AI-Powered App Monetization Beyond App Store Fees

App monetization just changed in a very practical way: in 2025, both major mobile platforms loosened the rules that forced most digital-goods revenue through app store billing. Google now allows US Android apps selling digital goods to use third‑party payment providers in-app, and Apple’s 2025 guideline updates allow apps to link out to pay on the web—often translating into meaningfully lower fees compared to store billing.

A lot of teams are treating this like a pricing decision (“Great, we’ll pay less”). That’s the wrong framing. The real shift is an infrastructure decision: if you step outside app store billing, you also step into merchant responsibilities the app store used to shoulder—tax, fraud, disputes, subscription lifecycle, customer comms, and reporting. In the AI in Payments & Fintech Infrastructure series, this is exactly the pattern we keep seeing: when distribution platforms relax constraints, payments infrastructure becomes the differentiator.

What follows is a practical blueprint for building the next wave of app monetization: where AI helps (and where it doesn’t), what you must own vs. outsource, and how modern providers package merchant-of-record, optimized checkout, and billing so you can keep control without turning your product org into a mini payments company.

The new app monetization reality: freedom comes with ops

If you use third-party payments for digital goods, you gain control over pricing, checkout UX, customer data, and revenue retention. You also inherit the “boring” jobs that quietly keep revenue predictable.

Here’s the clean way to think about it:

• App store billing optimized for simplicity, not for your business model. It’s great at being one default path.
• Third-party billing optimized for flexibility, but requires a real payments stack.

A useful mental model is to break “app monetization” into three layers:

1. Merchant layer: Who is the merchant of record? Who calculates/remits taxes? Who handles chargebacks? Who owns compliance obligations?
2. Checkout layer: Where does the customer pay (in-app, app-to-web, or hybrid)? What payment methods are offered? How are conversion and authentication handled?
3. Billing layer: How do you manage subscriptions, upgrades/downgrades, usage-based pricing, dunning, retries, credits, proration, and customer self-serve?

App stores used to bundle all three. If you unbundle, you need to reassemble them—ideally with infrastructure that already embeds fraud detection, routing intelligence, and lifecycle automation.

Merchant of record isn’t a checkbox—it's your risk boundary

Answer first: If you want to monetize outside app stores without adding a permanent tax/fraud/support burden, you need a clear merchant-of-record (MoR) strategy.

When teams first leave store billing, they often underestimate how quickly MoR responsibilities show up in product roadmaps. It starts with “we’ll add Stripe for payments,” then becomes:

• “We need VAT/GST rules per country.”
• “We need receipts that meet local requirements.”
• “We need a dispute response workflow.”
• “Support is drowning in cancellation requests.”

That’s why merchant-of-record services are having a moment. Stripe’s Managed Payments is positioned to take on the MoR workload for iOS and Android developers, including:

• Global tax compliance (calculation, collection, remittance)
• Fraud and risk management
• Disputes and chargebacks
• Customer support and subscription management
• Faster payouts (Stripe cites 5–7 days vs. typical monthly store schedules)

From an infrastructure lens, the MoR layer is where you decide your risk boundary. If you’re a small team or scaling internationally, outsourcing MoR often keeps you from building a patchwork of vendors and spreadsheets.

Where AI fits at the merchant layer

AI adds real value here, but only if it’s connected to the transaction system:

• Fraud detection improves when models can learn from broad cross-merchant signals and your own historical patterns.
• Dispute workflows get better when you can auto-assemble evidence packets, detect repeat abusers, and route edge cases to humans.
• Tax classification benefits from structured product catalogs and rule engines, with ML assisting classification suggestions—but you still need deterministic rules to stay compliant.

My opinion: AI should reduce manual review, not replace accountability. In payments, “mostly right” is expensive.

Checkout is now a product surface—treat it like one

Answer first: The moment you control checkout, conversion becomes your responsibility—and your advantage.

App stores historically gave you a familiar, trusted payment surface. Moving outside that surface introduces two big risks:

1. Conversion leakage (especially app-to-web redirects)
2. Engineering drag (PCI scope, authentication flows, payment method sprawl)

Stripe’s approach in the source article is to cover both native and app-to-web cases with prebuilt checkout components.

Native in-app payments on Android: Payment Sheet

For Android, Stripe highlights Payment Sheet, a prebuilt native checkout that can be presented anywhere in your app. The infrastructure wins are straightforward:

• Access to 125+ global payment methods
• Express pay options and confirmation flows built in
• UI customization (colors/fonts) without redesigning the entire payment experience
• The ability to dynamically order and display payment methods with built-in AI models

That last point matters more than it sounds. Payment method choice isn’t just “offer more.” It’s “offer the right ones, in the right order, for this user, in this context.” This is a classic AI in payments infrastructure problem: optimize for acceptance and conversion while controlling fraud and cost.

