Google on Tuesday clarified how the billing on its app store Google Play works. It said the apps that choose to sell digital within the app have to use ‘the Google Play billing system, which entails paying a percentage of the in-app purchase as a fee. The tech giant plans to start enforcing this rule for apps that meet this criteria but are not implementing it. Google Play Billing has always taken a 30 per cent commission on these transactions.
“We want to be sure our policies are clear and up to date so they can be applied consistently and fairly to all developers,” said Sameer Samat, vice president for product management at Google, in a blog post. “So we have clarified the language in our Payments Policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play’s billing system,” he said.
Google clarified that this policy is not new. The Google Play billing policy has always required developers to use Google Play’s billing system for in-app purchases of digital goods. It has been taking a 30 per cent cut from payments made within apps offered by the Play store.
This clarification will not affect the vast majority of developers with apps on Google Play and would only apply to less than 3 per cent of developers with apps on Play Store. It said nearly 97 per cent of apps already use Google Play billing. Non-compliant apps on Google Play that may require technical work to integrate the billing system have been given a year (until September 30, 2021) to complete any needed updates.
Play’s billing system is not required for apps that sell physical goods, for example, ride-hailing services or if there is no transaction within the app. Interestingly, for new apps submitted to the Play Store, this policy will go into effect from January 20, 2021, and includes categories such as fitness, game, dating, education, music, video, and other content subscription services. This means these apps would also have to now pay 30 per cent commission of the transaction to the Play Store if they implement in-app purchase of digital goods.
Google said its Play Store continues to help Indian developers scale and reach wider audiences. Consumer spending on apps and games created by Indian developers doubled year to date when compared to the same period last year. Indian developers also saw growth of more than 80 per cent in consumer spend from users outside of India for this year till date, when compared to the same period last year.
The clarification by Google also comes at a time when digital payments firm Paytm recently accused Google of making policies that are over and above the laws of India. The Noida-based firm’s app had been briefly delisted from the Play Store for violating its policy on sports betting activities. When asked about the issue, Purnima Kochikar, Director, Google Play, said that last week’s incidents clearly states that, “we need to continue to have this dialogue, clarify and apply our policy uniformly and equitably.”
Kochikar said the company has an active conversation with all the developers and the firm is trying its best not to disrupt the user experience. “We have had multiple conversations (with Paytm) and we will continue to do that, because at the end of the day, Paytm is an important partner,” said Kochikar. “We know a lot of our users use Paytm and we will continue the conversation to make sure (what is) right for our users,” he added.
Paytm had launched a UPI cashback and scratch cards campaign on September 11. The company’s payments app was delisted on September 18 from Playstore for policy violations. Paytm had suggested that Google, too, regularly runs similar scratch card campaigns in India under its Google Pay app. However, Google had said that offering cashback and vouchers alone do not constitute a violation of the Google Play gambling policies. But the company said its policies don’t allow online casinos or support any unregulated gambling apps that facilitate sports betting, including daily fantasy sports in India. Contrary to accepted practice, Paytm had said it was not given an opportunity to respond to their concerns. But Kunal Soni, director for business development, Google Play – South East Asia and India said there had been multiple conversations with Paytm specifically on the gambling policy over the last few months.