Google Play allows US developers to use an alternative payment system
Google and Apple have struggled with app developers on their platforms. Google Play Store and Apple Store require all in-app purchases to be made through their internal payment system. This implies that developers have to pay a certain fee for each purchase. Moreover, developers will have no choice but to share these costs with consumers. For Apple, this fee is 30% for large developers, a fee the industry calls Apple Tax. The EU and other organizations are against this fee. There have been several legal battles in several regions regarding these charges. Today, Google Play will exempt certain apps in the United States. It will allow users of Spotify and the dating app Bumble to pay through other means. They can bill US users for subscriptions directly in their Android apps.
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Google Play Store will still charge a 4% fee
Google’s move is a major concession from major mobile app stores to third-party charging systems. It is also a major difference between Google’s and Apple’s app store policies. Typically, Google Play and Apple’s App Store, through their billing platforms, take a 15-30% commission on in-app digital sales. Now, Google allows businesses to charge users’ credit cards directly in the app. This could reduce fees for services like Spotify.
However, Google stated in a supporting document that apps that charge users directly will still have to pay Google a percentage of app sales. Spotify will continue to accept payments for subscriptions through Google Play’s billing system. “When users choose to use other billing systems, developers pay a 4% reduction in service fees,” Google said.
The new 4% fee is quite reasonable compared to the previous 15% to 30%. Most likely, this new fee from Google will attract no resistance from the industry. Clearly, Google Play Store is bowing to pressure from the EU and other regions.