Google trials new payment methods for Play Store, but not everyone will be pleased

Google has kicked off a pilot program that will broaden the range of payment methods supported by Play Store, the official Android application marketplace.

As explained in the support documentation, the trial will allow Android developers in the European Economic Area (EEA), Australia, Indonesia, India and Japan to implement billing systems that are not owned and operated by Google.

The pilot will cover in-app purchases and subscription sign-ups, as well as browser pop-up payments, but for an undisclosed reason will not extend to mobile games applications at this time.

Google Play Store commission

The new Play Store trial can be seen as a product of recent pressure applied to the likes of Google and Apple, which enjoy a stranglehold over the mobile applications ecosystem, by stakeholders and regulators calling for reform.

Infamously, Apple is currently embroiled in a legal battle with Epic Games, the maker of popular video game Fortnite. The company attempted to bypass the 30% commission in the summer of 2020 by launching its own in-app payment mechanism, which saw Fortnite promptly removed from the App Store. Although the judge ruled largely in favor of Apple in the first part of the case, Epic has appealed the ruling and the dispute rages on.

Legislation passed in the US state of Arizona last year, meanwhile, sought to stop Google and Apple forcing developers to use a single payment system exclusively, and penalizing those that opt for an alternative system.

Although the rules protected Arizona-based developers and residents only, they set a precedent that could give impetus to similar measures in other states and countries.

The Play Store alternative payments trial could be interpreted as an attempt to get out ahead of any new legislation that might prove even more stringent than the voluntary concessions made under the pilot scheme.

While the trial will minimize the extent to which Google can leverage market position to its economic advantage, it may not wholly satisfy developers who believe the company demands too great a cut of app-related purchases.

Although Google reduced its commission from 30% to 15% last year, under the pilot, the firm will continue to take a 4% service fee for all purchases made via alternative methods. For its part, Google argues its fees have never represented simply the cost of processing transactions, but reflect the broader value provided by the Android platform. 

A similar line of argument was pursued by Apple last year, as the company campaigned against new regulation in Arizona.

“The commission has been described by some special interests as a ‘payment processing fee’, as if Apple is just swiping a credit card. That’s terribly misleading,” said Kyle Andeer, Chief Compliance Officer at Apple.

“Apple provides developers an enormous amount of value - both the store to distribute their apps around the world and the studio to create them. This is what the commission reflects.”

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