However other apps, barring those offering gaming content, will pay close to 11% commission if they choose to adopt an alternative billing mechanism to Google Play billing system, the person said. The 6% and 11% commissions will be applicable on non-gaming apps which earn less than $1 million in revenues per year.
Big climbdown
To be sure, this marks a significant climbdown by Google from the 30% commission that it said it will charge since announcing its Play Store commission policy two years ago, provoking concerted pushback from the local startup ecosystem and triggering a probe by the Competition Commission of India (CCI) on the issue that is now in its final stages, according to people in the know.
Google has also been criticised for not allowing alternatives to its Play billing system to developers.
Explaining the revised terms of its user choice billing policy, Google’s global vice president for government affairs & public policy Wilson White, said that when app developers opt for alternative billing options, Google will forego the cost of processing payments through credit cards or debit cards, which works out to be approximately 4%.
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“So, in user choice billing, if the user chooses the developers billing, as opposed to Google Play Store billing, the service fee will be reduced by 4%, which is the kind of generalised cost of doing the payment processing. But other than that, all the other services are the same,” he said.
Earlier this month, Google said it is rolling out the next phase of its user choice billing pilot and announced that India is among the markets where this service will be available for users. Other markets where the alternative billing option came into force include Australia, Indonesia, Japan, and the European Economic Area. Effectively, the new regime will allow all non-gaming developers to offer users an alternative billing system alongside Google Play’s own billing system.
Digital entrepreneurs are of the view that even if Google does allow other payment options, developers will still have to pay a commission.
“We have not heard about the reduction in commission beyond 15% but there is talk that Google will go ahead with its policy on October 31,” said Murugavel Janakiraman, chairman and managing director of Matrimony.com, adding that “startups and digital companies in India will continue to oppose and fight against the Google monopoly and arbitrary implementation of forcing companies to use their in-app payment and paying huge commission”.
