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Service fee crucial for the growth of developer ecosystem in India: Google

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Google said that the service fee it charges developers helps fund the significant investments it has made to support the growth of India’s app ecosystem.

According to Google, it has complied with the CCI‘s order regarding its Google Play payment policy. Despite developers’ previous attempts to suspend Google’s in-app billing fee system, claiming it was non-compliant with the directive, Google will continue to enforce its policy in India.

The Competition Commission of India (CCI) is investigating Google’s user choice billing system following a complaint from the Alliance of Digital India Foundation (ADIF) and Tinder-owner Match group. The ADIF represents Indian startups like Paytm, MapmyIndia, Matrimony.com, and TrulyMadly.

The regulatory body has decided to inquire into Google’s compliance with its order against the company since October of last year, reports Economic Times. The anti-competition regulatory have asked Google to explain the reason for offering user choice billing to developers offering apps to users in India but not to Indian developers delivering apps to users outside the country.

The company notes that only 3 percent of developers in India offer digital goods and services so they would need to pay any service fees. Further, there are even less than 60 out of 200,00 developers that could bear a service fee of above 15%.

Google charges a service fee for all the transactions that go through the Play Store, which is typically 15% or less and is the lowest among major app stores. The fee is further reduced by 4% if a user chooses to pay through an alternative billing system, which the developers argue is a “high service fee.”

“In 2020, we clarified the requirements of our Payments policy and developers in India have had considerable time to make the necessary changes to their apps. We’re respectfully following the CCI’s October 2022 order, and in compliance with that order, we expanded user choice billing to all developers in India and updated our policy that went into effect starting April 26, 2023,” Google wrote in the blog.

There are three billing options for developers – Google Play billing for easy transactions and centralised payment management, an alternative billing system for India, and a consumption-only option for apps that are part of a paid service.

“Most developers globally have already elected one of these routes. In India, now that the deadline has passed, we are informing developers in the country who have not yet implemented one of these options that we will be taking necessary steps to ensure our policy is applied fairly. We continue to comply with local laws and cooperate with local proceedings, as applicable,” said Google.

Last year in October, the CCI fined Google Rs 2,275 crores over discriminatory practices. Soon after which, Google introduced the user choice billing system in India, which allows app developers to offer alternative billing options such as UPI, card payments, net banking, and more. However, even with these options, there is still a commission fee ranging from 11% to 26%, developers complain.

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Service fee crucial for the growth of developer ecosystem in India: Google

Google said that the service fee it charges developers helps fund the significant investments it has made to support the growth of India’s app ecosystem.

According to Google, it has complied with the CCI‘s order regarding its Google Play payment policy. Despite developers’ previous attempts to suspend Google’s in-app billing fee system, claiming it was non-compliant with the directive, Google will continue to enforce its policy in India.

The Competition Commission of India (CCI) is investigating Google’s user choice billing system following a complaint from the Alliance of Digital India Foundation (ADIF) and Tinder-owner Match group. The ADIF represents Indian startups like Paytm, MapmyIndia, Matrimony.com, and TrulyMadly.

The regulatory body has decided to inquire into Google’s compliance with its order against the company since October of last year, reports Economic Times. The anti-competition regulatory have asked Google to explain the reason for offering user choice billing to developers offering apps to users in India but not to Indian developers delivering apps to users outside the country.

The company notes that only 3 percent of developers in India offer digital goods and services so they would need to pay any service fees. Further, there are even less than 60 out of 200,00 developers that could bear a service fee of above 15%.

Google charges a service fee for all the transactions that go through the Play Store, which is typically 15% or less and is the lowest among major app stores. The fee is further reduced by 4% if a user chooses to pay through an alternative billing system, which the developers argue is a “high service fee.”

“In 2020, we clarified the requirements of our Payments policy and developers in India have had considerable time to make the necessary changes to their apps. We’re respectfully following the CCI’s October 2022 order, and in compliance with that order, we expanded user choice billing to all developers in India and updated our policy that went into effect starting April 26, 2023,” Google wrote in the blog.

There are three billing options for developers – Google Play billing for easy transactions and centralised payment management, an alternative billing system for India, and a consumption-only option for apps that are part of a paid service.

“Most developers globally have already elected one of these routes. In India, now that the deadline has passed, we are informing developers in the country who have not yet implemented one of these options that we will be taking necessary steps to ensure our policy is applied fairly. We continue to comply with local laws and cooperate with local proceedings, as applicable,” said Google.

Last year in October, the CCI fined Google Rs 2,275 crores over discriminatory practices. Soon after which, Google introduced the user choice billing system in India, which allows app developers to offer alternative billing options such as UPI, card payments, net banking, and more. However, even with these options, there is still a commission fee ranging from 11% to 26%, developers complain.

FacebookTwitterLinkedin



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