Google rolls out third party payments for all Indian developers

“In response to recent regulatory developments in India, we are now providing all developers with the ability to offer an alternative billing mechanism to Google Play for their mobile and tablet users in India. If a user pays through an alternate billing system, the Google Play service fee will be reduced by 4%,” read an update on the company’s official Play Console Help support page.

Google currently charges developers a commission of 15% or 30%, depending on their annual Play Store revenue, for using its platform and payment tools. With this update, developers using third-party payment services, such as any alternative payment gateway for paid apps, services, and subscriptions, will receive a 4% discount on commission – which still puts them at 11% or 26% in commission. liable to pay %. To Google, based on how much they earn from their apps.

The update comes after the Competition Commission of India (CCI) cumulatively imposed fines on Google 2,273 crore (over $275 million) in October last year for abusive market dominance and anti-competitive conduct. Google has since filed an appeal against the CCI’s decision in the National Company Law Appellate Tribunal (NCLAT), which is currently hearing.

To be sure, Google first released a pilot program last September to enable third party billing with select developers. On January 25, the company had confirmed as part of its policy change that it would enable third-party payments for all developers in the country.

However, startups and developers have claimed that Google’s response to the CCI orders is not in compliance. A statement issued on the matter by industry body Alliance of Digital India Foundation (ADIF) said the update is “a clear violation of a specific CCI directive.”

“App developers will be forced to pay commission, despite not using any of Google’s services. This is a clear violation… Google will not impose on App Developers any terms, including price-related terms, that are unfair, unreasonable, discriminatory or inconsistent with the services to be provided to App Developers. Also, there is absolutely no transparency as to why Google would charge 11% or 26% (commission) even when the user avails a third-party processing service. This becomes more problematic considering that the majority of transactions made in the in-app digital ecosystem do not use the Google Play billing system, the ADIF statement said.

On October 28 last year, Mint reported that startups are likely to step up their fight against the Google Play Store commission in light of the CCI’s decision. Ramesh Kailasam, chairman and chief executive of industry body IndiaTech, said at the time that the commission charged by Google “could kill the startup ecosystem, and force them out of the app economy.”

“This can be seen as a blatant abuse of operating system market dominance, as the typical usage of a payment gateway interface is ideally around 1-3% for any online transaction. This commission rate can be challenged by startups as per CCI order.”

However, the lawyers warned that Google is not strictly following the CCI order, as the CCI is not a market price regulator.

“When a consumer chooses to use an alternative billing system, the standard service fee paid by the developer will be reduced by 4%. Google Play’s service fee has never been simply a payment processing fee. Reflects the value that Play provides, and all of the developer services we provide, including app distribution and discovery, commerce platforms, developer tools, analytics, training and more,” said a Google spokesperson.