Digital Garage Updates ‘App Pay’ Platform to Bypass App Store Fees Following Regulatory Shift
Digital Garage has made a significant update to "App Pay," its third-party payment platform for mobile applications. The new user interface features a "Link-Out" capability designed to align directly with Japan's "Act on Promotion of Competition for Certain Smartphone Software" (Smartphone Act), which came into full enforcement on December 18, 2025.
Regulatory Catalyst and Strategic Response
The update leverages the newly enforced regulatory framework, which restricts dominant mobile OS providers from prohibiting third-party billing options. Previously, app developers faced significant hurdles in directing users to external payment pages—a practice known as "linking out."
With the regulatory barriers removed, Digital Garage’s new functionality allows developers to embed direct links within their native apps. These links transition users to the "App Pay" official web-based settlement page while maintaining the user’s session and ID. This integration aims to resolve the friction typically associated with external payments, ensuring a seamless purchasing experience similar to native in-app billing but often at a lower cost structure for developers.
Enhancing the "Store x Payment" Ecosystem
The company describes the update as a move to unify the app store and payment experience. Key features of the new system include:
- Seamless ID Integration: User IDs are automatically carried over from the app to the web payment interface, eliminating the need for repeated logins and reducing cart abandonment.
- Compliance Support: The platform automates the generation of transaction reports required by designated operators under the new regulations, reducing the administrative burden on developers.
- Zero Additional Implementation Costs: Developers can utilize the Link-Out feature without incurring extra setup fees.
Market Context and "DG FinTech Shift"
"App Pay" currently holds the top market share in Japan for third-party app payment platforms (based on the number of onboarded titles as of December 2025). The service provides a comprehensive suite of tools, including payment processing, web store CMS generation, customer support, and marketing.
This initiative is part of Digital Garage’s broader "DG FinTech Shift" strategy, which seeks to integrate payment, data, and technology. The payment infrastructure is underpinned by the group's subsidiary, DG Financial Technology, which boasts a robust transaction volume exceeding ¥7.5 trillion annually.
Furthermore, Digital Garage began global expansion of the service in September 2025, offering Merchant of Record (MoR) capabilities to support cross-border transactions, multi-language support, and localized marketing.
Norbert Gehrke
