• Offer flexible pricing: Respond to user demand faster with flexible pricing models, including usage-based, tiered, flat-fee plus overage, and more. Support for coupons, free trials, prorations, and add-ons is built in.

• Expand globally: Increase conversion by offering customers’ preferred payment methods. Stripe supports 100+ local payment methods and 130+ currencies.

• Increase revenue and reduce churn: Improve revenue capture and reduce involuntary churn with Smart Retries and recovery workflow automations. Stripe recovery tools helped users recover over $6.5 billion in revenue in 2024.

• Boost efficiency: Use Stripe’s modular tax, revenue reporting, and data tools to consolidate multiple revenue systems into one. Easily integrate with third-party software.

Learn more about Stripe Billing, or get started today.