In August, PayPal added a donation feature that allowed users to make charitable contributions from within the services's iPhone app. In late October, Apple made them pull the plug with no warning and little explanation.
Anuj Nayar, on behalf of PayPal, would only say, "I can confirm that we added the donations feature to our iPhone app in version 2.5 in mid August. We removed the feature in version 3.0 of our PayPal Mobile iPhone app. This was done at Apple's request."
A little background: to implement its donation feature, PayPal partnered with MissionFish, whose mandate is to help non-profits raise funds through online donations. In PayPal's case, users of the app would be given an option to donate to either a featured charity or one of nearly 18,000 organizations in the MissionFish database. Choose the non-profit, choose the amount, hit submit, and you were done.
Because PayPal already has a payment method on file for the user, it was essentially a two-click operation. And in the few months that the feature was operational, it had raised more than $10,000 at an average donation amount of $12.
Much of the feature's success came from its being an in-app transaction. That also turned out to be its downfall. Prior to the Oct. 26th release of PayPal 3.0, Apple decided that they wanted any donations to be completed in Safari, a sudden and unexpected move that would have result in a significant drop-off in participation. There hasn't been any further explication from Cupertino since then.
"Nonprofits are really stymied by the iPhone and this policy approach," says MissionFish's Clam Lorenz. "They're not sure what the policy is, because it seems vague or arbitrary."
PayPal's not the only charity app to experience a seemingly capricious App Store regulatory process. Givabit is a free app that features a different charity every day, encouraging users to make micro-donations. Getting the app approved was, according to co-founder Justin Kazmark, quite an ordeal:
"Apple was clear that any in-app transaction via iTunes would entitle Apple to 30% of that transaction — presumably charity donations included. Given the fact that we thought 30% was way too much to take from a $1 donation to charity, we had to come up with a different solution than to go through iTunes."
To avoid sending nearly a third of their donors' contributions to Apple, Givabit settled on the less-effective method of sending payments to the browser. Although that wasn't the end of it.
Apple's review team first sent back direction that Givabit couldn't specify what percentage of donations went to the non-profits (96.25%) and what went towards operational costs (the rest). The reason for that request, and others, was never made clear:
"We called up and asked for additional information about why we couldn't include that language. The person we spoke to was very unclear about what the policy was. We were also told that we couldn't use the term "Phonelanthropy," which we made up to describe what we were doing or the tagline we had on the app: "Microdonations. Macrobenefit." They said we would have to get rid of that, too. Basically, anything that alluded to charity/philanthropy they felt uncomfortable with but wouldn't articulate clearly what their policy was."
Later, Apple told Givabit to remove specific dollar amount buttons within the app, insisting that those be put on the Safari page as well.
While Apple hasn't fully explained its rationale to either Givabit or MissionFish, it's likely that they don't want to be liable for donation apps that turn out to be fraudulent. The best way to avoid that liability is block any and all in-app donations. If that's the case, though, it seems unusual that an exception couldn't be made for a known partner in good standing, like PayPal. And in-app purchases have been commonplace since iOS 3.0.
For its part, Lorenz says PayPal will introduce in-app donations to its Android app before the end of the year, while still waiting for Apple to further clarify why it reversed its position. And other charitable apps are left navigating the murky waters of App Store policy, hoping for clarity in time for the season of giving.