Google’s Billing Policy Explained: Tech giant to charge 30% fee from all in-app purchases starting next year

Tech giant Google said that it will enforce its Google Play rules that require all app developers on the Play Store to use its in-app payment system. With this move, all Android developers will use Google’s billing system which takes a 30 percent fee from payments.

Google Play’s billing policy in print has always required developers to use its billing system​ for in-app purchases of digital goods. While this isn’t new, Google today clarified the language of the policy during a virtual briefing. Google said that more than 98 percent of its current developers comply with this “long-standing policy”.​

According to Google, “Any app that chooses to offer in-app purchase of digital goods like unlocking additional features for a system tool, or buying tokens to power-up a game character, or even paying for songs in a karaoke app will be required to use Google Play’s billing system”.

However, Google Play’s billing system will n​ot ​be required for apps that sell physical goods. Also, paying for a content subscription via the developer’s own native website will not be considered as a transaction within the app, and hence this policy does not apply.

It is important to note that developers are free to communicate to their users about any alternate ways to pay for services and products outside of the app. This could include promotions on other platforms making it a ‘consumption only’ app. Google further added that any developer is free to choose this app model to implement their digital purchase offerings, which means no in-app transactions.

In terms of deadlines, existing developers will have until September 30, 2021​ to make sure their app is compliant. While new apps submitted to Play after January 20, 2021 will need to be in compliance with the clarified policy.

If Google & Apple were to charge same MDR as PGs, they will revolutionize in-app payments. Many devs will actually prefer native integration and ease of collecting money. But that aint happening. They are not going to sacrifice billions of dollars for ecosystem's benefit https://t.co/vLaegidKFU

— deepakabbot (@deepakabbot) September 29, 2020

Like gaming maybe dating and education apps may soon get off app stores and get users to “side load” in hopes to save costs.

— Kunal Shah (@kunalb11) September 29, 2020

India needs a local app store long term else 30% tax will eat up most businesses, is anyone trying to build one? https://t.co/cSdLvjPFVi

— Harshil Mathur (@harshilmathur) September 29, 2020