App-to-web on iOS: make redirects behave like a single flow

For iOS, where linking out to web checkout is now permitted under specific guidelines, Stripe promotes Checkout for app-to-web payments. The goal is to minimize the conversion penalty of leaving the app.

The features called out are exactly what you should look for in app-to-web infrastructure:

• Fast mobile loading (critical on cellular)
• Brand matching so customers don’t feel like they’ve been bounced somewhere sketchy
• Promotional tooling and flexible subscription management
• One-click payment methods to reduce form fatigue
• Maintaining login state across app-to-web transitions
• Saving carts across redirects to reduce drop-off

Here’s the thing: app-to-web doesn’t fail because users hate the web. It fails because teams treat the redirect as “someone else’s page.” If you’re going to redirect, the infrastructure has to keep the customer’s intent intact—identity, cart, plan selection, promo eligibility, and post-purchase return path.

A practical checkout KPI set (what to measure in Q1)

If you’re re-platforming monetization now, don’t just watch “conversion rate.” Split it:

• Checkout start rate (paywall → checkout)
• Payment method selection rate (users choosing a method vs. abandoning)
• Authorization rate (issuer approval)
• SCA/3DS completion rate (where applicable)
• Time-to-pay (seconds from checkout open to success)
• Refund and dispute rate (early signals of mismatched expectations)

These are the metrics AI can actually influence—through method ranking, fraud scoring, and smart routing.

Pricing control is the real monetization unlock (and it’s not just subscriptions)

Answer first: The biggest win from leaving app store billing is pricing flexibility—because pricing is how you match value to customer behavior.

App store tiers tend to nudge businesses toward simple monthly/annual subscriptions. That works for some products, but it’s a poor fit for many modern apps—especially AI tools whose costs and user value are often usage-based.

Stripe positions Stripe Billing as the control plane for:

• Subscriptions
• Usage-based pricing
• Pay-as-you-go models
• One-time charges
• Trials, intro discounts, upgrade incentives

This is where the “AI in payments & fintech infrastructure” theme becomes very concrete: AI products frequently need pricing that tracks tokens, minutes, seats, credits, exports, or workflow runs. Billing systems that can meter usage, invoice accurately, and handle proration and plan changes aren’t a nice-to-have—they are the product.

Revenue recovery is where AI quietly pays for itself

Stripe calls out Billing recovery tools like Smart Retries and workflow automation, noting that Stripe recovery tools helped users recover over $6.5 billion in 2024.

That number is a reminder that failed payments aren’t a rounding error. They’re often the difference between “we’re growing” and “we’re leaking.” Smart retry logic is a good example of applied AI in fintech infrastructure:

• Retrying at the right times based on issuer behavior
• Avoiding excessive retries that trigger fraud/risk flags
• Routing exceptions into customer-friendly dunning flows

My stance: if your team is spending time manually chasing failed renewals, you’re funding churn with payroll.

A build-vs-buy checklist for teams exiting store billing

Answer first: If you don’t write down what you’re inheriting from the app store, you’ll rediscover it the hard way.

Use this checklist to decide what you’re building, what you’re outsourcing, and what must be tightly integrated.

Compliance and operations

• Do you need merchant of record coverage for taxes and regulatory obligations?
• Who handles chargebacks end-to-end (evidence, deadlines, representment)?
• What’s your support path for cancellations, refunds, and billing errors?

Payments performance

• Which payment methods matter in your top 5 geos?
• Do you have tooling for payment method ranking and experimentation?
• How will you monitor authorization rate and diagnose issuer declines?

Billing lifecycle

• Can you support upgrades/downgrades, prorations, and credits cleanly?
• Do you need usage-based billing tied to product telemetry?
• Do you have automated dunning, smart retries, and customer self-serve?

Data and AI readiness

• Is your payments data structured enough to power models (fraud, ranking, churn)?
• Can you run A/B tests without shipping new app versions every time?
• Do you have a single view of customer identity across app + web?

If more than a third of these are “not sure,” strongly consider an integrated stack rather than assembling vendors.

What this means for the next wave of app monetization

App monetization is shifting from “pick a store tier” to operate a real revenue engine—one that can handle global compliance, optimize conversion, and adapt pricing as your product evolves. That’s why payments infrastructure is becoming a core product competency, not a back-office function.

The teams that win in 2026 won’t be the ones who simply pay lower fees. They’ll be the ones who treat checkout, billing, and revenue recovery as part of the product—and use AI where it actually has leverage: fraud reduction, payment method ordering, smarter retries, and operational automation.

If you’re planning your Q1 roadmap, here’s the question worth debating internally: when customers pay outside the app store, do you want payments to be a risk you manage—or an advantage you compound?