Facing heat, Google defers 30% in-app commission in India to 2022

Wednesday, 07 Oct, 2020

The move comes at a time when Mr. Sharma, among several other Indian start-up founders, has been at the forefront of voicing displeasure against Google over the US company's requirement that apps use Play Store's billing system for in-app purchases of digital goods. This was set to go into effect on September 30 2021, but now the company has announced that for India at least this will be pushed back to April 2022.

A senior technology executive familiar with Google's thinking said the conflict is counterproductive to what Google has been doing - it's an odd place for them, it's a reputation problem, and it's in Google's best interest to solve that problem. Google said it is organizing meetings with representatives of Indian startups to understand and minimize their concerns about the policy change. Paytm has gone a step further and launched a mini-app store to support Indian developers, in a direct challenge to Google's dominance in the space.

However, experts also say if India is looking at having its own app store then it needs to be transparent and more open in their operations. This development led Indian app developers and entrepreneurs to demand a national app store alternative to Google Play. A few Indian developers protested against the in-app commission that has been around for some time but is to be implemented as a defaut condition for apps of Google Play providing in-app purchases. Paytm got into a tiff with Google last month when Google removed the Paytm app from the Play Store, just ahead of the start of the IPS 2020 cricket tournament, citing that some of the cashback offers available on the platform amounted to betting.

Google, the californian-based tech company has been a source of concern for Indian startups where the company said last week that no application could bypass its 30% cut policy for every in-app purchase made in an app published on play store. Google has sent notices about warnings over gambling to several more firms in India in recent weeks. Fantasy sports apps allow users to pick their favorite players and teams. These players stand to win real money or points that they can redeem for physical goods based on the real-world performance of their preferred teams and players. The Indian startups are also expected to approach the central government for help.

Paytm is providing listing and distribution of these mini apps from within its app, without any charge.

Paytm said that the Mini App Store has been in its beta testing phase with select users in the country for some time and has seen over 12 million visits in the month of September.

The company said, "We provide Paytm wallet, Paytm Payments Bank account and UPI at zero charges and levies a 2% charge for other instruments like credit cards".

Asked about plans for a mini-app store for iOS users, he said, "Currently, we targeted Android as 98% of smartphone users are here".

"Google charging for using their app store is not wrong but the way they are doing it is by abusing their dominant position in the app ecosystem".