Google’s pilot for app billing choice to begin in late 2022


Google plans a pilot to allow app developers to integrate dual billing systems for their apps for in-app purchases and subscriptions. This will allow app developers to offer users the choice of making payments for purchases either via Google’s Play Store, or any other billing system. This is not entirely new as a concept, but the application will be global.

In South Korea, Google offers dual billing choices to developers, complying with the country’s new laws. “This pilot will allow a small number of participating developers to offer an additional billing option next to Google Play’s billing system and is designed to help us explore ways to offer this choice to users while maintaining our ability to invest in the ecosystem,” said Google’s product management vice president Sameer Samat.

Spotify, the popular music streaming app globally, has confirmed it is on-board the trial for dual billing methods. It will be able to offer in-app subscriptions on Android phones, something it has not done for a while because of the streaming giant’s stand that the commission for subscriptions forced it to raise the prices for subscribers. Now it will also have another billing system, which may allow the developers better value in terms of revenue sharing. Spotify has confirmed it plans to launch the first iteration of User Choice Billing systems this year when in-app purchases should be available within the app.

“Spotify is on a years-long journey to ensure app developers have the freedom to innovate and compete on a level playing field,” said Spotify’s chief freemium business officer Alex Norström.

It is unclear if Spotify and other apps will still have to pay Google any fees for transactions done through a third-party billing system.

Google, Apple, and Microsoft have faced criticism for the commission they charge for every sale or transaction done on their application stores. In the case of Google, it is the Play Store on Android devices such as smartphones, tablets, and TVs. This year Google slashed the commission from 30% to 15%, but with caveats.

There is limited clarity on how a dual billing option in-app for users will impact Google’s commission slabs of 15% and 30% if other billing methods charge lesser. There may be a scenario where paying via the Google Play billing system for the same subscription or in-app purchase may be slightly more expensive than a secondary billing system.

“Our pricing model has evolved to help all developers on our platform succeed and today 99% of developers qualify for a service fee of 15% or less,” said Samat.

The billing choice partners are likely to change depending on the region. “This pilot will help us to increase our understanding of whether and how user choice billing works for users in different countries and for developers of different sizes and categories,” said Samat.

Spotify confirmed it will continue to offer the ad-supported free subscription tier globally, but with the added option of switching to a paid subscription within the app.

The dual billing option for Spotify and other apps will be available only if the app has been downloaded from the Play Store. Any app downloads from third-party stores will likely not have this option. This could be a bit of a complication for smartphone brand-owned application stores such as Samsung’s Galaxy Store on Android phones.

Also read: Play, Pay, News: Why Google’s services are on CCI radar

In India, Google has been under the Competition Commission of India (CCI) scrutiny for mandatorily routing purchases and in-app transactions via its own billing system, and then charging a mandatory commission on each sale. The Play billing system also tends to give an advantage to Google Pay, the company’s digital payments platform.

There are also concerns about the deadline for enforcing the policy making it mandatory to adopt the Play Billing system for all apps.

Alliance of Digital India Foundation executive director Sijo Kuruvilla George is unimpressed. “As per Google, this pilot will be rolled out only by the end of the year, and details of the terms of the agreement are also not forthcoming. With the deadline barely a week away, this announcement seems like headline management and yet another distract and deflect tactic.”

After the CCI’s scrutiny, Google last year extended the deadline for implementing Play Billing to October for India, whereas it is March 30 for developers in other countries. “We urge for an extension of choice to all apps and an immediate extension of the deadline for all,” said George.

In Korea, Google is providing alternative payment systems for Play Store developers to choose from. A new law banned app platforms from monopolising payment methods, which has forced tech giants including Google to widen the options available to developers. The Korea Fair Trade Commission fined Google $176.64 million in September for antitrust practices.

Google, Apple, and Microsoft have faced criticism for the commission charged for application store transactions, be it for new app downloads, in-app purchases, or subscriptions. In the smartphone space, Android has around 94.91% market share in India, slightly down from 95.24% in January, according to the latest numbers by StatCounter. Apple’s iOS for iPhone is a distant second, with a 3.82% share.

Ahead of the Windows 11 release, Microsoft last year changed the commission policy. If app developers are using their or third-party billing systems, they will not have to pay any commission to Microsoft with the caveat that game sales and in-app purchases are not part of the friendlier policy towards developers. Microsoft offered the choice before Google.

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