Video, audio and book apps on Play Store may only need to pay 6% commission

Indian small app developers and startups offering video, audio or book content may only have to pay 6% commission for in-app purchases on Google Play Store, a business executive told ET. This follows recent changes, which enable alternatives to its billing systems, announced by the tech giant in certain markets. The Play Store commission is expected to take effect from October 31 in India.

However, other apps, except those offering gaming content, will pay almost 11% commission if they choose to adopt an alternative billing mechanism to Google Play’s billing system, the person said. The 6% and 11% commissions will be applicable on non-gaming applications that generate less than $1 million in revenue per year.

Great descent

Admittedly, this marks a significant drop by Google from the 30% commission it has announced it will charge since announcing its Play Store commission policy two years ago, causing a concerted pullback from the ecosystem of local startups and triggering an investigation by the Competition Commission of India (CCI) into the matter which is now in its final stages, according to people in the know.

Google has also been criticized 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 and public policy Wilson White said that when app developers opt in to billing options alternatives, Google will waive the cost of processing credit card or debit card payments, which equates to approximately 4%.

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“So in user choice billing, if the user chooses developer billing, as opposed to google play store billing, the service fee will be reduced by 4%, which is the type of cost generalization of payment processing. But other than that, all the other services are the same,” he said.

Earlier this month, Google said it was rolling out the next phase of its User Choice Billing pilot and announced that India was among the markets where the service would be available to users. Other markets where the alternative billing option has come into effect include Australia, Indonesia, Japan and the European Economic Area. Indeed, the new regime will allow all non-gaming developers to offer users an alternative billing system in addition to Google Play’s own billing system.

Digital entrepreneurs believe that even though Google allows other payment options, developers will still have to pay a commission.

“We haven’t heard of the commission reduction beyond 15% but there is talk that Google will continue with its policy on October 31,” said Murugavel Janakiraman, president and CEO of Matrimony.com, adding that “Startups and digital businesses in India will continue to oppose and fight against Google’s monopoly and arbitrary implementation of forcing businesses to use their in-app payment and pay huge commissions.”

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