Indian businesses that make less than $1 million in revenue per year will now be subjected to a lower in-app purchase fee levied by Google Play Store. Traditionally, the fee stands at 30%, but from October 31 it will be dropped to as low as 6% for select app types.
As reported by Economic Times, Google Play Store is changing its policies to allow apps that offer audio, video, or book content to be charged a 6% fee on in-app purchases. Other apps, excluding those offering gaming content, will be charged 11%.
This move comes on the back of Google’s decision to provide alternative billing systems to the Google Play billing system in select markets. Any apps that fulfil the revenue criteria and have customers that choose to use the alternative billing system will be eligible for the lower fee structure.
This development is a far cry from the statement made by Google when creating its Play Store commission policy two years ago, charging 30%. That announcement created immense pushback from developers and policymakers, with the Competition Commission of India launching a probe into the matter, which is reportedly close to completion.
Wilson White, Global Vice-President for Government Affairs and Public Policy, Google, explained the difference caused by the shift in billing systems. He said that if apps start using alternative systems, Google will forego the cost of processing payments through credit or debit cards, which works out to around 4%.
“So, in user choice billing, if the user chooses the developers billing, as opposed to Google Play Store billing, the service fee will be reduced by 4%, which is the kind of generalised cost of doing the payment processing. But, other than that, all the other services are the same,” he said.
This report has not been independently verified by YourStory.
Apart from India, other markets where Google is offering the alternative billing option include Australia, Indonesia, Japan, and the European Economic Area.
