In a significant move, Google will allow developers of non-gaming Android apps from several countries, including India, to offer third-party payment options under a pilot project. On these alternate payment systems, developers will see their service fee of 15-30 per cent reduced by 4 per cent. However, even now, developers will have to support Google’s inbuilt system in their apps. The development follows increased global regulatory scrutiny on Google and Apple over the companies mandating their own in-app billing systems and charging commission on each transaction. In March, Google had first launched the pilot project on Spotify, a developer that has been particularly vocal against Google and Apple’s handling of payment methods on in-app purchases. With the latest move, the pilot has now been extended to non-gaming app developers in India and four other markets — Australia, Indonesia, Japan and the European Economic Area. Why is this significant? In 2021, South Korea passed a law which made it mandatory for Google and Apple to open their app stores to alternative payment systems. Indian developers have also met with the government to explore the scope of a similar legislation in the country. On Google’s Play Store as well as on Apple’s App Store, developers, for the most part, have not been allowed to introduce their own payment methods as the two companies have forced them to use their proprietary billing system for in-app purchases. With this, Google and Apple are able to keep a cut of the transactions as commission which in some cases, could go as high as 30 per cent. However, it is worth noting that Google recently lowered its App Store fees for all subscription-based services to 15 per cent from 30 per cent, effective January 1, 2022. The penalty for violating this rule is typically suspension from both app stores. Video game developer Epic Games faced this fate in 2020 after it introduced its own in-app payment method in its popular game Fortnite. Have Indian app developers raised concerns? In 2020, Google said it would enforce its in-app payment method in India by September 2021, which led to significant backlash from the industry. Prominent Indian internet entrepreneurs, including Paytm’s Vijay Shekhar Sharma and BharatMatrimony’s Murugavel Janakiraman, raised concerns about this system with the IT Ministry. As a result of this pressure, Google said it would defer the enforcement of its rules in India until March 2022, later extending it to October 2022.
