Google has officially clarified that developers of all apps that are available on
store will have to use Google Play’s billing system. Now, for the end users, it may not matter much as you have to pay a subscription fee or for in-app purchases. However, for developers it’s a reason for worry.
There are two ways you can buy an app subscription or make in-app purchases? For most apps, people buy something using the credit card linked to their Google account basically using Google Play’s billing system. However, for apps like
and few others you have to make the purchases independently. And for developers, not using Google Play’s billing system it has been a big relief simply as they didn't have to pay “tax” to Google which is as high as 30% of the bill.
Until now, Google did not strictly enforce that all
on Google Play will have to follow Google Play’s billing system. However, now things have changed. “All developers selling digital goods in their apps are required to use Google Play’s billing system,” said Sameer Samat, vice president, product management at Google.
Why are developers upset if 30% commission has always been there?
Now, this 30%
is not something new. It was always there and even Apple charges the same. But Google did not care much about it and thus apps like Netflix, Spotify, Tinder and other big names who had the capacity to create their own payments ecosystem went ahead to avoid Google Play’s billing system.
Majority of app developers already use Google Play’s billing system As per Google, “less than 3% of developers with apps on Play sold digital goods over the last 12 months, and of this 3%, the vast majority (nearly 97%) already use Google Play's billing.”
Google is giving one year time to all developers to switch to Google Play’s billing system. The deadline to shift to Google Play’s billing system is September 30, 2021. “Those who already have an app on Google Play that requires technical work to integrate our billing system, we do not want to unduly disrupt their roadmaps and are giving a year (until September 30, 2021) to complete any needed updates. And of course we will require Google’s apps that do not already use Google Play’s billing system to make the necessary updates as well,” said Samat.
With this clarification Google aims to set the record straight that all apps, including those of Google, will have to use Google Play’s billing system and are required to pay 30% tax if the user buys an app or subscription or makes any in-app purchase. Of course, for those unaware, in-app purchases don't include things you purchase from Amazon or pay money to someone using Paytm. In-app purchases mostly mean if you are buying a Gold edition of Tinder or buying a new gun in Call of Duty Mobile or other similar kinds of purchases.
So, why is it a big deal now?
With Google reminding all developers to use Google Play’s billing system one thing is clear, no developer can make money by being present on Google Play store and not pay any commission to Google at all. Be it education, dating, fitness or others, any app which provides a freemium model and charges money through the app will have to sign-up for Google Play’s billing system. Whatever purchase is made, Google will charge 30%, which to most developers is quite high and they feel trapped. As in India, Android happens to be the most popular
platform, for an app to be popular, it has to be there to Google Play. And if the developer chooses a freemium model, then they will have to offer 30% of the money to Google. Not to forget, also compete with Google’s own app which is anyways better distributed through advertisements.
Thankfully, Google is promising to make it easier for third-party app stores to survive. “We will be making changes in Android 12 (next year’s Android release) to make it even easier for people to use other app stores on their devices while being careful not to compromise the safety measures Android has in place,” he added. With a third-party app store, developers may get a better deal and pay less than the existing 30% commission.