What is Platform Fee?
Definition
A charge levied by a marketplace or platform for facilitating transactions between buyers and sellers.
Understanding Platform Fee
Platform fees are how marketplace subscription services generate revenue. Examples include Apple's 30% App Store commission, Etsy's transaction fees, and Stripe's payment processing fees. These fees can significantly impact the economics of subscription businesses built on platforms.
The 'Apple tax' debate has led to regulatory changes in some regions. For consumers, platform fees are usually built into subscription prices. Understanding them helps explain why some apps cost more on certain platforms or why services offer discounts for direct billing.
Related Terms
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.
Pricing Model
The strategy a subscription service uses to structure its pricing, including flat-rate, tiered, usage-based, or hybrid approaches.
Marketplace
A platform where multiple subscription services can be discovered, compared, and purchased from a single location.