Apps Clarify Google Deferred New Billing System But Not 30% Cut

Dating app Truly Madly’s CEO Snehil Khanor told The Quint that the 30 percent cut has been in place for long. 

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Tech and Auto
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Amid reports of Indian apps’ unhappiness over Google Play Store’s new billing policy and its levy of a 30 percent commission on in-app purchases, apps have issued a clarification.
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Amid reports of Indian apps’ unhappiness over Google Play Store’s new billing policy and its levy of a 30 percent commission on in-app purchases, apps have issued a clarification.

Speaking with The Quint, the CEO of Indian dating app Truly Madly has specified that Google has only deferred the implementation of its new billing method and not the 30 percent commission it charges.

Snehil Khanor, Co-Founder and CEO of Truly Madly, clarified that some media reports are incorrectly stating that Google has deferred its decision to charge a 30 percent commission on in-app purchases for apps listed on the Play Store.

“Some media reports are saying that Google has deferred its 30 percent commission. That is not at all true,” Khanor told The Quint. “We already pay 30 percent. The only thing that has been deferred is Google forcing us to remove PayTM and PayU who offer us their services for a 1-2 percent commission instead of a 30 percent cut.”

Google, facing backlash from apps, has decided to defer its new billing system by a year, to 31 March 2022, for existing apps. Google’s Vice President of Product management Sameer Samat also stated in an official blog on 28 September that the company will hold more talks with Indian start-ups on their concerns.

“...for 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,” Samat’s blog stated.

“We are already integrated with Google Play Store billing and we are also integrated with PayTm, PayU and others. Google has essentially asked us to remove PayTm’s billing system and only use Google’s billing method,” Khanor told The Quint.

ISSUES FACED BY INDIAN APPS

Amid growing calls among developers and founders for an Indian app store, Paytm, on Sunday, 4 October, announced the launch of its ‘Mini App Store’. The launch was accompanied by a pledge to help homegrown start-ups scale and “Indian developers to take their innovative products to the masses.”

Paytm founder and chairman, Vijay Shekhar Sharma, in a company blog post, said: “Paytm Mini App Store empowers our young Indian developers to leverage our reach and payments to build new innovative services.”

Sudhir Naidu, founder and CEO of Troop Messenger, a team collaboration and workplace communication platform, told The Quint, “Though this policy is in place, it was not enforced effectively. It kept lot of options open for the developers (who are selling digital goods and in-app purchases) to circumvent the billing and not pay this commission. What Google now says is that it will start to enforce by March 2022, for India.”

Naidu, like hundreds of other apps who have raised the issue, feels the commission also needs a relook. “Thirty percent commission is too steep, and start-ups will not be able to withstand this additional burden. As per me, alternatives will rise up in coming 12-18 months and if Google senses this in time, it will change its policy or defer this indefinitely.”

Khanor adds that while other billing gateways like PayTm and PayU charge 1 to 2 percent commission, Google’s 30 percent cut takes a toll on their revenues and ability to grow.

“Others are charging 1-2 percent for transactions, they credit the money within 1-2 days while Apple and Google send the money once in 15-20 days which affects our cash flow,” Khanor states.

WHY THE DEMAND FOR AN INDIAN APP STORE?

Among the primary reasons is the market dominance of Google’s Android Operating System (OS), which includes the Play Store. Google’s Android OS currently commands over 90 percent share of the Indian smartphone market.

According to reports, a growing sentiment among many Indian start-up founders is that Google is abusing its dominant market position to squeeze revenues out of start-ups and is imposing hard conditions on them in order to avail the benefits of being listed and discoverable on the Play Store.

According to reports, a group of about 15 app founders also held a virtual meeting with officials of the Competition Commission of India to apprise it of their concerns regarding Google’s Play Store.

Paytm’s Sharma hasn’t just stopped at launching an apparently rival ‘app store’. According to Medianama’s report, he also set up Zoom calls with 56 founders to discuss concerns surrounding Google.

That’s not all. On Saturday, 3 October, 35-40 Indian founders held an hour-and-a-half long virtual meeting with the Union Electronics & IT Ministry to “discuss the grievances regarding App Store’s billing policy, its 30 percent commission,” CNBC reported.

“I'm confident that the government will work with tech industry bodies and come out with a policy framework, so some big indigenous tech players will venture into building an app store. Government's role should just remain as a regulator,” Troop Messenger’s Naidu told The Quint.

“Also remember, we should not have one app store but many which can compete among themselves, so the customer gets the best.”

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