Google pushes hard for developers to pay 30% on in-app billing service

Every developer that hosts its app’s Google Play Store has to comply with the rules of the Android creator. For apps containing in-app purchases, one has to follow one basic rule which has been in place or many years.

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Every app that uses in-app purchases has to carry out the payments using Google in-app billing service. This service allows the company to acquire a cut of 30% on every purchase.

While this rule has existed for years. Some major developers like Netflic Inc, Spotify, Epic games, etc, have circumvented the rule. They prompt consumers to pay using a credit card, rather than their play app store account. This allows them to bypass google’s fee. Last year, even the Tinder dating app launched a similar payment process.

Google now however plans to push harder to developers to give the company a cut of in-app purchases.

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The Alphabet plans to use updated guidelines, that clarify a requirement for most apps to use Google’s billing service for in-app purchases. Allowing the company to benefit from 30% of purchases from apps on android.

Recently, Epic Games launched a new payment method for its players. This allows consumers to buy in-game upgrades and pay Epic directly. This however resulted in Fortnite being pulled out of app stores from both Apple and Google.

Epic however sued both the tech giants.

Reports claim that Google will give time to developers to update their apps. They will not be removed immediately from the app store.

The updated guidelines don’t necessarily mean a complete revamp of Google policies. Rather it means the company will no longer allow developers to prompt users to pay with their credit. This is a crackdown on developers who doesn’t offer subscription through Google’s billing service for in-app purchases.

Google’s existing Play Store guidelines say, in part:

  • Developers offering products within a game download on Google Play or providing access to game content must use Google Play In-app Billing as the method of payment.
  • Developers offering products within another category of the app downloaded on Google Play must use Google Play In-app Billing as the method of payment, except for the following cases:
  • Payment is solely for physical products.
  • Payment is for digital content that may be consumed outside of the app itself (e.g. songs that can be played on other music players).

Google however has more or less allowed some high-profile companies to circumvent its guidelines. Now, however, Google is ready to make all developers comply with its policies or face enforcement.

Last week some major developers of in Tech market banded together primarily against Apple, and formed what is now called “Coalition for App Fairness”. This coalition included the likes of Epic Games, Spotify, and Tile. The group’s aim is to “create a level playing field for app businesses.”

Google’s new updated policies will surely escalate this ugly battle of developers.

Android being an open-source platform allows is users to access multiple app stores. But if developers want to be in the Play Store, they have to abide by Google’s rules.

A Google spokesperson said in a statement, “As an open platform, Android allows multiple app stores. In fact, most Android devices come with at least two stores right out of the box, and users can install others,”. He also added, “For developers who choose to distribute their apps on Google Play, our policy has always required them to use Play’s billing system if they offer in-app purchases of digital goods. We are always working with our partners to clarify these policies and ensure they are applied equitably and reasonably.”

Apple’s App Store has the same requirement as Google Play for in-app purchases and billing. Both companies exempt purchases for physical goods. Apple, however, does not let developers point users to outside websites to subscribe, but Google does.

App store fees generate billions of dollars in high-margin revenue for both Google and Apple each year. This revenue is termed by many developers as un-warranted tax.

The complete report will only be clarified after Google announces its final stance on in-app purchases next week. Will Google’s updated policies be as strict as Apple’s? only time will tell.

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